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There was a recent article In API that dealt with people on the pension such as yourself. Whereby a outside investor purchased a option to buy their property (PPOR) ie in 15-20 years time.
Part of the option involved the vendor receiving $250 per week (because they were on the pension and struggling for cashflow and didnt want to sell and move elsewhere)
This income was deemed to not be "assessable income" from centrelink and they made a ruling on it because the income was derived from the persons PPOR. They therefore didnt lose there Pension amount and had a extra $250 a week to spend.
Not sure how it would work exactly in your situation. It could be something similar. t if your allowed one principal place of residence and income exemption on money earnt by your ppor.
I would just be careful when approaching for a ruling from centrelink to say. That your wish to rent out your Principal place of residence whilst you .. (go off travel, live somewhere else, look after grandkids) I wouldn't go saying you were going to rent out a holiday home because its clearly just your home.
Selling costs shouldn't be as high as 40k, Try working out based upon 2-2.5% per dwelling
Holding costs should be longer unless you already own the property or have long settlement
gst would be applied when you sell the property. Gst credits can be claimed to increase cash flow throughout the build.
Does your build cost include a turn key finish, including storm water, plants, landscaping, external footpaths, paving etc
Your "invoice, statement of all paid fees/charges" will be your settlement statement which you get off your conveyancer/solicitor
As the opposite example if you were to sell your property for 450k.
Your capital gain would be 40k.
You would have owned the property as a investment for longer then a year. Entitled to 50% CGT exemption.
So your 40k would then be taxed at 20k.
and that 20k is taxed at your marginal tax rate.
Ie if you earn 100k then your income for that year is 120k. So it would be on your Marginal rate 37 cents
$7400 CGT roughly ( But that can be offset by capital losses previously incurred or capital expenditure on the house)
As per what terry has already stated.
– get a professional valuation done when you move out. (the higher the better…) cost around $350-500.
– Your 6 year exemption on that property still remains even if you sell one year later.
– Ie property between years 1 – 6 increased in value 200k, You get a nice high valuation in at 410k-420k. and then you rent the property for a year and perhaps you sell in year 7 for 410k. IN that Year 7 Your capital gain would be zero. Because your valuation (cost base 410k after 6 years) did not increase.
1) The first unit proberly sold to themselves for them to keep
2) Put your offer in at the asking price or less. Why would you pay more just because the agent told you how much the other house sold for.
3) Take anything the agent says with a grain of salt. If they said the other house sold for $520k, go into the office and ask to see the contract.
4) If your going to offer, put your offer in once and then leave it. don't move on your price unless you are gaining something significant. Upgrades to kitchen, bathroom, decking etc.
Its always better to lose a bluff because you'll always, always find something again.
I personally think that you would be wasting your time.
Often valuers will give a indication of value in a range. So your land could of been valued at ($15000 higher then your purchase price – to your purchase price)
But considering you only the purchased the land a few months ago. No bank/ lmi provider would have taken the upper limit of the valuers valuation because your land purchase was within 3 months and they still would question a higher value up to a year after purchase if no market trends suggest any price movement or sales price increases. They just wouldn't do that as it risks exposing their insurances to the banks.
The banks/ Lmi providers also reserve the right to lend on the lower of the purchase price or the valuation. If You land valuation came in lower then your purchase price when you initially bought the property you would have to have put in more money then.
and yes recovery rate is around 5-10% less market value.
I mean just if you had the option from the beginning.
why pay principal and interest and have to worry about your usage/risk of withdrawn money from the loan.
Just pay interest only with a offset account and pay principle payments into there.
thats why you set up a offset account isnt it ? so you dont effect the loan balance
that is definately a wise decision in this case now that you mentioned the number of apartments that have been up for sale.
I find with buying apartments that i prefer to buy in a group of maximum 4 is possible.
This gives you many opportunites in that yours can be the best out of the 4
and also gives you the opportunity in the future to buy another one in the same block and control 50% of the body coporate and that way can perhaps get renovations done to the outside of the units.
Your name should give it away. Time to invest.
Investing in property is about the long term
if your 30 stop thinking 5 years, 10 years time. Think if I want to stop working at 55. That's 20 years where should I start accumulating your assets.
Income earnt in superfunds is currently not taxed when retired. Now I don't have a crystal ball but I can see that's attractive option. Also you have to think even further and think that assets sold in superfunds also pay less cap gains tax then if it were sold in personal name.
and I think the most powerful thing is that with a decent size superfund you can start doing small to medium property developments. Or at least buying the sites and doing joint ventures with builders/developers.
I'm not saying you should buy your first house in a superfund but I'm saying you should have some in your name, some in a superfund, some in family trusts etc.
Whats with all the spam these days.
Lots of posts by invididuals having only 1 post and all have this Houston tx apartment locator.
I know your trying to view the property, that if this problem, this issue that everybody has with the property is solved could mean a increase in short term equity and that has a reasonable return. i say resonable because 670 a week is nothing special when your in a lawsuit and you might have body coporate fees of 10k a year coming out to continue to fight the battle. You have to look at whos involved here.
1) They the body corporate have already charged 10k to the owners already
2) lawyers are involved, length of time these disputes take means lawyers come back for more money from the body coporate.
3) Do you want to buy into a situtation where you could be up for another 10k out of pocket expense
If the body coporate wins then they can sue for the damages and have the issue reciftied. They could then try sue for legal costs but if unsuccessful would end up being paid by body coporate.
If the builder wins then the body coporate might get sued by him to cover his costs.
and they still would have to fix the pool
and if your bought there. Your car might end up underwater!
Id just stay away. Because you dont want to buy a 500k headache. when you already know its a headache.
Yep. Thought that about the banks.
Valuation was done by cba but they would of valued the property at 285k being the contract price. I've given in the RP Data report for the property which shows it was for sale for 295-310k for 8 months. Without selling.
They are requesting how I negotiated the contract. " it was listed for 295k-310k"
I offered 285 k, 10 k below asking price and it was accepted"
Are they doing this to try and get extra stamp duty?
Its a bit strange Ive seen plenty of houses list for sale for 500k and they might be worth that but for whatever reason it rains or people are not interested and it sells for 450k because the vendors need to sell. Does this me they say ohh just because you paid 450k for a 500k home we will charge you what we think its worth. I've never seen getting charged stamp above purchase price before. Suprised me
Does anyone know or heard of them taking more stamp duty then the contract purchase price?
I posted the details in the help wanted section.
cheers wilko
With a decent payg income you should start salary sacrificing $25,000 a year ($500 a week) into a superfund.
that will give a tax offset of 37 cents (current tax rate over 80k) – 15 cents ( current superfund tax rate) = 22% saving on 25k, extra $5,500 a year saved (on tax)
build up that money in a normal superfund account until you can start a smsf
then keep salary sacrificing and use your deposit to purchase property with a smsf
You can do this alongside any normal purchases in your own name at the same time.
Like Richard said i wouldn't give up your income at this stage for a renovation/fix up type property.
With some efficient saving, smart purchases and perhaps some future development projects you could quite easily achieve your goal quickly.
Make sure you have a look at your spending and ensure you really are making the best use of you money.
and as JacM said perhaps you should identify what you are doing with your block of land. If you wanted to you could pay that off in a year. Perhaps build a house on it. Otherwise why do you have it, just putting interest payments down the drain for no return except a potential for capital growth that is going to be offset by your interest payments every year.
Transferring between spouses would come in handy if one Half suddenly got a pay rise whilst the other stopped working. Terry, Are there rules that say that you can only transfer ownership for estate planning reasons over the obvious tax minimisation reasons ?
By current interest rates you mean 5%. Usually development loans they will put on 1.5% on top of residential rates. And sometimes a 1% (can be more) application fee of total loan. So so on 3 mil would be 30k.
Do have to have deep pockets to jump straight into a 18 unit development without prior experience.
Just on unit rates for sqm. Medium quality apartments would be around 1400-1500 dollars a sqm. So 75 sqm looking at 112,500 a unit. But I would say a turn key option to be more around the 130k-140k mark once you count the yards, letter boxes, landscapping, parking spaces, stormwater, garages if required.
soil tests would be like 1k-2k Max
landscapping well depends on how much you do and what mature plants you use. but a landscapping plan could cost 1k
surveying for the initial subdivision could be 5k
then you have the government charges and water charges
if they are all strata/community titled then i would expect around (and this is rough average from other community titled developments ) 10k per home for the water, sewage and open space contributions.
Well can only comment on the information given because i don't know you exact financial position
But if you were committed to building 18 apartments it would depend how many your selling and how many your keeping and to what the cashflow is after the completion to how many presales the bank would require.
General rule the higher the LVR you wish to get the greater number of presales the bank will require to feel 'safe' and they might not let you include presales to yourself/other entities as presales. ie you bought 6 in 6 different trusts that you wanted to keep after the development.
Your LVR could be anywhere between 50% to prob 65-70% of on completion valuation.
Your equity position and income would also have to be quite high to support a interest only development loan. 18 units even at 135k per single bed unit is still a plus 2 million build cost. Usually plus 1 million means the LVR comes down 5-10% off what they would lend under 1 million.
I like your option of obtaining permits and reselling.
this requires less capital but still to get council planning approval requires for 18 units at least 15k.
Are you sure this is what is needed in the area. You could be building a bunch of 1/2 bedroom units in a 4 bed family type area. If similar developments near by then there could be demand.
Your option of building 6 townhouses could the easiest option to make a good profit and also the easiest to finance especially if they were all separate dwellings (ie 6 townhouses with no joint walls).
If you are low in equity, you could commence the subdivision phase after council approval and split the block up into 6 individual titles before commencing construction using the increase in equity to fund the % required by the banks. 6 townhouses completed after subdivision could be done as residential. If you did it at the same time building/subdivide most likely would be commercial lending but at residential rates. up to 80%
Prob adds 6 months to the length of time to subdivide first expect 18 months from start to finish .
