I love broad generalizations. Yes, there may be a huge oversupply in the bush but no one wants to live there or it is in the wrong place or otherwise unsuitable.

Conversely, we have a shortage of land released for development which in turn puts pressure on arable land/market gardens/food basket.

There is also a reluctance to embrace med/high density solutions in many areas either inappropriate, heritage or too expensive

1 – review the values of the two properties, either your expectations of value are too high (you've paid too much and nothing is ever going to fix that) or the rents are drammatically understated.

2 – why is your regional property not +ve geared, is the rent too low, house in poor condition, undercapitalised/subdivisible etc?

3 – consider renting something which isn't 1 1/2 hours away and leasing out the unit at a much more realistic rent

4 – cut your losses on the regional property, you can always offset any capital loss against future capital gains.

I'd add to Dan's statement. The delayed settlement also allows you to save any additional moneys that you may need eg Stamp Duty, repainting, new kitchen/bath etc so that you can avoid mortgage insurance. So it can work to your advantage esp if you don't require immediate access.

OK I see what you are  trying to do but I just don't get it.

Essentially, you are trying to work out how much you will need to sell the place for in order to make a profit ie $450 + $70 = $520k

Unfortunately, property value is determined by the market and it will only pay market value as the buyer does not care whether you have doubled or halved your money at the end of the day as they are not privy to that information.

Even if you are trying to determine whether you are going to be liable for CGT or not, this calculation is useless. All calculations must be made without consideration of tax implications as everyone's tax situation is different. You would also then have to factor in the effect of cgt into your calcs.

If this was an IP, then you will be liable for cgt if you sell for more than you purchased, conversely you can also make a capital loss.

So in answer to your original question "should the Holding cost be factored into the price when selling", the answer is no, as it up to the market to determine.

On face value it may seem cheaper than some of the alternatives however you may need to check that their sizes are not their own custom sizes eg shallower depth of cupboards, narrower units which will only fit 'IKEA' appliances etc.

There are custom kitchens and custom kitchens – cost varies widely depending upon the finishes selected and the inclusions you require (ie pull out pantries, lazy susan, garbage bins, etc). Unless you were looking at a premium rental property, you'd skip most of the 'extras'.

It depends and it is also very subjective. A well designed house, having its living areas facing away from the street noise will be much more appealing than one with its bedrooms/lounge/study facing bearing the brunt of noise from the main street.

I would say that a 5-10% price difference between a quiet street vs busier street however there are many factors weighing into the equation. Eg: location – is the main drag more convenient to shops, schools, transport etc? Is one side of the road 'better' than the other ie city bound vs outward bound? How busy a street eg: Pacific Hwy vs Eastern Arterial Rd? One carries a lot more traffic but both go through the same suburb. Land size, orientation, slope etc.

There is some developer who advertises under self employment in the SMH wanting to exchange knowledge etc. All for the princely sum of $35k to become a partner.

Well, that;s one way of financing the project.

Hi Robbie,

1) In order to get a real estate licence you are required to complete an associate diploma from TAFE or OTEN (by correspondence/internet), there are other providers as well eg SEEK, KAPLAN etc. If you are working in more than one state, then you are required to have a licence for each state.
2) If you are buying on behalf of others, acting as a buyers agent etc this is also an area which requires a licence.
3) If you are buying only for yourself or for entities fully owned by yourself (only), then you don't need a licence unless you are classed running a property business.

Risk v Reward. Buy the property vacant possession. If the existing tenants want a new lease, market rent (taking into account the condition of the property).

There is no limit as to how much a rent increase can be however it must be supported by market rent. It will take 60 days or longer for the new rent to be effective, provided that there is no objection to the increase.

Hi Carpe,

Due Dilligence – this is the investigations that you do (either yourself or through your consultants) to satisfy yourself of the nature of the investment.

In this case:
Solicitor (or property consultant who has a great understanding of commercial/retail leases)
Building Inspector/Engineer – to alert you of any structural or compliance issues (this may also include getting a report on building services eg airconditioning, electrical, telecoms, fire services water, etc)
Town Planner (possibly) to check compliance/development potential)
Conveyancer/Solicitor to review the Strata Plan & transfer of the property

You will also need a copy of the leases, a lease expiry profile etc to assess cashflow and risk (planning for vacancies/vacancy factor and required upgrades that may impact on availability of the tenancies).