hello everyone,
i am lucky to find this forum while looking at my first investment. I am intereted in an off-the-plan apartment in melbourne CBD. the building will finished and ready to settle in mid 2009, i need to pay 10% deposite now and nothing else till settlement. one attraction is also the stempduty is only payable on what it already built, which is less then two grand.
From what i heard, something sounds too good, is it true: I can sell it before the settlement, so i don't even need to take the loan and the capitle gain in a year time should be well enough to cover the interest of my 10% deposite.
before the settlement, the property is not even mine, how can i sell it? what's the potential problems relating to this method? how would you rate the capitle gain percentage for the apartments in melbourn CBD in recent 2 years?
thank you.
Hi,
Welcome to the forum and thanks for you post.
You can certainly sell your right to the finished product, and this is an everyday transaction. That is, you are not selling the property so much as the right to the property once it is finished.
Some things to be aware of though are:
* Is there a rental guarantee? If so, how much and what are the fineprint clauses?
* Leave the lowest deposit possible. 10% is not etched in stone and the less down the better as you are essentially getting a 0% return on that money in the meantime.
* Get some idea of what the body corp costs will be once finished – it may be more than you expect.
* Does it come furnished? If so, do you like the furniture and are you getting a good deal?
* How many carparks does it come with? My guess is only one, but find out. If you can get more than one then it may be worth the extra cost as they are scarce and will be a key selling feature when you decide to sell.
* I hope the capital gain eventuates. In years past it has not and people have been left disappointed.
* Be aware that the property may not be easy to sell before it is finished as there is a limited market of potential buyers. If many people try to sell then it is possible the value will drop below what you paid for it.
* Final point – some financiers are very particular about what they will and won't lend for in terms of inner city apartments. Do you research so you are sure you will get a loan – visit a bank or mortgage broker to check out your options.
Hope this has helped. Without wanting to sound opportunistic, you sound like the ideal sort of person who would benefit from coming to the upcoming 3 day conference. Check out the link below.
All the best,
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
thank you very much.
i am acutally talking about the CitySide apartment which is at northwest corner of Melbourne CBD. For $7000, it comes with 6% rental gaurantee from the developer for first year from settlement(1/05/09), property mgmt fee and dishwasher and blinds, but for deposit I need to pay only 700 of it.
I thought I don't need to worry about the the body corp and water rate stuff if i am selling it before settlement? but i know the cost of those anyway. It's not furnished. single carpark.
the 1 Bed+study apartment I am looking at is 436K which includes the 7K investor pack, and two bedroom one is 526K. I am thinking the two bed one will have better growth. what do you think about these apartments in a year time?
I agree with Steve, however I would add run, run away from this risky deal. Dont stop until you've purchased a finished house with good tenants. Dont blow your money speculating. Leave it for a few years.
Lalibella wrote:I agree with Steve, however I would add run, run away from this risky deal. Dont stop until you've purchased a finished house with good tenants. Dont blow your money speculating. Leave it for a few years.thank you very much for your advice. It is actually risky for me after more thoughts. I would look for something else. good luck your investments
Mate, in this property market an Off-the plan could be a killer…..you are not talking about real estate investing…..that's more speculation
http://therainmaker.net.au
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