Forum Replies Created
rpdata. Download the suburb sales report, cross off the houses that don't match (eg too many bedrooms) and go for a drive to look at the others (or some of them). You really don't know until you've been there. You don't know what the house looks like, or what it is next to, or what the road is like, the rest of the surburb. There just is not substitute for going there and having a look. Say there are three 4 bed 2 bath homes listed in the report, and they seem similar online. Going for a drive reveals that one is a high set fibro across the road from a public housing house which doesn't look good, one is a restored qlder and has a massive $50K shed built in the back yard and one looks like a 10 year old brick family home. Perhaps google earth could be used, but it is not really timely enough for this purpose. You can't beat going for a drive, and in terms of making mistakes with the purchase of RE, going for a drive is normally pretty affordable.
All of the statistics on line that you keeping showing us John are useful, but I always have the concern that they are to be used for identifying existing trends, the booms you've missed.
Where are, what are the drivers of population growth, what determines where the new people will want to live and how do you identify major projects which have the potential to change a local economy before they hit the major news media?
I live in an outback town of 650 people. We are 100 km to the next town, and 350km to McDonalds, 500km to Target.
We purchased our own home here, but have not purchased investment property here.
My Dad, who is based in Sydney is a trained British Chartered Surveyor, which I think might be similar to a valuer. His training says that the value of property is linked to the value of the land, plus the value of the building. The value of the building is the cost to build the building TODAY less the depreciation.
This theory very accurately describes the value of housing in our small town. As building costs rose in regional centres, due to the mining and other booms, as building trades moved to those centres and away from our town, the cost of housing here rose. Our house we purchased 5 years ago for 110K, and it is now worth approximately 300K and we have carried out about 30K worth of improvements. Population is very static.
Great opportunity exists for people who can cheaply build in these towns. There is no way I would pay market value for an invesment property here now, but I would consider doing something like buying an ex railway house and relocating here to a vacant block, and tenanting it, then selling as a positively geared investment.
In small towns, small changes to the local economy can have a big effect on the local RE market. For instance, in our town, Council built a recreational lake. This led to a little boom in Real Estate as wealthy graziers from outside of town purchased houses in town so they could spend the weekend skiing on the lake. Similarly, when the railway laid off 6 workers, 6 families left town and that caused a housing slump. The message is, you need to have a very intimate knowledge of the small town in order to make your investment safe. At the moment, banks are not lending much in towns like this, which is further suppressing values. When lending policy relaxes a bit more we may see a little surge again. Interest rates do affect values, but perhaps not as severely as more expensive places. Values are not likely to grown to mining town levels because the bloke driving the grader for the Council on $60K a year can't afford to pay $500K for his family home.
Another thing to consider in small town markets is that the average values that you get from RP Data or RE.com are pretty useless. RE.com confuses our town with a suburb of a larger town and mixes all the values together meaning that the average is way out. Also, in such a small market, one or two sales which are abnormal for some reason, corrupt the figures immensely.
Consider this. A few years ago, our town appeared in the list of Property Investors Mag top capital growth. The average jumped due to the sale of one particular property which sold for what most people here felt was about $100K too dear. A year or two later the person who purchased that property sold it to an employee of theres for a $100K loss. And our town averages fell magnificently and I wouldn't be surpised if we appeared in PIM's list of worst performers for that year, having had 30% wiped off the average. This has affected lending locally, and values. The land titles office (or maybe the office of state revenue, not sure) even rang the local council in confusion over the matter.
Lastly, be aware that building, any sort of trade work, and freight of anything like building materials or large appliances etc in small towns is usually quite expensive and one person may have a monopoly as the local carpenter. Sometimes there is no professional property manager either.
have fun. I'll be putting my money in a larger market.
S
HI,
No, I don't know BNE at all really. Gladstone, Bowen and Chinchilla could all represent opportunities, but they are all very much tied to the mining boom. If you are looking for multi industry type towns, these are not really them. While they do all have other industries, the mining has created additional housing in these areas which would be surplus if the mining shut down. Townsville is more secure, in my opinion, than any of these towns, but it would be possible to make a quick buck in the towns you mention, or possibly even find something to positively gear.I can't direct you towards any other forums, sorry. This is the only one I visit.
Good luck with your search.
S
I agree you are likely to get better returns near Brisbane, and possibly better capital growth too. I would spend down there before Townsville myself. TSV offers opportunity for those willing to value add the investment, or who are positioned to buy particularly well. For people located outside of TSV, it alot harder to find an attractive investment.
Brisbane offers some excellent value at the moment.
I believe that the new estates in the Mt Louisa area are pretty good (ie, not slum like, but higher end).
My strategy doesn't include chasing losses to create a tax deduction and make the investment cheaper. I'm more focussed on just finding what I think will be the highest returning investment. This is why I have my money in cattle at the moment, and I'm about to buy a truck.
S
Tomara,
I live near Townsville and watch the market carefully. I haven't purchased in Townsville because I am not satisfied with the ROI, even with multiple dwelling type properties. I think Douglas in particular is a good choice. Mt Louisa is one of those suburbs with good streets and bad ones, so needs some careful research. Another couple of suburbs to consider are Kirwan, Aitkenvale, Annandale and West End, all for different reasons.Personally, I doubt we will see an oversupply in Townsville any time soon, in the housing market. I feel that in the high end appartment market, we may see over supply before too long. There is a phenomenal amount of development happening.
Some of the estates I have a strong distaste ,for, feeling that they really are the slums of tomorrow, which is why I prefer slightly larger blocks in older urban areas because of their future development potential, as well as the fact the buildings have allready significantly depreciated. Douglas is a new area, but tends to be slighlty higher end than some of the others, and has a particularly good location close to the hospital, university and army base, and a main arterial road.
Good luck
SWomen need to feel safe.
She needs to feel safe from the threat of poverty, ridicule, abuse, neglect, infidelity.
She needs to feel safe to express herself, personally, sexually, privately, publicly, in speach, dance, song, writing, cooking, fashion, home decor, art, sport, parenting
She needs to feel safe to rely upon you as a husband, best friend, father, provider, protector, lover.
She needs to feel safe, confident, secure, reassured, trust, trusted, valued, loved, adored, appreciated.
She needs to feel that she can stand toe to toe with you, shouting at the top of her voice and still be safe.
She needs to feel that she is safe because you will face everything in the world together.
Safe to explore who she is, be who she is, change who she is and still be loved.When you tidied the house, like you already realise, you returned the equilibrium to her world, restored the order and she was safer, more in control, and you were there, helping her. When you help around the house you show her that she can rely upon you as a father, a partner in the enourmous job of raising children – you'll be there, broom in hand, stirring dinner and changing bums right along side her. And that is what women find attractive in men – fathering potential. Be it the biological attraction to the strong male type, or the attraction to intelligence, humour, or to $ – It comes back to the evolutionary drive to find a suitable, reliable, safe father for their children.
So make her feel safe.
And I'll add to the sex and paycheque thing. Men need something to do, to feel useful. And according to my husband, they need a boat too.
S
Not really, though we have a very happy marriage that has lasted past the 7 year itch, and a relationship spanning 14 years as a couple.
We also have three kids under 6, a business and a couple of houses. We work together and live together.
If I had to guess, I'd say you're missing a language and his language is "no clothes on" language….
No seriously, it's not just about languages of love (though I think there is a point there). It is about respect. Respect for your partner means that you care for them and their feelings, you protect them in every sense. Respect means respecting what they like and what they want in every avenue of life – love, work, fun, kids. Respect and love together mean that when you know what they like and want, you do your best to give it to them, selflessly, and you take pleasure in their hapiness. Sounds enough to make your hurl, hey? I've never put it into a box and said my language of love is "Time Spent" and his is "Touch", I've just honoured his wishes, respected who he is and loved him for it, and he has done the same for me.
As for sex – well, we have three small children, including a baby, so sex is not at the top of the list of priorities (for me anyway) – sleep is! It's just a stage and we both look forward to Harry learning to sleep through the night.
The theory on the language of love seems to have helped you, though, and I think it is great that you know exactly how to make Nicky feel loved. Well done.
S
Benjamin Csikos wrote:Cleaning the dishes, or cooking her a meal while she watches an episode of desperate housewives is a practical guarantee of a good night for all.Yes, my husband employs a tactic much like this, only he adds having a shave and putting on some deodorant to the routine. It has got to the point where I feel slightly ill at ease when he does the cooking, the cleaning and comes from the bathroom cleanshaven and smelling like the perfume counter at myer.
SToo funny Ben,
I know how you can pay for all those things.
Get a second job freelance writing – you crack me up. I reckon you could sell that stuff to a paper.
It's only natural for your wife to feather her nest – it's called nesting.
Get her to do a budget for how much she wants to spend. Get her involved in making decision about what to spend money on and comparing wants, needs and income.
Seriously – you're a good writer. Reminds me very much of humouress (how DO you spell that?) little pieces you see in the paper on the weekend.
Good luck!
SSadly, much of that is very true. Much of the truth of the matter is also omitted.
Mmm. Admire your enthusiasm, Ben. I was more talking about sharing stories about chatting to an RE on the phone while wiping a three year olds bum. Juggling your latest excel spreadsheet with playdough. Retrieving the property section of the newspaper, and because your toddler wants to copy everything you do, handing them the cars section so they can pour over that (or eat it if they are 12 months or younger) while you sip a home made cappucinno and try to feel like a real property investor. Turning to propertyinvesting.com for intelligent conversation with like minded individuals – cause you just need a little break from "when people die do their legs go with them?" "Why?". Explaining to your bank manager that you ARE skilled.
Sharing stories about the unique challenges and opportunities presented to MONEY MUMMIES.
We could just start with our own thread, not a subdivision, or a street of new buildings.
S
http://www.realcommercial.com.au has businesses for sale. Just thought I'd mention it incase you were interested in purchasing a cash flow business.
We could perhaps reccommend regions to consider if you told us what you want in a region – do you have kids, is education important. City / regional / rural?? What do you like to do for fun? Climate? What do you and your wife want to do for a living?
Good luck with the move. My parents moved our family from Scotland to Australia in 1985 -SO glad they did, I love it hear and got my citizenship a couple of years ago.
S
We get our FTB A and B retrospectively when we lodge a tax return. Your accountant should be able to tell you what to do. Alternatively you can call the Family Assistance Office and register on the phone. They might send you a form. If you want to get the money fortnightly, you have to estimate your earnings. Underestimate and they may overpay you and you may have to pay it back – which I hate the thought of, which is why I claim retrospectively. It often means I get a $4K refund cheque.
Also, I agree with what Karen says, parenting advice comes thick and fast. Some of it's good, some not so good, some hilariously wrong – trust your instincts, and your wifes – they are the best guide you have.
Yes, SAHM's rock! We should have a property investing SAHM's club! I also run our business, which includes operating a liveweight cattle scale at a saleyard. I've got an employee there now, but when we took the contract on last year, 1 week after I had Harry, I was piling all three kids – newborn included, in the car at 6.30 am to weigh cattle for an hour or so about 3 times a week. I had toys and a baby rocker and colouring pens and paper in the scale office, and a box of food. The kids loved it and would get up at 6.00 and ask me "Are we going to the scales this morning" – even my 2 year old daughter would say it. I would weigh cattle (just operating a computer really) while breastfeeding and umpiring fights between the 4 year old and the 2 year old. Man I'm glad I've got an employee in there now! Now I've just got to run the office which is at home, and which I descend upon when I get babies to sleep.
S
That's great John. Thanks.
I think there are alot of investors, like me, who want to know more about a region but waste alot of time on Google trying to find useful, timely, objective data. We don't necessarily know how to access the information you are providing here, or what information to use, or how to use it. Especially when it comes to sophisticated use of statistics, like you said, overlaying and collating data – eg converting population growth data, buildings approvals data and no. of people per household data – we don't know where to start. Then the idea that again, the larger statistic might lead you one way, but more intricate consideration of the data might lead to a more specific investment decision (eg, a region might show strong population growth, and on that information an investor might go and buy a house there. More careful inspection of the data shows that the strongest area of population growth is in the age group 60 years plus, so another investor, using this information purchases an investment property with these peoples needs in mind. They have a stronger result, due to their more careful research.)It's all about ROI, and in this case, the investment can often be your time.
John, you just about need your own thread with all of this links to information on them. It is a real education in where to get this stuff, what is available and how to use it.
cheers
SWhen I was a teenager I worked in a video shop for a couple of lesbians (that's beside the point but it adds to the colour of the story) who were a bit obsessed by Star Trek. They went to Star Trek conventions and could speak Klingon. Other than that they were pretty normal….
Ahh, thank you Dan, so there is the distinction. So long as you don't BUY a PPOR.
So, for us. In 2002, we rented out our PPOR after living in it for 2 years. We moved into employer provided accom for about 4 years, then we bought another house as a new PPOR. Our CGT starting point for the first house is 2006 – is that right? So CGT is payable on price sold minus 2006 price (adjusted for inflation)?
That's terrific, I didn't know about this until this thread. That's going to save us a bomb.
cheers
S
Hi
Love a debate, so I'll put in my two cents worth."We are in a housing bubble" – agreed, but I also think that the govt and the banks will do absolutely everything they can do to stop a dramatic busting of the bubble. I wish they wouldn't.
Maybe the enormous rate of immigration, the trade shortage and the cost of development will mean the bubble is sustained for the time being.
My prediction – at risk of being shot down, I'll go out on a limb. Stagnant or low price growth until everything else catches up with the price of housing. No dramatic plunge, at least not across the board. Possible a plunge in values in some areas. I think that if the RE market does drop by 20%, across the board, then there will be some serious economic problems in Australia. It will mean that the govt and the banking sector have lost control of the economy and we will be in some sort of free fall. It's scary and unlikely but possible. I wonder what the banking sectors tolerance of a correction would be. I mean, how much would have to be wiped off the value of Australias real estate to destabilise the banking system? You should see the price of farming land. I don't mean hobby farms, I mean real pastoral land. I can't work out how graziers are paying what they are paying for the land. Perhaps because of drought subsidies on interest, don't know. But I think that the banks have got themselves in a situation where the market is overpriced, but they daren't make any moves which may stimulate a correction because it would wipe too much off their own books. That might be happening in other types of RE too.
So what am I doing – continuing to reduce debt, monitor the market and invest in cattle for the time being. Planning an investment strategy that focusses strongly on cash flow (generating equity by paying off debt). Considering investments in areas that may experience strong growth due to local factors. Also considering making some investment in shares.
shoot me down – love the debate. Makes us all smarter
Hi John,
Thanks for answering the question about who you are, and for the further information you have provided in both threads.I think that the information you are providing is certainly interesting, and I wish I had more time to spend following your links and considering the data for myself.
Personally I prefer to view the RE market, not only in its macroeconomic context, but in the context of the individual towns, suburbs, regions etc which I intend to invest in. Sweeping generalisations about the state of Australia's economy compared to other countries, and other macroeconomic indicators are useful, but thought needs to also be given to the invididual economy of each region. Mackay – mining, Townsville – defence, mining, health, uni, Sydney – corporate, Newcastle – steel and power etc etc.
As you are obviously knowledgeable about sources of information, what can you suggest to fullfill the need to investigate the microeconomic health of an individual region?
Sometimes, statistics are too retrospective. I think you mentioned somewhere that it is useful to look for trends, much like a stockmarket analyst would. Wouldn't it be good to have that sort of data available for real estate? Perhaps it is?
S
v8ghia wrote:except for the Dr.Spock book bit – while he now disagrees with his earlier 'opinions' ,
CheersA common misconception – have you read any spock? I refer to his discipline techniques a bit and find it useful food for thought. Dr spock died in 1998 at 94 years of age – you must be better connected than me if you have his current opnion.
Syou only pay CGT when you sell. Never sell, never pay. Only pay income tax on rental income (unless you run a loss)
Someone more knowledgeable might be able to confirm this.
