It is probably better to focus on ‘real interest rates’ ie nominal rates minus inflation.

If we head into an economic slowdown, inflation usually reduces, and if interest rates even hold, then effectively, the real interest rate increases.

Historically, the lower the inflation rate, the lower the rate of increase in asset prices (eg property).

It is also worth noting that the increase in the AUD, drives inflation lower through cheaper imported goods, which gives the same increase in real interest rates.

James

I would like to see where and how they intend to recoup whatever it is they give back?? What they taketh with one, the other taketh away (irrespective of what political persuasion).

James

Michael1,
There are also loc doc lenders who might be approporiate in the broad circumstance you mentioned. (If your LVR is ‘well under 80%’)

James

Gerry,

You’ll have

Body corporate fees
Sinking Fund Contribution (maybe)
Special Levy (maybe)
GST on Fees
GST on Sinking fund

Only the body corporate fees will be tax deductible. All other levies/sinking fund contributions are not.

As for structure, you will probably have something like
a. Body Corprate Manager
b. Committee (depending on the size of the complex, probably between 3 & .
c. 1/4ly meetings
d. Need to assign a leader of the committee to liaise with the BCM
e. AGM where balance sheet and P&L are presented to all owners (again if they elect to come).

Don’t have too many people on the committee, because you’ll need more people to have a quorum. Trust me, no-one turns up after the first meeting and then you can’t do anything.

(I’m sure there is more, but I can’t think of anything now)

James

Have you seen the section 32. Is the levy just for Body Corporate rates?

The previous BC notice will confirm who the managers are – ring them and speak to them re sinking fund.

Based on figures it is ~5% gross. Determine other outgoings ie council/water rates, rental commission would be 7% probably, insurances, maintenance, mortgage payments and then determine net return. You may find it is prob. ~2.5-3.0%

You would need to be satisfied about longer term capital growth of suburb. What are other comparable sales for the area? Find that out and if you still want to buy, put in an unrealistic low offer, say $85-90k. You never know, the may be desparate to sell??

James

There will be many. One that I don’t think many do is to speak to the Body Corporate Manager. Understand what works, maintenance, beautification are being looked at. More specifcally, the status of the sinking fund and possible upcoming one-off levies for that work.

Is car-park on title??

James

In Vic, I think it is 2% (recommended), but ultimately its all negotiable. It varies in each state.

James

So what is going to be the catalyst for the decline??

James

Jack,
Fair enough.

I have recently, through a friend of mine, actually look at some of the DVD’s that the NII course had.

There is some fantastic information in there, a lot which re-inforces many of the things that I had some knowledge on and some things which might be more difficult in today’s climate to achieve.

On the whole though, I am taking notes in some of the things that I have listened to…..

Ultimately, is it worth $15k or $55k or $1 dollar??Depends what you do with the information.

James

Majic,
Whilst not knowing the specific properties you own, as a general principle, I would seek to retain the property with the greatest land component ie houses.

Over time, they will grow the greatest, in my opinion.

James