Hi everyone. I recently discovered this forum, have found some excellent advice and am happy to know that there are many like minded people out there who don’t want to rely on the pension for retirement.
This is my first post on here and I was wanting some advice about what to do next in my grand plan of becoming financially independent. My aim is to retire early (don’t we all) before i’m 50 yo so i can indulge in my love of travel. [
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To give you some background information – in a nutshell, I am a single 32 yo unemployed guy who is asset rich but cash poor. []
I have 4 IP’s in Melbourne valued at just over $1m, all tenanted and returning $45k gross pa.
I owe almost $400k on a discounted 5.76% I.O. loan on these properties which are slightly positively geared and I am eligible for a $50k redraw.
I also have a 25% share in a unit on the Gold Coast valued at $170k (returning $11,700 pa) and a 25% share in an older block of 5 units also on the Gold Coast which was recently purchased for $770k (returning $43k pa). I have been approved a loan for $940k for the block of units and to refinance the other unit (which will give me free title). I will be using the block of units and my parents PPOR (valued at $775k) as security.
This property and loan is about to settle and is in 4 names, I.O. at 5.87% (7% discounted from the standard variable). The loan on these 2 properties is $940k and we also have been approved a LOC for $295k.
I want to move to the Gold Coast (from Melbourne) within the next 6 weeks and buy a PPOR ($160k max).
My questions are:
1) Should I sell a property down here to finance the purchase of my PPOR? I am ineligible for a loan because I am currently unemployed (the loan and LOC was approved because of the income of others on the loan).
However, i have been travelling overseas for the last 12 months and haven’t worked – so it may be a good time to realise any capital gains this financial year.
2) When i move to the Gold Coast i’d like to start buying old properties, renovating them and reselling them for a living. But because I cannot service a loan on my own (no job), maybe i should rent and use the proceeds of the property sold (about $170k) to start me off?
3) I also want to redevelop the block of units in the next 3-5 years and would like to hear from anyone who has experience with this, or would like to become a partner in it. I’m thinking of demolishing it and doing a boutique type development with some shops on ground level and 4-6 units on top. The land is 761 sq metres and 50 metres to the Broadwater.
Also is there anyone out there who would consider going into a partnership with me to do some small deveopments in South East QLD?PS: Can anyone recommend an independent consultant who can advise me on my plans?
Any advice would be greatly appreciated.
Thanks folks.~ better to die on your feet than to live on your knees ~
Hey Quentin.
Welcome to the forum. If you are looking to contact someone who maybe interested in partnering you in SE Qld, go to http://www.guerrillarealestate.com.au Stuart O’Neill lives up that way and he maybe someone who you can work with and build your portfolio even more. I saw him a couple of weeks ago and he is very excited about the movement of property in the SE Qld Area.
All the best.[
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MattHi,
Thanks for your post and welcome to the forum.
I’m a bit short of time… but here’s some quick ideas.
1) Should I sell a property down here to finance the purchase of my PPOR? I am ineligible for a loan because I am currently unemployed (the loan and LOC was approved because of the income of others on the loan). However, i have been travelling overseas for the last 12 months and haven’t worked – so it may be a good time to realise any capital gains this financial year.Be careful not to confuse a lifestyle decision with an investment decision. If you want to buy a home then great, but don’t view it as an investment.
You are right that now might be a good time to realise capital gains from a tax position, but remember you will also lose profits in terms of having to pay agent’s costs, loan payout fees etc.
Tax is only one of many considerations. Will selling bring you closer to or push you further away from your investing goals?
2) When i move to the Gold Coast i’d like to start buying old properties, renovating them and reselling them for a living. But because I cannot service a loan on my own (no job), maybe i should rent and use the proceeds of the property sold (about $170k) to start me off?Again… don’t cofuse investment and lifestyle. Which decision will bring you closer to your goals? For how much longer can you be satisfied with renting and delay gratification of home owning?
3) Is there anyone out there who would consider going into a partnership with me to do some small deveopments in South East QLD?Stuart is an excellent point of reference.
Cheers,
Steve McKnight
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Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
HI Matthew ,
Just a little note so say that new zoning regulations come into force in June so before you do anything to your flats ckeck as major changes are happening. P.s. there are lots of cowboys up in Q so be very careful
QUeensland is a great place to live[]Thank you all for your advice.
Matthew Kelly: I am in the process of getting in touch with Stuart O’Neill at his website to see what services he can offer me.Steve McKnight: Thanks for your insights – they are appreciated. I should probably explain that i am very reluctant to sell a property down here to finance my PPOR in QLD because of the costs involved as well as the fact that the property i intend to sell is a solid investment and will definitely show future growth. (Is it ok to mention the property address, description and auction date here?)
However as i mentioned, i am presently unemployed so will be unable to get a home loan. My only option i can see is to sell something in Melbourne to finance my PPOR in QLD.
You also make the point of not confusing a lifestyle decision with an investment decision. I’m going to try and have my cake and eat it too by purchasing my PPOR with the intention of adding value to it and reselling it after 12 months to avoid CGT. I understand that it is possible to do this with your PPOR and not be considered a property developer by the ATO as long as you hold it for at least 12 months.
That’s why i also may rent and use the proceedsfrom the property sale to start me off with my first renovation.Bianca: I was told that there will be new new zoning laws introduced on the Gold Coast in April which wll effectively make it easier for developers. Chevron Island (amongst other areas) will have height restrictions lifted. I was told by Council that the area my block of flats is in, will also be reviewed and i can go as high as 7-10 levels depending on the size of the footprint.
I’ve been pretty lucky with my property investments (nil vacancies, good tenants and good capital growth) but have also had some shocking losses in the sharemarket which i now avoid.
My property manager is also pretty slack and needs reminding about his job description at times.
I have been taking a slow approach to my investments unlike some stories where i hear of peple buying 5 IP’s in a year!
That sounds unbelievable to me. I bought my first at the age of 19 in 1990 as my PPOR and renovated it while i lived here. I then got the other 3 over the last 10 years while i rented elsewhere.
I probably could have accelerated this process but it wasn’t a priority for me at the time.
However, i’m now at the stage where i’d like to “crank” it up a notch and be more active. As mentioned, i’m also unemployed so i have a lot of spare time on my hands. I’m also pretty handy and have done most of my renovations.Anyway, if i can offer any advice about my experiences in Melbourne or the Gold Coast property market to anyone, i’d be happy to pass it on.
Adios mi amigos,
Quentin~ better to die on your feet than to live on your knees ~
Hi Quentin, I am also new to this forum and have found it very exciting to see such productive discussion taking place. Like you, I have been living overseas for the past few years and am moving back to the Gold Coast in June. I own one property on the Gold Coast (House) and am very interested in buying more properties. I also enjoy renovating places for resale. Maybe we could meet up some time and share ideas etc. Who knows what the possibilities are.
Anyway, good luck with the relocation. Drop me a reply if you are keen to talk more.
Cheers…..
Greg.[]Hi again, an update:
After much uhmming and ahhing (are they words?), i’ve signed up with an agent and will be auctioning the unit on March 29 at 11am on site at 15/12 Tivoli Rd, Sth Yarra. If anyone is interested in a well located, solid investment that will show excellent growth, come along and make a bid!
Am i allowed to put down the details here? I asked earlier but had no response, so here i go:
Invest or Occupy: in this top floor North facing 1 bedroom apartment which has been freshly painted and recently carpeted. Features a sun drenched leafy outlook, direct access to Rockley Gardens and the South Yarra library, built-in-robes, laundry facilities and is in a sought after location in leafy Tivoli Rd. Literally minutes away from Toorak Road and Chapel Street – enjoy the cafes, restaurants, bars and shopping in this blue-chip location.Sounds good ey?
It was a very hard decision for me to make because of the CGT and stamp duty that i’ll have to pay, but i figure that it’s the only way i can buy my own place to live in without taking out a loan (which i probably wouldn’t get without a job). As i mentioned, i haven’t worked for the last year so it may also be a good time to realise those capital gains even though i believe in the strategy that you should NEVER sell.
I like the idea of buying something that can have some value added, revalue it and then borrow again for the next IP.
I also hope to have my cake and eat it too by buying my residence on the Gold Coast, add value to it and sell it after 1 year to avoid CGT…i think that’s possible? So in effect, I’m back where i was in terms of property held though 1 will now be my PPOR with no/little debt.Hi Greg, thanks for the reply. You sound just like the person i’d like to have a chat with and it would great to hook up and see if there’s anything we can do together.
I hope to be back on the GC by mid April, so please get in touch if you’re interested.
Can we put e-mail addresses on this forum?~ better to die on your feet than to live on your knees ~
Hi Greg, my e-mail is [email protected]
Contact me if you’d like to talk about investing together.
Cheers,
Quentin~ better to die on your feet than to live on your knees ~
I’ve only recently decided that it’s time i put some roots down and get some direction happening in my life as i’m getting old now and need to think about the future [xx(]
I’d love to be able to retire at 45-50 and that’s why i’ve recently discovered these property investing forums to get some advice…so i can indulge in my love of travelling. I can live really cheaply and don’t need a fancy PPOR or all the fancy toys (but a Ducati would be nice). When i travel, i do it with a backpack, stay in dorms/hostels and eat street food.
I guess the main thing i want to know using “creative finance”, is how i can avoid selling the unit (i’d prefer to hold onto it and i can abort the auction), and also buy my PPOR with little/no debt on it. Of course i don’t want to pay interest on my PPOR which i cannot deduct.
I guess that would mean using my equity as extra security for the PPOR and take out a bigger loan – but… would i be able to get finance considering i don’t have a job at the moment?Also are there any thoughts on what’s the best way to retire on property investments – i.e through rental income or capital growth?
I’ve always thought that rental income would be the way to go, but that would mean having little debt and/or cashflow +ive properties, plus paying tax. I figure that to get to this point, i’ll need to do some renovations and sells to pay off some debt, or accumulate more properties that are cashflow +ive…but then again i have that tax thingy (PAYE?)
I guess using capital growth could be done be either selling a property when i need some cash and living off the proceeds (paying CGT…yuk [!]), or drawing on a LOC to live off.Not sure which is the best way to go here…any suggestions on what is the best way to do it? Has anyone come to any conclusions?
Muchas gracias,
Quentin
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!]), or drawing on a LOC to live off.The topic ‘New member needs advice’ is closed to new replies.
