Forum Replies Created
- Scamp wrote:Yarpos : Yes ofcourse. Where do you think the expression "USA sneezes and Australia catches a cold" comes from ?
Just look at the events of what happened in USA. Then extrapolate to Australia. 18 months difference, everything else is the same.About the rental crisis : There is no rental crisis. People who say that are blind.
Soon it will all become clear to everyone, when rents will be dropping.
Until then, it's good news for the bears, since rising rents are a form of inflation, and we all know what happens is inflation rises, right ? ( think RBA ) On top of that, government will take measures to drop the rental prices, where there is no rental crisis in the first place, this will contribute to the problem even more.People using the rental price increase excuse really are blind to the obvious.
why yes I think I used to hear that phrase in the 80's, I thought the world had changed a bit since then. The EU and the rise of China and India and eventually Latin America have changed the game somewhat. The US still has a big impact but trotting out old mantras doesnt really mean much. I was interested to know if there had been a housing crash that we had followed in 18 months.
"Remember, Australia lags behind UK and USA about 18 months. There's trouble ahead when banks stop lending money to potential buyers."
have there been previous crashes that Australia has followed in about 18 months?
you appear to be saying stay out of residential property unless you get commercial type returns , say 8% +. Is that a fair summary?
"Will live in the investment property and rent out the current home for $380-400 p/week."
If you are living in it , its not usually classed as an investment property (are you planning to rent out parts of it?). Will probably come out when you clarify the points the other posters have asked for
devo76 wrote:My sister is living in the uk (Edinborough). She bought a loft apartment a few years ago and now she wants to come home and wants to sell.And yes she may lose some money but no 70%. What crap. Im sure there are many places thet may expieriance drops close to that but if you were to look at the details im sure the majority of people will spot were they went wrong. bad location,overpriced etc etc. If you buy well you will be ok over the long term. Infact my sister told me of some examples of prices still moving up due to the owner purchasing well.In any market there will be someone who overpaid and someone who got a bargain. These should not be used as averages.Thanks for offering something first hand……the forces of darkness here often throw out these statements or present them as factoids. Not to many bear up to objective scrutiny and strangely if you offer a sourced alternate point of view it goes quiet. Somebody may have lost 70% on a deal in Lower Barkingwhistle on Avon and that will get extrapolated to "the UK". Same in Oz , people are bleeding in western Sydney and making money elsewhere. Dont take it too seriously……
because they all have different internal policies and risk management approaches I guess.
I am just guessing but I expect there is no set period for a valuations validity. It would just depend on how dynamic the market has been (or percieved to have been) between the valuation date and the time a review is needed.
just thing about this and I have never, in my whole life (and I am an old guy) had to get a formal valuation done…..weird
does that approach cause many to leave or is it normally accepted?
seems hefty but keep in mind that you have had the same rent for 12 months, and if you sign up you will have that rent for another 12 months. What the landlord sees is 24 months with one chance to review rent. You need to average the rent increase over 24 months and look around at the market to see if thats reasonable.
There are costs on the landlord side to re-letting also , due to agent costs and despite demand there can still be rental gaps. So you have some leverage , so make an offer
If you are trying to get the full picture (property+renovations) then you probably need a quantity surveyor the estimate the original cost and age of the base property and include current reno (assume real cost of that was tracked).
If you are just talking about your reno costs then you could do it yourself in Excel but would need to get the ATO doc to correctly categorise aspects of the reno for you capital works deduction……or just add it to the price of property to reduce CGT down the track when you sell (dont know how much we are talking about)
part of this depends on the situation, are you renovating prior to first rental? in between leases?
ATO has some downloadable PDF files which discuss this and provide tables to guide you on what categories of items are depreciated or claimed over what period
quote from ATO site
"
There are two categories of rental property expenses you can claim:
- expenses for which you can claim an immediate deduction in the income year you paid them, like council rates, repairs, insurance and loan interest, and
- expenses that are deductible over a number of years like borrowing costs, creating structural improvements and costs of depreciating assets.
You can’t claim costs associated with acquiring or disposing of a property, but they may form part of the cost base of the property for capital gains tax purposes.
Renovation costs and costs to repair damage, defects or deterioration upon purchasing a property cannot be claimed as an immediate deduction. These costs are capital expenditure and generally must be claimed as either decline in value deductions over the asset’s effective life, or as capital works deductions over 25 or 40 years.'
wezwaz wrote:I'm sick of hearing with the increasing population and housing shortage, it means property prices will rise.OK, let's say interest rates rise to 15% and oil goes to $200, so that existing properties become completely unaffordable. That's right, we get to a point where lots of people simply cannot stretch their budget any further. You tell me how properties can continue to rise under this scenario.
Who says this? if they are saying that and assuming everything else stays constant then its probably true……academic supply and demand stuff but true. You would think that population growth will sustain demand for houses and that it may inflate rentals. Added to this housing stocks in desirable locations (in some places in any location) are low. Increasing population is a reality and is impacting some cities more than others. This must add to the demand side of the equation.
You can "OK lets say (insert bad thing here)" and people dont have enough money to spend on housing then yes prices may flatten or go down. Who knows really, if the market is (roughly) 1/3 owners , 1/3 buyers and 1/3 renters I would expect us to trend towards more renters and the landlord class to expand , like parts of Europe. If the landlords and owners can still afford to do business with each other prices may not retreat.
I dont think I would buy in Frankston again (unless we stumble on a great deal) as we already have a place there and as I said I think it will quiet down again now. I am happy to hold the place we have there. If you use the search in these forums you will find plenty of debate on the Melbourne east vs west topic, not all rational and usually just about entrenched positions and biases. Parts of Melbournes west are industrial, parts very livable places…..same for east. Melbourne is now about 70kms across , its dumb to generalise. A lot of people judeg based on what they can see from a freeway.
Your objectives to me say inner location. You can still get a reasonable apartment within 10k of the CBD with good transport access afor 300k. I think that is pretty good in a city this size and I doubt it will last too much longer
Re waiting: Timing as always an issue. Ask your self what would you need to see in a few months to feel comfortable. Would you actually do something then or will you just wait another few months etc etc. There are many reasons to do nothing e.g the market had gone down so I will wait to see if it goes lower, the market has gone up so now I cant buy where I wanted to or am I buying at a peak?
I think there is value to be had here , but finding it from Perth would be difficult unless you are over often or perhaps engage a buyers agent. Others here may have ideas to help a search if you decide to go ahead.
mrkueh80 wrote:I never been to frankston, one of my friend told me that frankston is not really a good area and bit doggy..is that true???
I notice near they sky road…litter bit up north -east of frankston CBD..the house is about 300k and able to get about 4x 2 double story house..which is very cheap compare to close to CBD.
I actually located in Perth, but i still Like melbourne..my plan is to move to meloburne within few years…i already predicted melbourne property will go up becuase there is no way PERTH property is more expensive than Melbourne…. but I have no enough money to invest for the past two years..and now i believe the market is stablalise and high interest rate will not make any money from property market for at least a year..i believe…
any other area good to invest..? actually my investment capital is about 300k and hopefully can get at least 5% returns…
Matter of opinion re what Frankston is. Its a bit like people who devalue Melbournes west, often without having lived or worked there…… I heard, someone said, my brother in laws 2nd cousin reckons type stuff.
Yes a property where you talk about will be cheaper than the CBD 40ish kilometeres away, thats pretty normal in any city. It is a pretty risky line of thinking linking rates in one city to another. Perth is in the middle of a mining boom that may go on for decades or may end next year. Personally I dont want Melbourne to go they way Sydney and Perth have gone as we will have as many people in the shit as they have. If progress is steady and we lag those places that will be fine (and in todays world not going backwards would be equally fine).
There are many good areas to invest in Melbourne, but what are your objectives? just to get into this market or something you want to move to later or ……………….? From a personal perspective if I had another 300k to invest in Melbourne I would buy a 2BR apartment in the inner north < 10k from the CBD. We have one there now and I am selling up a place further out (not Frankston as I think it still has growth potential) to invest further. Areas of the inner west are re-cycling now also and have reasonable prices and city proximity.
Frankston has been a good area for us ….but….I think it may had its burst of growth now and settle back into something like the outer burbs norm. We have been there for a couple of years now and have enjoyed good rental growth and theoretical capital growth (I only beleive that when the contracts are exchanged and the money is in the bank). Although it is outer burbs I think there is value there due to being well connected transport wise and under valued water proximity wise.
From an interstate perspective (we orginally came from Sydney half a lifetime ago) it is massively underpriced given proximity to Bay, freeway and rail. Frankston had a bit of a bogan/moccasin wearer reputation, which to some extent was true but I think is slowly waning. South Frankston/Olivers hill is the 'better" area, although that doesnt necessarily equate to better capital growth or better tenants.
only thing that stand out to me is the allowance for tiles, they are actually relatively cheap unless you are going for something exotic. $1000 for carpet (laid) in a 2br apartment sounds low but dont know how much you are re-doing or if you have trade connections. The rest seems reasonable for a budget to me. If you tell people where you are they may be able to suggest "cheaper than Bunnings" sources for some of this. Good luck with the reno. One thing people tend to under-estimate is the time to do the project, its usually longer than you think, which costs you in interest charges (something to consider in utilising tradies) i.e. pay them or pay the bank
sorry if i come across sounding harsh, but….look at the information you have provided. How do you expect anyone to offer anything constructive? real $ available, value of current apartment, fully owned or mortgage, how much do you want to spend, how risk averse are you, what are you actaully trying to achieve, have you actually done any research and ruled anything out yet etc
well said Michael. We need to adapt to survive. Maybe you should change your icon to Morpheus?
re the XU1? a lot of capital growth I reckon…..the prices of iconic cars of that era have been through the roof for a few years now (another bubble?) things like A9Xs and GTHOs have been pulling $50k and way beyond. I love em but dont see that value….a bit like Grange Hermitage.
A quantity surveyor estimates the construction cost of your property and prepares a schedule (which is acceptable evidence to the ATO) to substantiate a depreciation claim which is a percentage of the overall property over a 40 year life, not just fixtures and fittings. If the place is new and you have the construction costs then this is a simple exercise. If the place is old (maybe your case??) then you can claim for capital improvements which may be what you guy is doing.
Basically if the property is relatively young you are missing out on a worthile deduction. If its early 80's and older the its either out of range or a number so small it not worth chasing (my opinion only….some people like to chase even small returns….we had a guy on here once stressing about how his rent got rounded off when working out monthly from weekly and the disaster of leap years)
wealth4life
must be nice to communicate with high positoned executives…I'm impressed
I cant argue with the motherhood statement of getting good advice, it applies regardless of the times
the other points are just a list of topics and without anything tying them together. I can present a counter position and say so what? for example:
Banks and valuers are forever doing what you are saying…its their job
Harvey Normans share price….every stock has a story behind it, your point is what……Oil Search is up 60% this year a great story for their investors and PNG.
Not sure what credit debt is but I cant find a reputable reference that puts Australia on top of a debt ranking table. It may be the case but I just cant find it. Can you provide a source please?
Personal bankruptcies where, and off what base? 8.6% is just a number and may be in line with changes that occur every year. May also be just activity related as in boom times people create more businesses and a lot of them fail in any case. These are also rear view mirror indicators, bankruptcies usually get recorded after a long period of trouble and are more indicative of something 6-12 months ago than today.
What are you talking about in regard to taxpayers subsidising banks reducing interest rates ? I dont understand the scenario you are proposing, sorry if I am being dumb.
Jon- I loved your comment about the 70's. Back then one of my bone headed mates sold a 6 months old , pristine , Torana XU1 because he beleived we would be out of oil in a couple of years. Maybe he was just ahead of his time. I trust that boffin does his or her stuff soon as the current and imminent mire seems more serious than back in those days.
if I was doing it I would claim what was actually required to inspect the property …its really a day trip….. airport taxi (or mileage and one day parking) airfare and one day car rental (one airfare if the property is in one name, both if its in both). Just my opinion based on my own comfort level with explaining how I arrived at the expense claim to an ATO auditor. I am sure others would be more creative.
