Forum Replies Created
Carl,
Yes, the last few years has seen a substantial increase in property prices, however, if you are investing for the long term, a good property today with regards to location, type etc will still make you money.
The same applies to whether you are looking at -ve or +ve cash flow properties.
James
I agree with James. Establish what you can and can’t afford. Talk to a few brokers, banks, real estate agents etc – hardly sexy stuff, but definitely required.
Understand what you want to go with property investment, map out a five year plan, to give you some guidance as to what direction you should take. No doubt this will change over time, but it will stop you from being distracted along the way.
Good luck in your investment journey.
James (another one).
You may consider paying out your personal loans with the money first, this will increase your borrowing power.
Why don’t you consider buying an IP now, with the market still solid on the Gold Coast, you should get a solid capital growth in the next 12 months. Save what you can in that time and I believe you will be in a better position to purchase your PPOR compared with just saving for the next 12 months.
For example if you assume 10% capital growth on a $250k IP, this will provide an additional ~$25k in 12 months, plus savings. If you elect to save, you can get around 5-5.5% say in an ING account.
In 12 mths, you can use equity in IP & savings to but PPOR if you want.
James
Related information on
http://www.thecouriermail.news.com.au/common/story_page/0,5936,8770292%255E3102,00.htmlJames
My point is that if you are in the your 30’s or even 40’s today, I wouldn’t be relying on super/pensions to give you an enjoyable retirement. So whether it is 55, 60 or whatever, it really shouldn’t be a huge issue for us. Not so for those who are close to retirement age today.
I don’t think that the age of retirement is or should be forever 65. Surely we have to see this as what impact this has on the taxpayer (most of us). We could continue like the US are doing, going into huge debt, and will/have significant social security shortfalls in the years to come. Or make some hard decisions today, which give some surety in the longer term to retirement planning.
James
Our perceptions of distance change over time anyway. 20 years ago, places like Cranbourne, Carloine Springs even Bundoora were seen as far outposts of Melbourne. As long as the business case is their for Jetstar to exist and run profitbaly, then in 5-10 years, Avalon is not going to be that ‘out of the way’.
Rod makes a good point that transport infrastructure will help this perception/reality.
James
For those gen x’ers, super should be viewed as a bit of a top-up over and above your own investments for retirement.
Most gen x’s would be mid-30’s (oldest), so they are going to have at least another 30-40 years before they retire. Surely that is enought time, to financial independence.James
There was a test done this morning on the radio in Melbourne about the time and cost difference coming from South Melbourne to the respective airports.
I think Tullamarine took 29 minutes and cost $46 whilst Avalon took 46 minutes and cost $74.
James
Maria,
There should be no issue that your boyfriend rents from you. Anyone can own a property and rent. From a taxation viewpoint as long as the rental is at a market rate, then from a deductions side, there are no complications.James
Sommo007,
Are you comfortable with the concept of renting whilst investing in an IP. The reason I ask is that many people have a preference to own their own home before they start investing.However as you have seemingly indicated, a home today may stretch you and saving money for a deposit is difficult, because the average lon-term rise in hoouse prices keeps pushing the bar further away whilst you are saving. I would recommend that you look at IP, that allows you to start building wealth, without the financial stretch. Re-asses in 12 months, and if you really want to but your own place, then you could use the equity or sell.
James
Johngee,
I have recently re-financed. Settlement was Friday 13th (this month). Any questions, let me know.James
Does anyone know if there is going to be a Melbourne Property Guide? I thought I recall seeing that the Age was going to do something similar.
James
If summer holidays are 4 weeks, then what would they be doing anyway during the school holidays throughout the year?? (Approx another 4-5weeks)
James
My best friend and his borther do something very similar.. The brother is a builder (with his father) and they have invested/developed property together over the last few years. They also do it through a trust structure.
They are all very like minded and their goals are very much similar. I think if you & your borther have compatabile investment goals and can work together and share the workload, there are significant opportunities out there.
James
Neo,
From what I understand, if you take the equity from your IP to your PPOP, that will not be tax deductible, however, that does not preclude it from being a good idea.If you take interest only and take up a facility on your IP to 80% LVR, this will give you $28k to reduce the loan on your PPOP, which you will be paying P&I.
You may also be doing this anyway, if you have an offset account against your PPOR, you can have all pay & rent paid into loan, drawing out ineterst only payment to IP when due each month. Thereby reducing your non tax deductible interest on your PPOR.
Of course, if you take out facilities to 80% on both, you would have access to $44k to invest in another IP??
James
PS What is neologism??
I agree with Kym. Once you set up the template spreadsheet, it will pretty much do the same thing for you. It will probably be more flexible (tailor it to your specific circumstances) and ultimately cheaper. Of course you need a little knowledge of excel to do it.
In saying that, I have never actually bought one, so there maybe other benefits in these programs.
Ultimately, by setting up the spreadsheet yourself (of course that takes time), you will learn a lot more about the numbers and force yourself to understand the details of your portfolio. (Just my thoughts)
James
If the bank does one are you entitled to a copy?
No. The bank does it to satisfy themselves that the purchase price is not substantially above market price to protect their interests.Validity? Not sure
Is there a way to avoid getting a new valuation every time you seek finance?
Each financier who takes over a mortgage over a property will need to satisfy themselves of the value of the property they hold as security. However, for re-financing, many of the valuations are ‘internet valuations’. They reference the value you place on your property to their database and as long as it is in line with the valuation (within a small %) it is approved.And finally are there independent valuers that all or most banks will accept?
Banks have a panel of valuers who do this work for them. They may have a few different ones, who will do different suburbs or even types of property. Ask the bank who they use. Usually the banks will insist in getting their own valuation and will take that, even if another is done by the same valuer, with a different valuer. However, people have different experiences with valuers and the degree of control you can exert is different in many cases. However, as a result of the market coming off its highs, many banks are not as flexible as they were once (so I hear from the experts on this forum and other individuals I know).If you are having issues with valuations, maybe your mortgage broker can help you. They generally know valuers who work for various financial institutions and your ability to assist them in valuing your property upwards may be greater. Do the MB ‘s agree with this??
James
Hope this helps.
Not aware of financial advisors that wouldn’t steer you in the direction of shares, bonds, cash (or a combination of all).
I would suggest a good mortgage broker initially (and one who has invested in property), there are many on this forum who would be able to help. This will confirm what you can and can’t do initially. A good accountant as well. (I have a couple of suggestions, which I can private message you with if you like)
James
I admit I know absolutely nothing about NZ, however, if the news is in the papers, I would say (as a general rule) it is probabaly too late.
There are others in this forum who have experience in NZ, which have been expousing the potential for some time now. They should be able to provide some better information.
James
