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What part of the North Coast are you in?
I'm in Sydney, eastern suburbs. Yesterday happened to drive past an open unit (a very ordinary one at that), at least 80 people milling around on the lawn waiting for the agent to arrive. This was a rental property, there are no rentals left and I have colleagues who are moving back in with Mum and Dad because they can't find anywhere to live. Purchase prices though are pretty much the same, however Is uspect they will go up as all people start banding together to buy a place so they have somewhere to live. A big problem here has been the inflated land tax, land tax on places can be more than the rental return so a lot of investors sell up because of that. It sort of evens out -inflated land tax and interest versus inflating rents.Dear Marc,
Don't buy in NSW! Exactly what I am doing now, no longer buying in NSW either. Only way to go.
And the friend that is trying to sell her unit lost a buyer because of the high land value of her unit, so that is what made her aware of the over-priced valuation. She could not understand why it was valued so much higher than what she was selling it for, so she chased it up and was really annoyed at how ridiculous it is. It does seem to be a problem for the north shore and the eastern suburbs, but give it time, they will start bleeding the inner west dry too, and you will realise how one day you are not affected and the next day, surprise, you are! Even if you are not paying it because it is your only property, you have trouble selling it because of the over inflated land tax attached to your property. Of course it is a deterrent to investors, as they realise they will go over the threshold, and a savvy investor should check the land tax value before buying.I di have several, and I bet you peachy's landlord has several IP's as well, I guess what I was just trying to point out is that land tax does not reflect the actual values anymore, and with it going up 30% each year it is something you never planned for in your investment strategy, I mean where are the articles in investment magazines dealing with it? They never mention it really. I have yet to see an article that addresses the risk of land tax with your portfolio. One year you are nowhere near the threshold, the next year you are way over it, and even though your properties have not gone up in value, you are forced to sell, and I guess now more people are selling, others can put the rents up as there are less properties to go round.
Definitely, not that I know the proprerty they are discussing, but just to give you an eaxmple, the semi we rent at the moment, a similar one sold for nearly a million dollars recently in our street. An old 3 bedroom home sold for 1.28 million in our street last year. This house is a rental, and is being rented for $550 per week. So if the 'real', i.e. market value of the property was 1.28 million, the land tax would be inflated (none of the land tax figures seem to reflect actual values, they are all higher) to well over 1.28 million. So it seems pretty average to me.
I have a friend with a 2 bedroom unit, her land tax value was well over the valuation she received from agents for a proposed sale. It is just the way things are done in Sydney, maybe we are still paying off the Olympics? Who knows…There are 12 in the complex I mentioned, which means that each owner gets slugged with 3 million divided by 12 as they are all the same size (under 50 metres, can't even get bank finance without dramas). It's just bizarre really. Just looked at today's paper and saw land tax again the headline story (see my next posting in same forum). My studio is on the north shore, but see from local paper it is now also big issue in eastern suburbs. It means property investors shy away, because there is no rhyme or reason to these land tax valuations, and it means you are better off to rent!
In regards to my earlier comment re unfair land tax, my unit was a studio apartment, and the land value was increased by 33% in one year. When I bought I considered the land value, and figured I would be under thethreshold for years to come, however it is impossible dealing with the greedy NSW state government and their totally unreasonable valluations. Every owner in the block protested, as our block of land was valued at close to 3 million for land tax, yet the block of land next door, same size, had sold for under 1 million in the same period. There is no way we could have sold our land for that value. Yet we paid the tax based on that. All I'm trying to say is with the land tax there seems to be no reason applied in the valuation process, and as such maybe even Peachy's landlord has been caught out as well. Something worth asking in that case is for a copy of the valuation. I have a friend renting in Manly in Sydney, she had a similar situation, her rent went up by $50 twice in a couple of months. The lanldord actually provided her with a copy of the land tax to show her that he was struggling himself, and the landtax had increased by some phenomenal amount in the space of a year, and it was obvious that it would be some strugge to come up with another $10,000 or so compared to the previous year. And he asked her if she was prepared to help with increased rent, and otherwise he would sell the property. they actually had a coffee together and discussed it, and she choose to stay on, and he will sell when she does move out.
Dear Peach,
i do understand your frustrations, are you in Sydney? I got hit with a big land tax bill, because the NSW government overvalues to raise revenue. So the value of the land that is part of the complex for my studio apartment is actually SUBSTANTIALLY GREATER than what I can sell the studio for, belivee it or not. I fought it all the way with the valuer's department, saying how about they buy it if that is land value only and they can get a unit with it for the same price. Now that it is a landlord's market out there and the landlord can raise the rent to try and recoup the cost (rather than say cancelling his annual holiday or car, which is what some of us were doing a few years ago) of course they will do that, and you will end up paying it, and if not you, then someone else. The unit will only ever be worth market value, so if this raises rent above that why not move to somewhere cheaper.I would have to agree with the previous postings. I also got the spiel about 'excellent tenants' from my current property manager for the last 18 months. Always it is 'we will raise the rent more next time, but meantime it's worth hanging onto these tenants, you don't want to lose them'. Now the situation has spun out to the point Iwhere am getting way below market value, am stuck with whining tenants who won't move out and resist rent increases (I keep suggesting to the agent how about they move out if they don't think market rent is worth it). I am actually suspecting that the tenants are friends/relatives of the agent, and have just handed the property to a new manager together with a hefty rent raise to bring the property back to market rent.
Just think of yourself, you have to cover each interest rate rise too, and it is a landlord's market out there now.Thanks Terry,
That's only a negligible amount, so not worth waiting until July for a property purchase then. Even though the rental market in Sydney is a mess (only one unit listed for lease in my suburb, and I hear in Canberra they are now auctioning rental properties!). But obviously the NSW government can't afford to drop stamp duty on investment properties and encourage investment.
CheersHi there,
Please see my post in the general property forum. Housing Dept are not supposed to advertise their sales, they get listed with local estate agents and auctioned, then when passsed in at auction they get listed for sale. If you trail through real estate.com, look at the auctions, any with boarded up windows, unkempt yards are usually Housing Dept sales. Ring the agent listing it and ask. You can pick the house, they are all very similar in design.Interesting to read all of the above. Would any of the experts like to suggest which areas of Sydney to watch? Are we talking about the eastern suburbs/north shore only or can we include the inner west, places like Ashfield/Summer Hill. What about the Sutherland Shire/St George area? Would appreciate any input on this.
Hi Del,
I notice you mention purchasing ex housing commission. Please read my post in general property about precautions you may want to make when doing this. Hope it helps you!Dear Matt,
Unfortunately as mentioned already there is a real issue with studio apartments and small one bedders and getting finance. This was supposed to change some years back, with the increase in housing costs and more smaller one bedders/studios being built however the banks have yet to change their requirements. I bought a less than 50 metre unit and had to come up with 20% deposit plus the purchase costs, go and talk to a lending person and see where you stand first before you go out and make any offers.Dear Scott,
NSW! NSW Dept of Housing. Have you had any dealings with SA Housing Trust?Dear Scott,
If you read my first posting again you will see that I did get my deposit back after 12 weeks of hassles, hiring a lawyer and going to the Minister for Housing himself. The reason I posted it was to warn others on this website, as you so rightly say the lack of cooperation is unbelievable with DOH. I was a reasonable person, happy to come to a fair settlement after the internal walls were smashed and graffitied, the carpets were urinated on and windows smashed. However cooperation was something sadly lacking so anyone out there considering the same, hire a top solicitor, get top insurance, before you go near DOH. And sadly, the cardboard in the walls story did originate froma similar scenario, were the repairs on a vandalised after auction property prior to settlement were done by a handyman appointed by the vendor. I spend 12 weeks telling DOH that internally smashed walls cannot and should not be repaired by a glazier , which is what they wanted to do,but they seemd to think I was being unreasonable by insiting on a licensed builder. I'm glad I got my deposit back and no longer have to deal with these incompetent clowns:)Daer Scott,
I also wanted the place repaired using a licensed builder. I didn't want to let the house go. DOH just weren't interested in doing ANY repairs, responding to any phone calls/letters/quotes, using a licensed builder, or coming to a reasonable agreement.
I have never experienced such a situation of total apathy and slackness. My lawyer (who is a top property lawyer, highly respected) made daily phone calls, wrote letters twice a week, and every time was told the person in charge is on stress leave; then the next person in charge would be on maternity leave; then the next person would have resigned! He sent through a letter saying court action will be taken to resolve this matter (after 12 weeks of not getting anywhere), it was also not responded to, and it was later 'found' on the floor of the desk of yet another person on leave. The incompetency in this section is beyond belief. I would have been very happy to settle with the repairs done by a licensed builder, and yes, using a licensed builder was in the contract, but when we challenged them on that it was also not responded to. They were well aware that all I was asking for was reasonable compensation or a licensed builder but it appeared impossible for DOH.
I have since heard of another person in a similar scenario, they pushed for DOH to do the repairs. Later on when house got a tenant the tenant leant against the wall and fell through, the walls were made of painted over cardboard. The tenant sued landlord. When I talked to the builders in the town they said that DOH repairs are not trustworthy and not reliable. So situation was extremely frustrating, I had to go to the Mimister himself to get a response. I would recommend stay well away from DOH NSW.Thank you! I did see the issue incidentally, but was hoping there might be people out there who are in that market, as first hand experience is always better than magazine stories.
Is there nobody out there with any ideas on Mount Gambier?
Also Rob meant to tell you get a friend to ring these agents 'pretending' to be a potential tenant and see how they come across, whether they are positive about your place or negative. And if possible get someone you trust to have a look at the inside, either a friend or go yourself. There might be a reason it's not listed or renting. For example internal damage they haven't told you about because they already gave the bond back to the last tenants who were their friends or something like that! It happens, so find out what's really being said and what condition the place is in.
I think if the agent still hasn't listed the place it's time to move on to another agent. Is the town big enough that you have another agent to choose from? One you haven't dealt with yet? If neither agent is listing it there has to be a reason, and they might have talked to each other about what has happened and it might be best to start again with a new one. I think the main thing is to do something and take control, because these people aren't doing anything to help you. With these managing agents you need to take control or the situation just goes on and on. I have changed managing agents several times in a few years, and 'giving them a chance' is something I have learned the hard way never to bother with again. Just look after yourself.
