Forum Replies Created
Ripstar,
Did you organise finance through a bank or mortgage broker? MB’s tend to see the valuations and could have confirmed what it was. Banks generally won’t tell you, however some, if there is a greater than 10% differential between purchase price and valuation will let you know out of professional courtesy…
When you purchased, did you confirm any recent comparable sales, this would have given you a clue as to what would be the current market value for the IP your purchased.
Foundation,
Are you saying that we are going to experience 10 years like Japan has during the 90’s. The differences between Japan and Australia’s respective economy’s are as vast as the two country’s cultural divide…I can’t see the relevance.
Now revisit your assertion that:
“in 10 years’ time, that property is going to be worth considerably more than it is today”Is there any founding logic behind this statement
Actually there is, 100 years of history in this country…
Also of note is the fact that residential property increases in value by less than 2% in real terms, and requires maintenance expenditure.Not sure where you get this information from.
Whilst I understand and accept your current anti-property view at this time, loosely related data and broad generalisations without facts doesn’t add to your position.
Humph,
It might be worthwhile to purchase Residex’s predictions Future Growth, which outlines their predictions of capital growth for the top 100 postcodes in the state of your choice.
It is released/updated every quarter and costs $185 (?). May assist in answering your question…
Couple of observations…..
Myopia, def..lack of discernment or long-range perspective in thinking or planning
This is a broad generalisation, however, people IMO are more focused on the now than a 10 year outlook, so any discernable change in the property market (PM), is likely to have a proportionately greater impact, and given the recent changes in the PM, a negative one on people’s perceptions, beliefs and therefore their actions…Self-fulfilling prophecies if you like.
Plus it doesn’t generate sales, public discussion to talk about a 10 year time horizon to property investment than it does compared to a emotionally charged headline about dropping home prices
Economics – The wealth effect, which is the variation in wealth has a significant and influence on household expenditure .. Therefore, the perception of falling house prices makes people feel their wealth is being reduced and therefore will have some impact on consumption.
Therefore given where we are today in the property cycle, and falling prices, this has a very real effect on the economy. It is therefore a newsworthy and real issue todat to discuss in the media.
Bargains
Furthermore, if you thought the market is falling, then why would you not wait until you thought the market ahd reached its new equilibrium. So maybe waiting for example 6 or 12 months may get you the same asset but at maybe a 5 or 10% discount….On the median house prices today, this approximates to stamp duty plus other incidental costs….Given that you have to finance and fund today, not in 10 years, that might be a very sound strategy….JenD,
Site Value – market value of the land only
Capital Improved Value – total market value of the land plus buildings and other improvements
Net Annual Value – for residential dwellings, the NAV must be 5% of the CIV*market value is the valuations made by the council as provided by registered valuers
The rate in 5.0 cents, is the council determined figure to apply against valuations. ie valuation x rate in the dollar. Obvioulsy each council will set this as part of their budgetary process.
The valuation date was made on 1/1/2004 and effective on the rates in FY05 (1/7/2004 issued rates notice)
Land Information Certificate
The State Revenue Office uses site values for the purposes of assessing land tax. The council valuation used for 2004 and 2005, is that valuation which was used in 2002…The different valuation dates between the two notices ie 1/7/2002 and 1/1/2004 is the reason why Site Value & CIV are not the same.
The Valuer builds a profile of value levels for each different area / property type by analysis of recent sales and leasings. This information is then applied to individual properties, taking into account the different characteristics of each property
The above is an extract from my local council’s web-site, which applies a general property market approach and fits it to a specific property…So whilst there still shouldn’t be a huge difference, it is probably not a realistic guide to the current market value….Recent comparable sales of similar properties are better for you in ordre to judge what would be a fair and reasonable price for the property.
Trust this helps
Giddo,
More detail please….for example
1. How big (ie size sqm)- this might impact financing
2. How many in development?
3. Who is the the target market for rentals eg students
4. Comparable sales in area. What do you mean by valuation (is that sales price or a valuation by valuer?)
5. Wish to keep for 3 years & then lease out – What does that mean?? Aren’t you renting out anyway?
6. Finishes, quality of constructionHC,
Try this link http://www.national.com.au/Online_Services/0,,21473,00.html#3
Choose Home Buying & Selling cost calculator. (It just does not include CGT)
Further to Derek’s questions, could you not assign the valuation to lender x….??
Retire40,
You mention the consolidation of credit card debt into your IP loan I presume (?). Well you won’t be able to get a loan first until at the very least until the $5k is paid off first. There is no chicken or egg dilemma here!
You need to have a clean history or a valid reason to explain away any deafult. Put yourself in the position of a lender who does not know you. Based on your record, without the debt being extinguished, why would they give you x hundred thousands of dollars?
Create a positive financial track record for yourself first…ie pay off debt, start savings…this will then show to prospective lenders that you are showing financial prudence…
Good luck.
Ricksta,
Go the the Finance section and you will see a plethora of commentary, insults & verbal sparring over interest free…..
Each time someone asks a question or makes a comment about that topic…I hear re-runs from Faulty Towers…..don’t mention the war!!
Dazzling, at first glance, i thought you had a murderous tree hating tenant [biggrin]
My insurance policy with CGU actually covers the impact of a falling tree, with the cost of removing & disposing of the fallen tree or its parts. But the insurance doesn’t obviously cover damage if you cut the tree down or its branches or have someone else do it for you.
Your public liability insurance would come into play if it had injured anyone.
Irrespective of the draft plan, an investment in land (ie existing dwelling and large block) in SEQ IMO is a good one. You can do a search on either south-east QLd or Gold Coast on the forum and there is plenty of previous discussion on this.
Bearing in mind that this is a draft plan and the wheels of government do turn slowly, so before it becomes law (and what ever the final plan is) might take a while. However most reaction has benn fairly positive, so one could assume, that the market would take some degree of direction and confidence about the broad thrust of the plan. This certainity might provide a filip for land pricing in the area in the short term.
My understanding is though, land is being or has been bought by large development companies throughout the area, so the possibility of buying land only, that has not been subdivided would be difficult. Others may have better information on this.
SEQ, especially the corridor down, from Brisbane to Ipswich and then through the GC is not a large area in relation to the proposed population shifts that the area is expected to see over the next 20 years.
If you look at a shorter time frame, CG potential will be more influenced by today’s current economic climate and where we are in the property cycle, however, long-term (5+ years), this would be a great area to invest in.
(I am somewhat biased as I already have am IP on the GC)
Caveats are like a signal to a prospective purchaser, which has been lodged with the Registrar of Titles, indicating that someone else has an equitable interest in the property.
It prevents the Registrar of Titles from registering another interest against the title without first giving notice to the person who lodged the caveat.
The costs that I mentioned were for a caveat placed on an off the plan purchase in December 2003, so you may need to re-confirm their validity today. $59 title office fee & $38.50 solicitors fee)
The latest API magazine has a feature on three young investors and how/why they started… You might find some inspiration….
Rob,
Doesn’t answer your question directly, however most lenders would not allow a second mortgage on title. Another option would be to have an unregistered mortgage or caveat on title.
Caveats are approximately $100 for Vic (inclusive of Land Titles Office charge & your solicitors charge)
A article in today’s AFR (4/2/2005), titled Changing Coastal Landscape, referenced a BIS Shrapnel report that indicated that holiday-home ownership would grow steadily over the next 5 years, and that three-quarters of those would be located in coastal towns.
The greatest increase will be in NSW, at ~ 3500 additional owners per year, QLD at 3300, Vic 2700 & WA 1400.
Vtxdevo,
Cheap cars (no hire purchase)
Live or living at home
Savings & being frugal
Parents gifting deposit (this is pretty significant as saving for a deposit is probably the most difficult thing)These are things that first come to mind.
Chipper,
One swallow does not a summer make.
How much did they make in the last five years?
The same issue applies with property until the end of 2003. Most people with any property made money in those preceding years
Ziggy,
The usual way this is done, is that the trustee on behalf of the trust borrows money to purchase units in the trust, in which the trust then uses these funds to purchase the property.
The trustee is usually liable for the debt in case of default. This is quite common and should not be an issue, although some banks are easier than others to deal with…..
Easymoney,
If the IP is the only property which is being used for security, then you will not be able to avoid MI.
Cross-collateralising might be one way around this, however this solution is probably worse than paying a few thousand dollars in LMI.
There are quite a number of financiers who offer the capitalisation of MI into the loan.
