Forum Replies Created
think about this:
if you buy a home for yourself, get something you can stick a 2 bedroomed granny flat under or out the back of, and rent that out to a couple of quiet people (only works if you are in an area where renters want to live). pros-
-someone to help with gardening, mowing lawn.
-added security if the tenants are decent.
-added value to the property.
-rental income without paying extra stamp duty in and out in NSW.
-cash income = tax free income , if you get the right tenant.
– i think the FHOG may actually become more lucrative in the future. However, I am unsure if you can still get it if you have already bought an IP.Bruce
Mooloolaba, QldI rediscovered the joy of not touching a computer for 4 days, and getting back into the bush. Walked morn and afternoon through native scrub, spotted over 20 different types of bird, one echidna, and only one snake, which was under the wheelie bin when I moved it when leaving the bush house this morning. Also learnt that bush pigs are ok to eat even when they have a gut full of parasites, and that a horse can kick you with its hind leg even when you are standing in front of the hind leg. Also that a wolf hound is a better pig hunting dog than a terrier, because they are only interested in pinning the pig down, not ripping it to pieces. Also learnt how to clad a house with corrugated iron. Beats sitting on an everincreasing butt, doing coffee and diddly squat in urban cafes huh?
Bruce
Mooloolaba, QldOK I’ll play a silly game.
Has anyone looked beyond self interest to consider why the Carr govt did this?The extra tax will pay the salary increase of nurses and teachers, fund public transport infrastructure upgrades, and prevent the govt from growing a larger deficit.
Secondly, the tax changes will take investor speculative heat out of the market thus favouring first home owners. Hence, more renters will be able to gain ownership, and then have something in common with the posters here.
Sure, these comments are provocative, but they need to be considered. Free education and health care don’t come for nothing guys and girls. And I’d challenge many here to go and work as a teacher or nurse for a week and see if they’d keep doing it for $18 an hour for the next 20 years.
Bruce
Mooloolaba, QldI had mixed feelings about Brad Sugars.
I know the power of group behaviour as he outlined…getting like mindeds with intent together can be really powerful.However, I wonder how Brad derives the $8000 value of the week.
At the end of the day, making money is a simple concept. You find a way to supply demands at a price that allows you to make a profit, in quick time, while not going to an early grave with the effort.
I got the impression Brad Sugars sells nothing more than 2 things:
– +ve cash flow property investing.
– buying underrealized businesses, increasing turnover, then selling.Personally, I think the +ve cash flow investment message isn’t relative post property boom. To make gains as easily as Brad or Steve did pre 2004 cannot be done in 2004, at least not as passively. I doubt Brad would tell you that.
Further, if Brad’s best foot forward re building businesses is the example of the chinese takeaway featured on ABC, then I am not impressed. There is nothing smart about 2 people working 80 hours a week each for 16 weeks to make a goal profit of $80k, (minus in, out and operating costs, and capital purchases). This little example would have been lucky to net the 2 owners $20 an hour for their labour. The two could have gone out and got full time jobs working for others, and faired better time and energy wise, plus they wouldn’t have the stress of holding a business difficult to sell.
And the idea to franchise the pastry products is Mickey Mouse stuff too. Franchises are passe. It is extremely difficult to find a capable person willing to buy into an unproven franchise. I know people who were with Brumbies Bakeries from the beginning, and saw that chain go through a full life cycle in a very short time span. Franchises can too easily become a pyramid selling scam, with the last in being the ones who do their dough. Even Macca’s restaurants aren’t the cash cows they used to be.
I would personally rather spend $8000 with a good business mentor, who is familiar with accounting, general management, and feasibility studies. Their experience is invaluable, and my bet is that they would offer more bang for buck than Brad…
In saying all that, I am not bagging people trying to do what Brad is. I would dearly love to be mentored by the truly intelligent and ethical and experienced. If a guy or girl comes along who has those traits, then I’ll be in the front row.
Bruce
Mooloolaba, Qldwhat state do you live in?
Bruce
Mooloolaba, QldPrechter’s book was one I picked up in Mary Ryan’s last week, and couldn’t put down for 15 mins. I recall he recommends gold and bonds or treasury notes within stable democracies if things go awry. Swiss cantonal bonds were one of the favs.
Bruce
Mooloolaba, QldI have been reading macro economic lit recently. The concern many analysts have is that large Capitalist nations have been relying on growing household debt for much economic growth in recent years.
They argue that this consumer debt is fast approaching a ceiling because the domestic market cannot afford further debt. i.e. to buy more non income producing homes, and depreciating non productive assets. As domestic markets max out on unproductive debt, then domestic markets around the world will slow consumption. This will slow international trade. Thus, with a slowing of household spending, and slowing in demand from trading partners, industrialized nations are in for significant slowing in growth.
All this boils back to the point that not all spending is good, even if it props up a nation for a decade. Spending that ensures future economic growth is expenditure on making the production of goods and services more efficient. Doing renos and property booms do not sustain economic growth.
Bruce
Mooloolaba, Qldsome students are good some are bad.
I’d budget for ripping up the carpet eventually.
I’d also screw the vendor down 20%, and not move up past 13% discount. In a softening market, it is a psychological wake up call to make an offer 20% lower than the list price. The market is softening right across Brisbane in my experience….I have seen drops in Wynnum Manly, Sandgate, Aspley, Banyo, New Farm in the last 6 weeks.
If the students leave, the greater rental market will give you a much lower yield.
Take into consideration that there are a lot of forces acting now to weaken the market further.
– Investors are waking up to low yields and are holding back buying low yield properties.
– The supply of investors is not infinite. Many have already bought into the market, therefore there are less around to buy.
– More properties are coming onto the market.
– The RBA may raise rates in Mar/Apr, especially to curtail household debt.
– Household debt is dangerously high. Many home owners cannot afford to take on more debt, and will have trouble clearing current debt. This will inevitably slow artificially maintained domestic growth. This is the strongest factor that will keep property prices down in the coming 5 years.Bruce
Mooloolaba, QldHere’s two RBA publications that make interesting reading re interest rate changes.
http://www.rba.gov.au/Speeches/sp_ag_270204.html
http://www.rba.gov.au/PublicationsAndResearch/Bulletin/bu_feb04/bu_0204_1.pdfI still think the rate could go either way. Pressure not to go up comes from trying to keep the AUD from rising further, and hurting exports more. It also seems investors have exited the property investment market in droves, so why raise rates and hurt young mortgage holders more.
Forces driving rates up are the unprecedented level of consumer debt. It is atrocious. And needs to be curbed further. However, the RBA would have difficulty explaining how a rate rise curbs consumer debt. Esp considering many of us carry an average of $2500 at 16% on credit cards.
The red herring amongst all this is that the RBA are focusing on the economic recovery of the USA, Japan, and Europe. In doing so, they seem to be making the point that exports will go up. This then allows them to let the AUD rise higher and suppress import values.
Bruce
Mooloolaba, Qldre the Bris-GOld Coast Corridor, I am a little cool on it. Back in the 80s when it first took off, lots of people moved up from down south for cheaper housing. There were a lot of social and economic problems due to poor job opportunities. The same can be said for the Caboolture Shire in the north.
I accept things have changed a bit since the 80s, but i still think it is wiser to buy where the job more solid. Brisbane City seems to still have the edge over the corridors in that respect.
SE Qld employment is still very much local service based, not a good thing considering the growing level of personal debt in Australia.
Bruce
Mooloolaba, QldMy gold standard is to look for where the jobs are going in the future. In Brisbane, that means near the airport, as it is the last vacant land in Brisbane City and the council has earmarked it for future commercial dev’t. Suburbs nearby will benefit from increased demand. Am not saying which as I am looking there at the moment.
My other view is that many wise investors cashed up last year selling a proportion of their IPs. They are sticking the cash into many things, including trading up to a better located PPOR. Hence I think cg near city waterside burbs will be firmer than many landlocked burbs.
As for road works, brisbane is going to have a new underground road within the next 5 years. I don’t know the details but it should be on the BCC website. A 3 year old tunnel has helped gateway traffic off Kingsford Smith Dve get easier access to the inner western burbs.
My personal preference in Brisbane is to stay near the Gateway Arterial road on the north side of the river. The northside is older than the south, and underpriced cf the south. It provides excellent access to both coasts, both sides of town, and into the city via Kingsford Smith Drive. There is a trainline close to most of these burbs as well.
Closer in, Teneriffe and Newstead are undergoing a lot of beautification along the riverfront and I think growth will be good there, though it is mainly apartments. There is a lot of commercial there currently but warehouses are being converted into apartments already. The area is close to irrepressible New Farm, and a hop and skip onto the gateway or city. A network of bicycle trails along the river should allow residents to cycle all the way to the city eventually. THe citycat water transport service is proving very popular too.
Bruce
Mooloolaba, QldAs a baby boomer myself, I am sad to say that our generation is far more self centred then any before. They have much of the wealth of society tied up in assets and high paying jobs, however they are voracious consumers. Their one saving grace is that they are not afraid to break conventions.
I expect that nursing homes and hostels will be designed differently in the future to cater for boomers. More aesthetics and things to do to keep one interested. As long as dimwit backward councils pull their finger out and recognise the need to allow higher density dwellings for such.
I tend to agree there will be a boom in the wellness industry too, as boomers like to take health care into their own hands.
I have long been interested in reducing the cost of housing for the elderly. God, people over 65 don’t need a 5 bd, 2 bath, 3 dlug, monstrosity. Why have all that wealth tied up in a house when it could be invested in the the share market, grand kid’s education, investing in son’s business etc etc.
As a boomer who did a lot of backpacking before it became a consumer item, I am not afraid to live in cheaper communal type settings when I get older and infirm. Such settings are much healthier in so many ways, then living with spouse alienated in suburbia.
As for the govt talking about seniors working longer, it is to be expected. Ageing boomers present a real problem. pensions cannot be sustained as they curerntly are, nor nursing home care. ( I am a physio who does contract work for a home and know first hand the problems). And I am also intending to work part time until 70-75, health willing. i have a couple of great role models in this respect.
A large part of the solution lies in families taking more responsibility for their family members. After all, it is the children and grandchildren who benefit most by a grandparent being put in a home, as they end up with more free time to pursue their own self interest.
Bruce
Mooloolaba, QldAh Westan, Invercargill was your secret spot huh?
Mini, suppose you are in there too…
Mini and U10,220,506A, I had reservations about Invercargill cg when I first heard about it last year. In the US, university towns don’t have the same cg as industrial towns. Maybe it is a combination of demand from one sector, one that leaves town for 2 months every year. However, yields still climb at market averages. I believe banks are pretty unimpressed lending for purpose built student accomodation too.Meanwhile, always trying to stay one step ahead of the pack, I am talking with sandstone university senate insiders as to where they are next expanding satellite campuses. Nice piece of info if you can get it…
Bruce
Mooloolaba, QldSaw the C-M suburban median price listing over the w/e. The older I get the less I trust median prices. If a suburb is historically 600m2 lots, and then the council changes zoning laws to allow apartment blocks and 400m2 lots, or a major antiquated industrial allotment has a new res estate put on it, it makes nonsense of median price comparisions from year to year.
RPData is also often 6 months behind with their updates. Which means the most up to date source of info are the local REAs. But can you trust them!!!
Seriously, if the boom hadn’t happened yet, I would have considered setting myself up as an agent. THink of the advantage these guys have. They get a chance to skim the fat before releasing to the rest of us. And some independents really give the franchise operators a run for their money.
Bruce
Mooloolaba, QldPisces,
“Therefore the best tax vehicle really is one’s own house.”
I would argue that because PPOR mortgage rpts are made with after tax dollars, outside of RE booms, an IP is a better tax vehicle.
Bruce
Mooloolaba, QldThe reason Invercargill yields are up is because the local university adopted a fee free policy. This led to around 2000 extra students moving to the town. Before this, the town was declining rapidly. The locals came up with the idea of subsidizing the fees in a desperate measure to turn the local economy around. It has worked brilliantly and is often studied by struggling regional councils in Aus, NZ, and Canada.
I am surprised that you can still buy +CF houses there as the RE boom was being bandied around over 12 months ago.
Bruce
Mooloolaba, QldDavid, 2004 isn’t 2003. Steve put that book out when it was pretty easy to find +CF (positive cash flow) property in big cities. You’ll find it more difficult to get +CF IPs these days.
I would suggest you look into improving the value of what you already have first. You may find council won’t let you put a second dwelling on your 50 acres unless it can be proven that it is to house a worker related to primary production on the property itself.
I’d recommend you sit down and work out what all your options are to improve your property’s value, talk to as many locals as possible who might know more than you, then go to council or a town planner with your ideas, and see what they say.
If you can get that second dwelling rented, that will be probably CF+, as the land content hasn’t cost you anything. With the extra passive income and addedf property value, you’ll have more equity to borrow against.
A lot of seasoned investors are just waiting and seeing with the property market at the moment, so don’t feel like you have to rush out there for fear of missing a great +CF opportunity.
I’ve been following a few bayside suburbs in Brisbane for the last 3 weeks, and one property in Wynnum was listed at $660k 2 weeks ago, and the owners will take $450k this weekend. The market has definitely softened. Another in the same street was listed at $525k, and didn’t get a bid at auction last weekend. The agent begged me to make an offer of $425k yesterday.
Bruce
Mooloolaba, QldJulian, using adsl and fax on the current fax line should be fine. Get a techie to do it, and ask before he comes out whether he can set it up like that.
Basically, he’ll create a new wall jack using the current fax line which you will plug the adsl modem into. The modem will be connected to a router, and all the computers will plug into the router.
You should be able to leave the current fax line connection plugged into your computer as is.
ADSL is designed to share calls and internet on the one line. Make sure the tech installs a noise filter when he ‘splits’ the fax line. This enhances adsl speed when the fax is operating.
Bruce
Mooloolaba, Qldjulian, products like cyberpatrol
http://www.cyberpatrol.com/product/quick_start_guide2.aspx
and
netnanny
allow you to block access to specific users between hours chosen by you.
Bruce
Mooloolaba, Qld
