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skuz
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@skuz
Join Date: 2009
Post Count: 40
February 24, 2009 - 7:37 am
Unfortunately for me I live in Victoria and the government hasn't waived the stamp duty for first home buyers. However, we do get a $3,000 boost
I will keep that in mind when I purchase a property. However, trying to find a great deal in the inner west of Melbourne which is a high growth area is no easy task.
My parents got a good deal on a property in the outer suburbs, about 25km from the city in a new estate. Unfortunately there is an abundance of properties being built and sold in that area and prices have hardly budged there for the past 5 years.
skuz
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@skuz
Join Date: 2009
Post Count: 40
February 23, 2009 - 12:46 pm
I'm also looking at some properties that are off the plan but it just seems like the stamp duty saving have simply been added onto the price of the house in order to maximise the builders profits. I reckon it really depends on the property you're buying.
I've seen older (5 years old) 2 bedroom units in Melbourne's inner west selling for around $320k while brand new ones in the same suburb with the exact same features (single car garage, one bathroom) selling for about $430k. The rental income from both properties is comparable. It just seems like the whole stamp duty savings stuff is an excuse to dratically increase prices.
skuz
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@skuz
Join Date: 2009
Post Count: 40
February 20, 2009 - 5:58 am
hbbehrendorff (interseting name), I can see where you're coming from. Your strategy is safe and reduces or perhaps even eliminates risk altogether. I understand that speculation can sometimes be a dangerous game when it comes to the property market and any other wealth creation activity, however I think if logical steps are taken debt can be used to accumulate wealth at a much faster pace than making sure everything is paid off first.
At the moment I don't have the funds to make a sizeable deposit (it would be around 10% of the property value at best) and it would take a very long time to pay off the 90% that are remaining. Admittadely I am very fresh to the property market, at the moment I am looking to buy my first home that will eventually be used as an investment later on. If I was to wait to pay off the house before embarking on another investment oppurtunity I would have enormous amounts of equity being un-used. I'm thinking as long as the projected growth in the property is at a rate above what the outgoings are (interest repayments – rent etc) then it is a pretty safe bet.
skuz
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@skuz
Join Date: 2009
Post Count: 40
February 11, 2009 - 6:09 am
I'm debating the exact same thing. I could go with a smaller newer property on a smaller parcel of land or a larger much older porperty that probably needs some work done to it although comes with a large block of land.
I would like to sub divide the land, possibly have three subdivisions from the one block of land, but I don't think I would have the funds to do that for a very long time. First of all, knocking down an old house could cost a fortune. If there is asbestos in the property you'll have to get specialists to come in and do the demolition and that could up to $20,000. Subdivision alone could also cost heaps, probably somewhere in the order of $50,000 to $80,000.
Have a think about all these costs and see whether subdivision still seems like an attractive option.
skuz
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@skuz
Join Date: 2009
Post Count: 40
February 10, 2009 - 11:26 am
They don't have any non-deductible debt except a very minor credit card balance. Probably $500.
If CBA doesn't have a fully transactional offset account is it possible to just have all their day to day funds be in like a streamline account and then they can deposit whatever excess they have into the offset account?
skuz
Participant
@skuz
Join Date: 2009
Post Count: 40
February 10, 2009 - 5:30 am
That's a really good idea! Thanks islandgirl.
I found the home loan formulas on the net and have generated a spreadsheet.
(http://www.datadynamica.com/FinCalc/Fin3.htm)
Is a maximum interest rate of 10% bleak enough for the next few years?
Also, can anyone explain what the advantage of paying an interest only loan on an investment property is? If I pay off the principle I will also own the property. With an interest only I will never own it. I'm hoping to acquire as much investment property as possible but don't see interest only loans as a way of achieving this.