Forum Replies Created
Hi Guys
Banner in regard to maintenance. i had one hot water system go in 4 years then in the past 2 i’ve had about 5.
If these houses are older then by doing mainenance will it add to the value? Sometimes a coat of paint which would cost say $500 (if you do it) can add 10,000 to the value of the property. I’ve had properties that i painted inside and new carpet that cost about $4,500 but i put the rent up $20pw so it didn’t hurt as bad.
But check the expensive things like stumps etc.
Or facture all these in when you work out what to pay for the home.
regards westanHi banner a fair Question.
i’ve got 20 properties and they are nearly always occupied. i have only one place vacant the tennant moved out last week. I’ve had 10 of these properties for over 5 years and i’ve never had more than 3 vacant (i can’t even remember that). Usually i have none vacant. Because my properties were cash positive i could have 30% vacant and still not be taking money out of my pocket. It appears to me that the high vacancy rates are in certain Areas. Even in Melbourne for instance some parts have high vacancy rates and others very low. My properties are in Regional cities and towns and there appears to be low vacancy rates there.
regards westanHi alf
I’m inclined to agree about the negative Gearing senario. Certainly this person would need to reduce their risk by fixing interest rates and looking at their serviceability. if they are already struggling to make it then you may be right and they should sell. However one other factor to consider is rising rental incomes which may help. The great thing about positive properties is if you buy right you can absorb interest rate rises. Everyone seams to be sure rates will rise. I’m not so certain, the US is not out of the woods by a long shot, its a thickled world and anything can happen. Interest rate rises will certainly harm our economy and that of the US.
People who are over exposed ie negative gearing at 110% finance are taking a big risk. It’s all about risk and reward the rewards are not there in that situation.
regards westanOn the weekend a group of Australia’s leading business people got together in Hayman Island. Those present included Billionairs, three State premiers, and leaders of Banks and Business.
These are some comments reported in the press
“On a housing bust, National Australia Bank chief executive Frank Cicutto said NAB had done all its modelling and was well prepared, but he did not think there would be a collapse.”
“Saul Eslake, ANZ’s chief economist, said the housing market wasn’t yet a “bubble” because prices weren’t being driven up just by speculative investment but more by the halving in interest rates in recent years and consistently rising net incomes.”
In summing up
“Michael Roux, chairman of the Australian Davos Connection, said the generally optimistic scenarios outlined at the conference were a positive sign.”i write these posts because i would think twice about getting out of the market, as some are constantly suggesting. People that make money in Property are those that are in for the long haul. Its a different market to stocks. you should not adopt the same approach to properety that you have to shares. Sure prepare now for interest rates rises as they may happen in 2 years who knows. But property generally moves in cycles sure this has been a long one but does it really matter if property slows to say 3% growth over the next five years, because when the next upswing happens prices will double in the next 5 years. If you have cash positive properties and enough of them you will still do well.
regards westan
Hi mini
you need to write a book also “the adventures of a mini mogul”.
i look forward to the next adventure.
who went to see Mini’s gig the other night and how did it go ?
regards westan
Hi Beancounter
I agree that it will be very difficult to achieve high returns that would make a negative geared property’s return worth the risk. I feel there are still areas that will certainly achieve good returns. Demand in regional cities and towns in Victoria have not dropped off at all. People still want to invest and many are now looking at country towns and are amazed how cheaply they can buy. If you are prudent and look for areas that are growing and have something happening (eg new business’) that will help the population grow who know how much these centers will rise. People are flocking back to regional towns in Victoria reversing the trend when country towns were decimated by the years of Kennett’s Melb focused policies. If the Federal Govn’t pushes to sent immigrant to regional areas as some are demanding this will futher push up prices.
I wouldn’t be buying purely for capital gains but if you can find cash positive and potential you have it made. A friend of mine just purchased a property in a town (pop over 7000) in Vic for 121K the property is an older style House split into two 3Brm houses with a current combined rental of 260pw. the deals are still out there.
Regards westanWelcome back Muppet
i started to think you must have fallen off MtRuapehu.
regards westan
Well he started it.
no just joking, i enjoy our friendly (sometimes) banter.
Anyway it was you who started it Beancounter so its your fault.[
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Actually beancounter i thought most of our discussion was around investing. but i will do my best to be less confrontational.[]westan
Hi guys
Gee Ballarat was cold this morning, i passed through at about 7.30am. Avid a trust wont help because the profits from a trust must be distributed to the benificaries, (or else it is taxed at 66% i think). Unless there is a partner or kids in lower tax brackets. just watch out with CGT because if you sell in the first 12 months then you don’t get the 50% tax free benifit. i’m in a similar situation just had a property done up in Shepparton with a good capital gains but now have to hold for 9 months more, decided to rent it out but when i go to sell it wont look brand new. A good way to do it is rent it out for 12 months then do the reno then sell and claim the 50% Tax free.
westanHi Kristine
have you got one of those RACV accomodation Guides
they have the population for all towns/cities
regards westanHi Fizman
i don’t know about Homepath but see how you go. If they wont find someone else whose rates are low.
I want to put another view forward.
I wouldn’t sell your home at all. I think you can afford to keep it. If you sell you have costs
Agent fees Guess (i’ve never sold a property worth that much) $6,000, moving cost 1000, etc Then when you want to buy again Stamp Duty say $5,000. It starts to add up. The market would need to drop by 5% and not rise again before you buy back in. The risk is that if the market doesn’t drop you may never get back in. Stay put if you refinanced put that extra 3000 onto the loan even if rates rise you will be ahead. I don’t think they will not for a long time if they rise too much it will send the economy into nose dive. Your not in such a bad position you have 80,000 worth of equity in your home even after you refinance just for the $160,000.
westanhey AD
i’m not the other Richmond Supporter. Being true to form i don’t barrack for them anymore.Well at least till they start looking good then i’m back on the bandwagon until they fall in another heap.
It’s all part of the Joy of barracking the Tigers.Yeh it could be worse, my wife barracks for Carlton[
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westanHi fizman
Sorry i’ve repeated some of Richmond’s thought i was writing while he posted his reply
westanHi Fitzman
You are paying 125k @ 6.56% interest 8,200 PA
15k @ 10.95% Interest 1,642
20k @ 11.7% interest 2,340Total interest 12,172 PA
If you refinanced your home with Homepath
and the valuation was 250K @ 80% finance you get 200,000 the interest repayment is 5.65% so you pay 11,300 interest and have 40,000 to invest.But i would not use that money 40K until you get control of your spending, the personal debt of 20k and 15k car you have overspent more than you make. You are living beyond your means it appears.
Put the 40k back on your mortgage and the interest bill is only 9,040 you save over 3000 every year.
westanHow the heck did you back it in.
i’m a shocker at reversing with a caravan but my wife could do it.
westanlawry
i work (alright i’m employed), today though i had an unusual day. I’m employed at a Country Secondary College as a school chaplain, i do student welfare work. Well at the moment we have a group of visiting Chinese students staying with people. Last night two fellow aged 18 and 17 decided to head for the city lights and got a train to Melbourne. i had the job of getting up at 5.30 and driving the Chinese teacher to Melbourne to retreive the boys. Got back to school at 1pm and was told to take rest of the day off.
But what about you ???
Hope you’ve got a note from your Mum to say you can use the forum at work.
westanHouseonly
i agree. The way i see things panning out is- the inner city unit market will drop bigtime hurting a lot on inexperienced investors. What may happen is a ripple effect will move through the rest of the market, the magnitude and effect i’m not sure. When the equity market dropped some people lost a lot of there savings but if the inner city unit property market drops people will loose savings plus be bottom up, owing more than their property. these are the ones who should be worried.
westanhi aussie
i’ve got a max walker game, never played it do you want it before i give it the flick. Can’t say i’ve ever read one of his books to be honest just get a laugh from your Max walker comments.
westanHi crashy
The logical outcome of your arguement should be whats the danger? according to what you are saying the market was so robust back then in the course of 1 yr it dropped 30% but by the end of the year it had regained it all. that sounds like the message should be don’t sell when a downturn happens because recent history says it is very short lived not a collaspse as you continually say.
I think the real situation is as other have said some parts of the market dropped dramatically and in fact took years to recover. from memeory i think in Melbourne the top end suffered badly with Toorak prices coming off worst. But the Mean Price from official sales say there was no collaspse. Just a slight retraction and then a period of flat growth. This is typical, rarely does the market collapse never 30% in my lifetime. But then again we have never seen a bubble like this. Looking at the mean price Prices doubled between 1985 and 1989 then at the lowest point 1992 they were about 8% lower than in 1989. Investors had to wait till 1997 to see the levels of 1989 and then in the past 5 years they have doubled again. I’m happy to email the data.
Regards westanHi guy’s
Richmond you are correct. I’ve decided to shut up about it recently because i felt like we are creating too much interest and therefore competition, so i’ve gone quiet on it recently.
Aussierogue don’t know what you’re talking about i’m following the national “tidly wink” team boy it was a good game on the weekend.
westan
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