Evening all…
I'm looking for some basic advice and/or guidance ahead of forthcoming return to Australia in the next year or so. I'm a part time property developer in the UK and have 3 self-builds and 4 renovations behind me. I usually sell on as soon as the site is finished but am looking at keeping the two that I'm currently working on and will rent them out as the market is slowing slightly. Having said that I' definitely not a gloom and doom merchant and I don't beleive the bottom is about to fall out of the market……am thinking it's just settling slightly.
I have started to monitor things in Oz now as me and the gang will be moving back at the end of 09 and are thinking of returning to my old stomping ground of Victoria (near Dandenong) or possibly up to Mt Tamborine.
I do have a couple of key queries that I'm struggling to find answers to with my trawling on the internet and I'm hoping there will be a few people reading this that can point me in the right direction.
1: In the UK developers have a wide range of Buy to Let mortgages which enable people to raise a mortgage for an investment property which is not based purely on the individuals personal income but also on the expected rental income. This effectively means that a property with a purchase price of 100k could be bought with just a personal deposit of 15k (so long as the rental income covers the mortgage repayments). Are these mortgages available in Oz and are they common>
2: Whilst my dad is fully qualified builder, I am not but I have been in and around building sites all my life and know enough about the various trades to complete both a self-build and full renovation on my own. The UK system allows anyone to complete the various trades required (except for the installation of gas appliances) as this work then needs to be passed by a building inspector employed by the council or an insurance company. My understanding of things in Oz is that all work has to be completed by qualified tradesmen which removes the ability for a developer to get really 'hands on' and reduce the labour costs. Is this the case?
I do have a few more queries similar to these but will spend a bit of time reading through some of the other threads and see what I can find.
Look forward to hearing from you….
Cheers
SpencerHi Spencer,
in answer to your questions
1. Yes our banks do something similar although not called the same thing most will take in the expected rent and tax benefits associated with an investment. Assuming they cover the repayments or have the capacity to cover the shortfall. They will however expect you to have an income in the case of failure to rent etc. They will also expect a settled job and accomadation situation.
2. I am not an expert in this field however i am aware that there are definitely things you will not be able to do. However you can do quite a bit as an owner builder would be worth contacting the BSA (building services authority) in the relevant state to evaluate what you can do. Also worth while checking with the relevant local council (although this could be a headache)hope that helps.
Hi jibbah,
funnily enough I am living in London, ,over here on a working holiday and will be returning to Oz at the end of the year. I am from WA and the rules about construction differ from state to state. In WA all new houses need to be signed off by a registered builder (which requires college training and then exams plus showing examples of work-usually chippies turn into builders as such.) I know this because my partner is a chippy and is planning to start his builders reg next year.The registered builder takes full responsibility for that house structurally for 10 years, even if owners buy and sell many times. There is benefits to this as the houses are of sound quality and that means less dodgy builders out there. If there are conflicts associated to the quality of the build, it is taken to the builders reg board (like a court system) these disputes can happen frequently (-mainly due to peeved off clients about other issues). As It takes incredibly long time to build a house in WA at the moment anywhere from 12 to 18months even longer…
In a sense WA consists of about 3 or 4 major building companies and they mass produce these 'shoeboxes' I like to call them and are all just painted a different colour. Then we create this suburbia of different coloured shoeboxes! which is probably a different discussion point. my point is its usually hard to break into the business of building houses.
Yes you can get an owner builder licence, but you are restricted and no builder wants to work with an owner builder, because if the builder feels your quality isn't up to scratch they wont want to take on the job (at the end of the day their registration is on the line). I know all this because I worked at a building company for 2 years.
hope this doesn't put you off too much. haha because me and my partner are planning to do the same. I am a designer and he builds them, I think their is definitely a niche market to creating new modern designed sustainable houses of high quality and aiming towards the high bracket and building a couple of really well designed homes a year involving the client through out the process. Instead of getting as many clients to sign up as possible to build a house, tell them it will take 8 months to make and really taking 2 years to build!
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