Forum Replies Created
- ormeau wrote:yarpos wrote:why do you think nobody else does their research?
just because we dont have the same perspective or communicate in the same patronising ranting style does not mean we are ill informed
Why do you think I am a doomsdayer with a ones sided view of the world?
re read your last note……what perception would you think is created by the tone and the content…..maybe I have selective memory but when is the last time you said something +ve?
actually my response was to the dialogue the other two guys were having, your response sort of came from the clouds but I see you were engaged earlier. The doomsdayers comment reflects on a whole class of forumites who get on and do little but predict gloom and doom. Its up to you as to whether you feel you are in that group or not.
I guess I am just getting weary of the property collapse , peak oil, global warming story presented as some news or insight . I am not stupid (most people here are not stupid). We do have different views of the world however. I know that we have immense problems and I fear for my kids futures. I dont need that rubbed in my face again and again and again. I get it, I got it years ago, I want to so something about it. I have done almost everything i can in my small world of home and work (still some stuff to do but I reckon I am about 80% of what is available and what I can afford). The type of dialogue going on here is unproductive in my view. Having said that I will focus on the property content of the forum and people who want to create something or are just looking for help.
why do you think nobody else does their research?
just because we dont have the same perspective or communicate in the same patronising ranting style does not mean we are ill informed
ormeau wrote:Wow wee, I'm a doomsdayer extremist? Well what do you know? So you guys are the resident experts on energy then? Well now that makes me feel all warm and fuzzy inside.So we are going to replace 48% of agricultural fossil fueled based production cost with some market driven magic bullet then yeah?
We are going to bulldoze all the homes around the Sydney metro basin and replant the crops that fed Sydney over 60 years ago? And this is all going to happen overnight yeah?
I suggest you get your heads out of the sand and start researching guys,
So lets see, all the people interviewed in this special event Four Corners/Catalyst programs are all Doomsdayers? They must be because I am one of them. http://www.abc.net.au/4corners/special_eds/20060710/default_full.htm
http://www.abc.net.au/catalyst/stories/s1515141.htm
Oh, i thought I should throw this shallow argument in as well http://www.abc.net.au/science/crude/
The free markets will save us! Our government is so blind to the tsunami of economic destruction its makes me want to cry, I know the solution is there guys, the unfortunate reality is our leaders are doing jack in time to avoid an economic collapse that will be unprecedented in modern history.
But you already know that I bet.
yes we blokes can be very unimaginative at times (but we can lift heavy things and have other endearing qualities). The situation was the same for us with our PPOR. My wife picked it, I wasnt keen (just saw the work, and there has been a lot of it) but its worked out fine.
If the property is to be negatively geared you need to check out the impact of artificially cheap rent on your financials. The ATO mention this specifically in their advice to property investors (can be downloaded from the ATO website)
We are doing something similar with our daughter. We recently purchased the worst unit (it was horrible) in a nice well located block and have renovated and let it out for now until she exits uni.
Hope it goes well for you
agree with your reaction to the doomsdayers, they tend to look at one side of the equation (the problem) and never acknowledge developments on the other side. Peak oil will change everything, transport fuel is only part of the issues as petrochemicals are embedded in most of western style civilisation. However people arent sitting on their hands, and the market is driving the development of alternatives. Personally I happy have prices go high and stay high even though its painful throttle our usage and encourage R&D. We are in a priviledged position on Oz, with low prices by world standards and significant Natural Gas and LPG resources. Away from the media I have been noticing that people seem to be whining less and adjusting more…….doing the many small things you can do rather than sitting back waiting for a silver bullet…..or armageddon
hard to respond with so little information. Sounds like you have looked at the overall property market and are OK to buy in. If the situation is as you describe it you are probably more likely to succeed than fail. From the info available I see to two potential areas to consider. Firstly you need to have a feel for reno costs to get the property to rentable state so you know if purchase+costs+holding costs+ reno = good investment or over capitalised property. The overshadowing thing may reduce the rental/resale buyer pool, but if they are only houses and not multistory units its probably not significant.
Our PPOR fits this category and after 20 years is only now getting out of the renovators delight category. Its worked out OK for us with current value at 5.5 times purchase price. Which is OK for the burbs. Your situation is different as you need to execute a significant reno quickly (cash up front and interest clock ticking) so you need to be sure you are ready for that effort and expense. Thats not meant to be -ve, in the right situation it could be very rewarding……but I dont know the deal or your personal situation.
good luck with your project
tch wrote:yarpos,
You mean landlord insurance? Not compulsory but I'll have to look into it with such a decent rental return, and in that case, I'm sure they'll check these points. Have to verify even if they've got a bond down.yes I meant landloard insurance. The overall policy can cover structure and contents, not just rental coverage. Dont be so sure they will check these points, mine didnt and I only twigged that it could be an issue do to a passing comment on a thread here. The company doesnt care much about your risk they just want their premiums and to minimise their risk. I was fortunate that the managing agent had stuctured it in a compliant way…..for that company: one lease, 6 month minimum, all to sign.
whispermoondancer wrote:hello all.
i am reading steve's book at present, and have been looking for a property using the 11 second solution.
the average rentals in kingaroy qld, for a three bedroom timber house are $195 – $ 250 per week. Current asking prices for these houses start at $230,000. and go as high as you could pay.
using the above formula, the rent will never cover the payments on the loan. Am I never to break into the investment market with the prices as they are??????????????what on gods earth has that got to do with Bens question? instead of being totally random just start your own thread, it will help you get some visibility and maybe some responses
check insurance cover if you are having it. some companies have issues with number of tenants, and/or number of leases, and/or minimum length of leases
tch wrote:I've checked out a 3 bedroom house recently with a shabby but separate 4 bedroom student accomodation unit at the back (which ressembled that house the community built for the Simpsons in one episode with mistakes everywhere!). I have a few reservations. If I factor in the P&I repayments/rates/stamp duty etc with the current rent (note the owner is collecting the rent on a monthly basis) and what I'm going to offer (which is close to what they'll accept) it turns out to be a pretty good return. My question is, are there legal limitation to the number of people who can live in a house? I would’ve thought so (when I think of commercial property with fire restrictions), but I’m wondering what the laws are?
not so much a legal limitation but a risk you might want to check. If you plan on having insurance , check the T&C's of the policy as some companies have constraints on numbers of tenants and/or numbers of leases and/or duration of leases
There are a bunch of international students (all men btw) in both places and they've pretty dirty but at least the rooms didn’t look trashed (I didn’t even get to look at all the bedrooms for privacy reasons). I don't think I'd necessarily have to fix anything. Hell, they're living in it as is! The thing is, the land alone would be worth 150k less than what I'd offer so the buildings are pretty cheap, no matter what condition they’re in when I factor in the land value.
There’s nothing stopping the renters from leaving and I doubt I’d get anywhere near that much rent if there weren’t so many people crammed into the two places. What other caveats should I be looking out for? If I put in an offer, it will be subject to building and termite inspections of course.
Scamp wrote:Would this have anything to do with the marvellous plan to upgrade the road infrastructure.
Let me remind you :
– people living in brisbane will pay for it ( 9% is just the start )
– massive traffic jams for at least 5 years to come after building works start.Brisbane is not the place to be right now.
yep , all you folks in Brissy better retreat to your bunkers with your gold bullion and left over Y2K supplies…..this could be the end of life as you know it …… and its just the start!
Scamp wrote:Maxxi wrote:if you understand mortgages well then you will know that the Serviceability ratios for purchasing/lending are between 4-6 to 1 depending on O/O or Investment Property.
Therefore, it's not the $50K income earners that are driving the market. And …. all of those that cant get into the market are long term renters/tenants….KatherineM,
The South Australian market is doing very well at the moment. Last year it increased by 23% and it sutuated as one of the best capital cities for growth in Australia. The March results were already reported at 4.5% which is setting it up for double figures for the year. This growth is due to four things …. 1/ The relatively well priced housing in SA …2/ The increase in rental values…
3/ The Defense Contracts that are flurishing in Adelaide eg Submarine base construction contract…. 4/ The Mining Boom in Northern SA.– The right mortgage ratio should be 3 times income. 4 times is pushing it. 6 times is plain idioticly high.
– Those that can't get into the market are people who borrow up to 10 times their wages, and even buy PI's.
You're right to say they "should not be allowed in the market" .. but sad truth is they get themselves into more debt than they can afford. At the moment, we're at the point that even 2 incomes can't keep up with the house prices. That's assuming you're a dink, and don't have kids. If you have kids, you're already outpriced now, no matter if you have 1 or 2 incomes in the household. Only dinks can afford houses now, but they have locked themselves into 10% mortgages for the next 20 years.
– Who cares about last year increase of 23% ? That figure by itself should be a BIG warning to stay out of the market. Never buy in a topped off market.
– The march results don't say anything. It's median houseprices. In the end of a housing boom , the houseprices go down but medians go up, I have already explained why ( less cheap houses sell, thus the 'median' will go up, but only because less houses are sold )1/ The relatively well priced housing in SA …
It's not well-prices. Well priced compared to what ? Compared to Sydney CBD ? Relatively well-priced SHOULD be 100.000 median houseprice, they're unproportionally higher. Those who lived in Adelaide 20 years ago will remember the 10% unemployment, and houses worth squat.
2/ The increase in rental values…
Rental values are about to drop , because a massive amount of non-sold houses will flood the market , driving rental prices down.
3/ The Defense Contracts that are flurishing in Adelaide
Economy is slowing, this means defense contracts will end soon or be cancelled.
4/ The Mining Boom in Northern SA.
In what way does a mining boom affect a city 400 km away from the mining area ? And besides, China's economy is in a BIG recession and also plunged 8% in 1 day. What happens to Australia's mining boom when China goes into a fatal recession ?Conclusion : Don't buy any housing now, ESPECIALLY not in Adelaide.
the whole Chinese economy plunged 8% in one day? how did you measure that Scamp? you really have your finger on the global pulse! what a guy
the mining actvity 400km from Adelaide will have a similar impact on Adelaide as the mining activity 100's or 1000's of kilometers from Perth has had. Its cyclical sure, but cant be dismissed just cause it doesnt fit your template
Scamp wrote:Jon Chown wrote:Scamp says.
These are interesting times, especially when you think a lot of property investors have 20 (!!) properties or more, all NEGATIVELY geared of barely above 0According to the ABS of the approx 2million Investment properties in Australia, 90% are owned by people who have only one investment property and less than 1% of investors own in excess of 10 properties.
20.000 people with more than 10 properties. That's quite a lot if you ask me, especially if they get into financial trouble. And remember : 1000 houses collectively selling for 50% of the houseprices can bring down your houseprice to 50% also. All you need for the market to crash is a lack of buyers. Well.. if you look at todays market, there's not a lot of buyers out there. No more free equity due to the new ABS figures means that the freebooter investors are out of the game. That's 30% of the market. Then there's the pensionists who are in deep trouble also , that's another 10%. There's the average families with credit cards with deep financial trouble and extremely high oil prices, that's another 30%. Then there's the FHB's who can't get a 105% loan anymore from banks, that's the last 30%.
Where, if you would be so kind to tell us, will you get buyers from ?
No buyers = no sales = lower houseprices = still no sales = 30% houseprice crash = still no sales = 60% houseprice crash = yes.. the FHB's can buy again.Sydney houseprices have already dropped 35%, please give any good reason why other cities won't follow ?
( brisbane is down 20% btw.. I see you're in brisbane, you should know this ? )where do you get 20,000 people with more than 10 properties? the 1% was 1% of investors not 1% of 2M properties
weve told you a million times, stop exagerating…….at least for 35% of the time unless your a pensionist with credit cards
well I read it and I dont think my life has changed as a result. What were you reading into this to generate the excited subject line?
blogs wrote:ormeau wrote:Its okay, we are all saved! Kevin Rudd has asked OPEC to increase oil production (guess he thinks he has a better relationship than GW) and he is going to change the government car fleet to hybrids! Yeh Yeh 3 cheers for Kev
lol the guy is a complete joke!! If he was really concerned about reducing fossil fuel use for starters he wouldnt be jet setting around the world burning thousands of tons of jet fuel when he could do tele conferences with video just as effectively from Canberra. I wonder how much grenhouse gases were expelled from all the people who traveled to his big chin wag session….wonder if he knows what a hypocrite is?
I see a trend emerging….I try to read widely…..and the words hypocrite and Rudd keep appearing together relatively frequently …. he seems to be having a shorter than usual honeymoon period …. I fell a little guilty saying this as I am in a working family
Scamp wrote:gmh454 :Thanks for the update. It's nothing new to me, it's something that comes and goes. The last auction results are in , and there's a clearance rate of 11%. We're in a very special market nowadays :
We're in a buyer market, and there's no buyers.gmh, can you elaborate on what will happen to someone who is in the kind of trouble you stated ?
Will they strike a deal with the creditors , will they be blacklisted anywhere, will they be exempt from taxes ?where are auction clearance rates 11%?
there really are so many variables it hard to way a specific place may be slow to let……..property quality, location, rent levels , tenant quality
not in your city but we have had no gap in rental for one outer burb property (re let without a gap 6 months ago) and we had people visiting on the last day of a reno (Melb inner north) and it let the next day. Our experience has been in line with what media and industry commentators are saying……..which surprised me as I am pretty cynical and was thinking this topic was getting beaten up quite a bit.
basically the bank is willing to lend you another 150k secured against the value of the house (equity is not based on what you were offered but what the bank values it at , usually more a conservative value and especially these days)
So say you want to but another place for 300k. If the bank agrees with that value they would normally lend up to 80% with no issues depending on your ability to repay (including rental income). That would mean they would provide 240k based on the target property. You would then fund the other 60k + costs from your own cash or from your 150k equity if you wanted the whole deal financed. This approach can open up a pandoras box of issues (cross collateralisation) if you link too many properties which can make life complex when you want to sell a piece of the chain, but that is another topic.
is this in any way helping with your question or am I just babbling?…..again
congratulations on your purchase, we bought in Franston a couple of years ago and so far its been a good story.
for a quantity surveyor to due the inspection and provide a deprec schedule $500 is about the going rate. Remember you can claim this as an expense come tax time. We used CMR Associates 1300 131 658 who provided a professional no fuss service at that time.
soloinvestor wrote:any transaction that shows no real business purpose other than manipulating tax will draw ATO attention
on the other hand you have to draw the short straw and get audited……..just choose you own comfort level re risk/reward
How is this transaction manipulating anything? They are not doing it to manipulate tax, they are merely taking advantage of an offer from their employer. This is nothing to do with a tax strategy, they are simply looking at a way to take advantage of their employer's offer to pay their rent as far as I can see. ??
I am entitled to lease my house out to anyone – even my employer if I so choose, and if they allow me to live in it then how is that relevant? This is no different to placing the house on the rental market and renting it out and living in another house while their employer pays their rent. Except in this instance it's even more logical due to the rental shortages in their area. ATO can investigate all they want and what can they do….they are doing nothing wrong.as I said we all choose our own comfort levels…..probably just me being too conservative about a convoluted arrangement to live in my own house……I think tax is a factor depending on how the company treats that expense……..in any case I think they need the advice of a trusted accountant rather than an anonymous forum……. none of us will be around to support them if and when the questions start
