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About Mandurah,
I went for a drive to Port Bouvard last Saturday. Nice suburb. My friend than saw a house on the canal with a big for sale sign. Land 700+sqm and the house only a couple years old. He then called the agent and asked about the price, asking 1.1 m. Then asked if the house will be open for inspection to public. The agent said it’s tenanted so won’t be opened to public. My friend than ask him about the rent. …………It’s 270/week[ohno][ohno]. The agent said it’s too low the tenants should have paid 350/week.
We were shocked at the yield. 1 minute drive from the canal we saw an ocean front 550sqm block asking for $950k.
I wonder how much rent they get with $700K house on it.Quinny, thank for the info!!! Nice to hear from someone that used to live there not long ago.
Definitely CF- (big time). Craige has gone up a lot and now it’s not much cheaper than Padbury. I was told by people that leave in Hillary and Ocean Reef to go for Padbury, they recond it’s a better suburb for little difference in price.
I saw 2 properties last weekend in Padbury, one nice but 295K and the other $259K but run down and on a steep slope.I now someone that live in South Lake, right behind the house is a power station. You can here the humming noise. Behind their back fence is a good 10 feet drop, the power station is lower than their house and it’s a big station/grids.
Marisa, when I hear that land value went up by more than 25% in one month it makes me nervous. Is the developer silly not knowing how much the land worth? 25% in one month!!!!
I like to be in your posistion and sell the land after one month. To me that is incredibly growth. Even during dotcom boom that was a good return.
Marisa, if you still can get that kind of return do it while it last. Might not happen again for a loooonnng time.Marisa,
No, you didn’t offend me. And I hope I didn’t bore you my questions.
I haven’t bought anything because I can’t find a good buy possibly because I can’t see an opportunity.
As much as I like to get into IP I still can’t find one with what I think has a reasonable yield.
Put it simply most are dismal.
I can buy any major bank shares with 5% yield fully franked but I have enough shares and like to balance my investment with IP.
Honestly, I don’t know if I should take my time now looking for an IP. But either way my next investment will be in property.
I will contact Hegney Valuation Group. Are they into valuation only or also into development too? I like to know this. Don’t want to buy a share that your broker tell you to buy because he wants to sell his. Seen to many sharks in sharemarket hopefully not as bad in property market.Even if the prediction is materialised it wouldn’t necessarily going to be good for places like WA. Lower commodity price means lower job rate, we are so dependend on mining industries over here.
I just like to add another thing about the property chart on the previous page.
It’s a personal experience I am sure similar to many around the time.
I bought my first house in Perth in 1989, interest rate was 15% than it went up to 17%. We cheered when it went down to 12-13%. I paid $110K and sold in 1995 for $143K. That’s before added things like swimming pool fixes etc. That was tough financially. The house was the oldest and simplest on the street. Some nice houses in the same suburb went down in value between 1989 to 1992/1993. For some people it was better to rent and purchase that time.
Having to say that, some suburbs were performing okay.
Interesting to see from here because some people are bullish based on what happened in the last 4-5 years (still in WA).
We know we can’t drive by looking at the rear view mirror.
I am neutral about property market. Used to be bearist but was too bearish for my own good. I think my experience in the early 90’s affected my judgment.Thanks Marisa for your thought. I have to say it wasn’t obvious to me. I am planning to purchase an IP within a couple of months.
My budget is $250K like to to get rental at least $190/week.
Anybody else like to comment please do so, I am interested to hear from you.Now between Mandurah and Perth (not other cities) according to the projections by ABS?? Mandurah will have the biggest growth in WA in the next number of years. Is this mean it will be wiser to invest in Mandurah than say Padbury for 250K property? Am I missing anything here? I am looking for 8-10 years investment. ie I don’t have IP and I quess better be late than never. At the moment I am paying the highest tax bracket.
Low rent aside, where do you think the best change for capital growth 5-10 years from now for property around 250K in Mandurah?
Anybody has an IP or ever lived in Padbury? What do you think of the propect there? Went for a drive on the weekend and saw few properties there. Prices are around $240 – 280K. But rent only around 190-200.week. Close to the beach and Hillary.
Cata, can you explain how you can include your family home in a trust without incuring stamp duty etc but still excempted from CGT? If the home is still under your name than it’s not own by the trust. To be protected it has to be under a trust name? Please explain, I am very interested to know how this works.
This is the area to confuses me, where you can put an asset in a trust name but still get negative gearing benefits. I just got off the phone with my accountant, she said I can’t put say an IP under a trust and still get a negative gearing benefits. If you lend a money to the trust, the trust need to pay you back the interest to you. That means you are not loosing money on your borrowing since interest payment from the loan = interest that the trust pay to you. And the trust can claim that as an investment cost but it has no other income except rental to offest it to.
That is the kind of IP I like to get, the one that cost nothing to keep. I didn’t know it still exists today. A property that I am looking at cost 260K and I get 200/week max. I like the Steve McKnight high cash flow principle to accumulate IPs if you still can get it, it sounds logical.
Thank you everyone for the helpfull information.
6.8% is a good rate.
The last 5 years the growth has been 12.5%/year. I don’t know the stats for 10 years.
The yield is around 2.8-3% assuming I have no problem getting a tenant and it’s rented the whole year.
Mortgage Adviser, do financial institutions have problem with lending money to an individual to by IP under a discretionary trust? I don’t have a trust but it sounds like a good idea.Sorry I forgot to mention that I will pay the stamp duty, establishment fee (lawyer fee) and other settlement costs from my savings.
The miscellaneous costs include PM fee, rates, land tax if applicable, minor fixes, insurance etc. If $3,000 is not enough how much should I put aside for these?Mortgage Adviser, what is considered as a good interest rate this day?
The gross yield is 4%. That’s before the miscellaneous expenses. If the misc exp is $3,000 that bring the yield down to 2.84%.
That’s pretty low isn’t it?Terry, with HDT I will need to distribute unit trusts to beneficiaries. Do I need to specify how much units each beneficiaries will get. Will the income (rents/dividends) have to be distributed at the specified proportion each year? If this is so than it’s no way as flexible as discretionary trust but has the benefit of being able to get borrowing deduction (buying special unit).
If an IP is purchase by a trustee under his name not trust name what stops the trustee from selling the IP outside the trust?
Okay so I can’t claim interest deductions myself for an IP in a standard discretionary trust.
With HDT the non special unit ie income still can be distributed at the discretion of the trustee and the special unit(s) can be sold/transfer to my wife if we need to in the future for example when she gets more tax deduction than myself. Is this correct?
I still like to know if we can use the equity in HDT to purchase other properties. Will financial institution have a problem with this?
Can anyone tell me if this is how it works:
1.I buy a special units in HDT that in turn buy a property from the money.
2.The income from the rent can be ditributed to any beneficiaries at the discretion of the trustee while I can claim the interest deduction.
3.Further down the line I can buy another property and I can use the equity of the first property in the HDT.
4. And when we sell a property the capital gain can be disributed to a beneficiary at the discretion of the trustee like income distribution.
5. My wife and myself can keep buying special units that never earn income or capital gain.I have a question about a non hybrid discretionary trust where unlike HDT I can’t buy a special income units. Can I still claim interest cost and how do I go about it?
Also can I use an equity in a trust name to purchase another property like if it were under my name?
I am reading a family trust book by N E Renton but still not clear with the mechanic of it.
Your answer is much appreciated.
