We are focussing on units in Towoomba at the moment because we can acquire a 3 BR unit for around $140,000 and get rent of around $165 – 180p/w. Any reason not to choose a unit as opposed to a house?
Also we have a borrowing capacity of just under a mill so the bank told me last week. We have $1,700 month to play with. we also currently have $14,000 saved and use the $1,300 p/m which will increase to $1,700 in a couple of weeks to save this. After the settlement of my dad’s estate I will have approx $200,000 cash Someone tell me the best road to take. Love the idea of pos geared propos but also self managed super funds including shares and prop got a clue anyone?
Will appreciate your input
Kim[biggrin]You need to get a plan. This is vital. Without a plan you are going into investing blind. Right now you are focusing on investment vehicles (property vs. shares, units vs. houses), but they don’t matter that much. It’s your plan that matters, because it will determine what vehicle you take.
Those units are all negativly geared, and my guess is that you would have to add an additional $100 a week (from your own pay packet) to the mortgage. Does your plan inc. negativly geared property?
Right now place your savings in a high bearing bank account (ING, citibank) and figure out a plan. And then start reasearching. And then follow your plan. You need to do alot more reasearch.
Also have you looked at the tax implications of setting up a DIY super fund, and how much do you know about share investing? Are you a trader? Do you know how to reduce you risk through options? Do you know you cannot borrow money through a DIY super fund to buy property?
This is why a plan is important. With that we can help you, without we can’t.
Rgds.
Lucifer_aukimcath,
The unit at toowoomba seems a pretty decent price and the rental yield isn’t too bad (from MY perspective) [snitch] 3-bedroom units will always have more of a tendency to growth than lesser sized units. And toowoomba is a big growth area right now. Sounds like a sensible deal
With regards to units I’m sure you’re aware that some people prefer to buy houses, because of the land value, whereas you just don’t get the intrinsic land value with the shared land distribution of units. Many people think that itis in fact the land which appreciates in value more so than the building, and this is probably historically true (hence people paying 700k for a house and land in sydney and then knocking down the house- because it was the land they wanted, not the building on the land).
One of the benefits in buying a unit, is that if something goes wrong with the roof, or the pipes, or some other structural area, the body corporate pays. Of course, you pay body corporate fees (tax deductible), but I remember when me and my friends first bought properties, she bought a house and I bought a unit, and then she had to pay 10k to get a new roof- that was ten years ago, and I would never have been in a similar situation having a unit. Then again, it is possible that you may at some point have to pay a “special levy” to get some major work undertaken. That can occur, but it depends on how the BC is managed. You can check out if there is some proposed special levy by checking out past BC papers. You might also want to check out how much money is in the sinking/admin fee of the BC. I have had a place where there was 3k in the funds (too low and not enough maintenance done on the block) and have a place where there is 100k sitting in the funds, so you might want to check that out.
RE fees, I always make sure that BC fees are under $1000 per annum. You will find some places where they have, for example, a pool and a lift, gym, etc. The maintenance fees on those items can be horrifying. There are some places which have about 4k annual BC fees. That’s 80 a week you’re paying so your tenant can swim around and use the lifts instead of walk- hehe. I go for very low maintenance units with no flashy stuff- basically, because they are heaper to maintain. Also, with gyms, there can be special levies to replace all the equipment every few years- so check that out too.
Best of luck with it all, kimcath.
kay henry
I am guessing that since yo mentioned your fathers estate that you may have comeinto an amount of money recently. Looking at you options at a time like this is fairly daunting. Someone told me once that if I ever won lotto to put all the money away for 6 months and jsut get used to haveing it befor any decisions are made. Makes sence to me.
I think that a financial advosor would be a good prot of call. Actually seeing that your first visit is usually free, got to ten different ones. Find tha one you like and that agrees with all the learning you have done from your own financial library, because believe me, there are those who know what they are talking about, and there are those that,,,,, well.
I have heard several peeople talking of Toowoomba recently. I get the feeling that +cf places there would not be in abundence but hey, as far as the realestate part of your portfolio goes, it may be jsut what you want. Good luck with it.
YOu mentioned shares, the only advice I can give you there is that shares, like realestate, when well chosen can be a great investment esp over time. Should you have a win early and decide to get out that is great, but if you are an investor you cant mistake yourself for a trader. They are two very different things. Investors usually buy for long term, traders buy because they have a system that is proven to make money over a number of trades. They get x amount of wins to losses, and the wins are X % of losses. If you want to trade then you need a system.
All the best in you r investing future.
J.
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