Forum Replies Created
Hi all
Thank you for all your replies.
I think I will change my strategy and focus on houses now. Although the unit might be easier to rent in the short term, I think the true value might come with the future capital growth in the property. Besides, I think it will be a nice change to be able to finally buy a house, even if we won’t be living in it.
I am looking at suburbs not only in Campbelltown itself, but also the outlying areas such as Bradbury.Simon
Up until yesterday we hadn’t thought of new house, or ANY house for that matter! We thought that because we wanted a rental cashflow that a unit would be better for rental than a house. However, as you always start talking to people when you start these journeys, the general consensus (including this forum) is that for the money, a house seems a better option. It makes sense in term of the capital growth and land value. We reasoned that the differences are:
1. You are buying a 3 year old unit vs a 30-40 year OD house. I would think the depreciation on the unit would be much better.
2. The unit has nothing to spend on (it already has a tenant) while the house would probably need updating a bit.
3. The fact that more units are being built in the area, does that mean the value of units will go down due to an excess of stock, or because the people living there or moving to the area prefer units over houses?If houses are as easily rentable as units, then we will certainly look at them. We just think the initial costs of a house will be greater than a 3 year old unit, thus cutting into our rental percentage.
We are confused!!Simon
Thanks for your comments.
Looking on realestate.com most of the houses don’t appear to be less than 450k to 500k. Not sure whether you would be able to re-coup the rental return, especially after you add all the costs of purchasing it.
I guess the unit would suit a couple or professional, and the house a family.Simon
Hi Gazza
I agree, although all that has been tried before, including mediation. It's all about revenge and not wanting to even give me my share. Lots of negotiations and possible outcomes, but unfortunately blind hate has has taken over both her and her family. For her it's all about money. Sad but true.
Hopefully she will finally listen to her solicitor and come to some agreement with me.
Simon
Hi all
Thanks for all your wonderful comments.
All my life I have tended to make snap decisions without really realising the full consequences of my actions. Sometimes it has worked and sometimes it. Hasn't. This time, I can't afford to be as frivolous with my money again. Therefore, a plan is needed. As the settlement will most probably end up in Court next April, the road is still still long.
I just have to learn now for once in my life to have a plan and a strategy. That will be a first!
I certainly want to purchase investment properties that will bring in an income, as I will certainly not be relying on a pension when I retire! I guess as the other posts have said, once the money is finalised I will have a better idea of what I can and can't do.
Simon
Hi Shahin
Thank you for your reply.
You are right when you say that it all depends on the amount I will get.
This is my first time I have ever rented, and frankly I hate the fact I am not putting that money towards my mortgage. Having said that, I understand the premise behind your comment and maybe that is an option I need to look at. As I am a flight attendant, the prospect of having to rent a room out or share is not something I would entertain, as my days and hours are all over the place, and frankly I like my privacy when I get home.
The idea of buying out west is a very sound one, as I too believe there is more value for money out there. I am currently living on the Northern Beaches in Sydney, and although beautiful, my work is at the airport, and although not a 9 to 5 job, the travelling time is also a factor to consider, especially when you do a 14 hr sector.
Probably the unit idea in Sydney and the house in another area is what I will probably seriously consider. Talking to my broker, based on a $400k settlement, I could probably borrow another $370k or thereabouts.
Thanks
Simon
Thanks Mackar
Unfortunately Warnbro is close to Rockingham, so quite far from Joondalup.
Thanks anyway for the tip.
CheersSimon
Hi Ming
I guess it depends on how you feel about it. I live in Clovelly (near Bondi) and a large number of apartment blocks and units overlook the cemetery, which overlooks the ocean. No chance of ever having your views built out!!
It appears it does not bother many people, asany units with such views are always sold. I guess if your renters are predominantly Asian, then maybe you will find it a bit harder. Views and water always sell/rent.
Cheers
Simon
Hi Dee
Thank you for your offer. It would be great if you could.
My e-mail is: [email protected]
Again, thank you.
CheerSimon
Hi Hayley
Know all about the nasty divorce settlement.
I too have started back into the property market and I am learning fast.
My suggestion if you are up in WA, is to maybe invest in a good buyer agent in Melbourne who knows the area and will hopefully make a sound investment for you.
I currently have one in WA and about to contact another one in QLD. It’s hard if you don’t know the areas, and harder still when it’s your first IP.
I figure if the first property is a winner, it will boost your confidence and then you might be able to go on your own from there.
Also try and buy Australian Property Investor magazine. Valuable!
Good luckSimon
Yes Richard, true. Not a lot, but I guess I am steering towards trying to reduce our mortgage in Syd. Guess it’s unpalatable to give $10K to the tax office, but then again the saving might be in the long term of the interest we save on our mortgage….
Hi Terry
There is no mortgage on the land. We have paid it off in full. We only owe $45K to my wife’s mother and $10K in agent’s commission. The rest we can dump on the mortgage of the Sydney unit, until we need to pay the tax. I believe though that can be deferred using our accountant. It is not a sure thing that we can sell the land for more next year, as new blocks are being released in the estate. It also seems the market has run a bit out of steam down there.
CheersSimon
In my very limited experience with property I have learnt that once you sell it is very very hard to buy back in again. I would look at other options before you end up doing a fire sale. Besides if you go to a bank manager asking for a loan and tell them you have $80K as a deposit or three properties, they will probably prefer you had 3 properties.
I don’t know…just a thought.
CheersSimon
Hi all
Thank you so much with all your ideas. Certainly food for thought. Main reason for selling (though we don’t really want to) is so we can get our debt down on our unit in Clovelly, NSW. Paying quite a bit off our mortgage and we would like to really shave a big chunk off it.
Regarding the GST component, I thought GST was only payable on new land that was sold by a vendor such as a developer. You didn’t pay GST if you re-sold the land. Can anyone confirm this please?
Thank youSimon
Hi PK
That’s what we thought. Although the tax benefits would be an incentive if we built, we might do better if we took the money and ran. That way we can put the money towards other properties.
Thanks for the advice.Simon
Hi there
Monopoly is right. Don’t panic. Doing a bit of homework beforehand will probably prevent you from rushing headlong into impulsive buying. Look at your local area first, as it’s probably the one you are most familiar with. We are based in NSW and have one unit we are currently renting out. We also bought a block of land in Margaret River WA which in 12 months has gone up by $100k. An alternative might be for you to buy some land and either build on it or sell it. I know it is not bringing you in any rent, but might be a good start and allows you to learn without making massive financial mistakes. I too panicked at the beginning thinking that by the time I got myself organised there would be no more properties left. If you slow down and research you will reap the benefits.
Good luckSimon
Hi Humph
We have a 2 bedroom unit in Clovelly, right near Gordon’s Bay which we have been renting for the past two years. We have been getting about 3% return on rent. Bought the property at the peak of the market and paid $590K and was getting $400 p/wk. Has got ocean views though.
I guess there are a lot of units around Coogee and you need to work out what makes yours stand out from the rest. Inner West may not be as glamorous yet rent returns might be a bit higher. We know that our Clovelly property will give us capital gains in the future. We are currently renovating it and will move into it early March.
CheersSimon
Thank you for the feedback.
I guess though it does not replace one’s own research.
I might get some info from them.
Thanks
SimonHi Bert
I am still very new at this game, but what I have learnt so far is before I part with my hard earned money, do a lot of research. I have the money to buy some investment properties now, but I just don’t feel confident enough. I am using the internet to look at different areas, e-mailing real estate agent for info and checking out the demographics of areas. Also reading this site has been extremely useful. There are so many people on this forum with fantastic ideas.
Read, learn then spend.Simon
Hi Cheryl
I too am very new at all this. I have also been looking at +ve cashflow properties on the net and have come to varying conclusions. When I find one that tells you how much it’s tenanted for I always look at it in greater detail. How long have the current tenants been there for, what is their current contract, are they happy there, and if they vacate what would you get the same rent?
I have no idea whether this is the right strategy, but I understand that sometimes tenants are put into a property so it looks good for the potential buyer. I have also started to look in the API (Australian Property Investment)magazine what the average rental is.
Don’t know if this will help, but really with investment properties if the maths are right then probably the property is right.
Good luckSimon
