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  • Profile photo of shanebalshanebal
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    @shanebal
    Join Date: 2003
    Post Count: 16
    October 30, 2003 - 1:07 am

    I just thought I’d take some time to reply to you Pebbles as I think there are some things you haven’t considered.

    Tax. Both Income and GST. I assume this will be done through P/L company so you don’t attract CGT. For each prop you’ll have to pay 10% GST. And on your EBIT you’ll have to pay company income tax at 30%.

    Interest payments. Your investor may have to make these if they are servicing the house loan through a standard mortgage.

    Your council/power/water costs are OK but it all depends on what conditions the council imposes as part of the development approval.

    I also think your legals are a little low but that’s neither here no there.

    Doing a quick calc, assuming a everything goes to plan and there are no overuns, I see a profit of more like $150K-180K.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    Post Count: 16
    October 28, 2003 - 8:49 am

    1. Yes. CGT is a federal tax initiative.
    2. If by cosmetic you mean inexpensive, then no.
    3. I don’t think so, but you can claim depreciation on your renovations but this is only good if hold the property.
    4. Haven’t looked at the example…sorry. [:)]

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 28, 2003 - 8:32 am

    Another thing Karl,

    The bank will probably want a registered valuation, not a real estate estimate. These can be two very different amounts.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 28, 2003 - 8:25 am

    BTW,

    I’m only going to forward general property and investment details:

    purchase price
    number of beds
    address
    current return
    contact details

    It will be up to each of you to take it from there. The types of properties I’ll be looking at are ‘generally’ – <$150K, returning 10%+.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 28, 2003 - 8:14 am

    Well if they haven’t signed the contract then nothing has been accepted. You can walk away and so can they.

    But at some point in time you will have to sign a contract to purchase the property, with conditions or without.

    If I were a vendor in this market I wouldn’t accept such a clause because I know that there would be another offer just around the corner.

    I once sold an apartment with a clause that stated the purchaser would have two weeks to determine if the property was worthwhile investment. However, offsetting this clause was the fact the purchase price was significantly above what I believed I could get from other purchasers.

    So I wouldn’t give up hope but I think your chances are slim.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 28, 2003 - 2:51 am

    People,

    We have to very careful with CG tax, it can sneak up on you in a variety of ways. A couple of examples:

    1. If you own a house for 10 years and live in it for the first 5 and then rent it out for the second 5 you are subject to CG tax for the second 5 (there are some ways around this if you still declare this your primary residence if overseas).

    2. If you take in a tenant/boarder then a % of the CG will be liable for tax.

    CGT is one of the more complex and convoluted taxes out there and well worth getting professional advice on.

    Regards,

    Shane

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    @shanebal
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    October 28, 2003 - 2:33 am

    QS = Quantity Surveyor

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 28, 2003 - 2:29 am

    Hang on a sec!

    If milen007 puts a clause in the contract that gives him 7 days to change his mind and the vendor accepts there is absolutely nothing dishonest about it whatsoever.

    However…I would be surprised if many vendors did accept such a clause particularly given the current market conditions.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 16, 2003 - 1:06 am

    Hi Richard,

    I’m not but will be. Based in Sydney until the new year.

    Shane

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    @shanebal
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    October 3, 2003 - 6:53 am

    Despite his European sounding name (dutch?), Dolf is an NZ’er. Although he spends much of his time in the States.

    He runs a nice little property investment vehicle out of Christchurch in NZ that I have shares in. Here is the link:

    http://www.propertyventures.co.nz

    Has some lovely props including a vineyard!

    Regards,

    Shane

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    @shanebal
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    October 3, 2003 - 1:37 am

    There are two ways of looking at vacancy rates.

    1. When I consider a property I always factor in a vacancy rate as a safety margin, no matter how good the property and how much demand there is for rentals. I use 5% of the gross revenue(rent).

    2. The other consideration of vacancy rates is the current level of empty rental accomodation in the area you are looking. Do some research with local letting agents to get a feel for this factor.

    Regards,

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    October 1, 2003 - 12:43 pm

    Thanks Bribie.

    It is one block of land of 10 acres which I am planning to subdivide into 1/2 acre lots. It is in the cooloola shire.

    I have talked to the council and to their old town planner who has since retired.

    I have some information but I guess I really want to get some info from the horse’s mouth to avoid any pitfalls.

    Shane

    Profile photo of shanebalshanebal
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    @shanebal
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    September 5, 2003 - 7:17 am

    Howdy,

    Interested in doing a similar thing in QLD.

    Have 2 blocks and would like to chat to someone who has done this up in the Gympie/Sunshine Coast area.

    Regards,

    Shane

Viewing 13 posts - 1 through 13 (of 13 total)