Hello
I am new to the forum and have only recently (the past 18 months or so) really started to research the property market properly.
I have made 2 purchases – the first I was not so well informed and did not do the best buying.
I am 25 years old and have a fairly simple goal to have 1mill of property within the next 18 months – 2 years and to let the equity build to make me a millionare on paper.
The second property I think I have purchased quite well – but am looking for comments and any advice on where to go from here.
Property 1
Purchase Price: $350k (purchased at market value at the time, market has had a slight fall since then – negative growth so far, but I am hoping for good positive growth when the market recovers)
Loan: $310k
Rent/wk: $380
Body Corp: $2000 p/a
Rates: $2000 p/a
Location: Within 2kms from Cairns CBD, medium to upper quality of finish.
Purchased July 2007
Current Value $340k (estimated)
Equity: $30k – $40kProperty 2
Purchase Price: $240,000
Loan: $190,000
Renovations: $15,000 (funded from additional savings)
Estimated rent/ wk: $280-$300
Rates: $2000 p/a
Location: Within 5kms of Cairns CBD in a growth suburb (Woree), med-lower class area but good a good percentage of houses in the area are undergoing significant renovations and improvements.
I have spent the last 6 months tiling, rendering, painting, more painting, installing a new kitchen, new vanity and updating bathroom, downlights and just about to finish paving outside to gain some more equity in the place. As far as I can tell I have spent approx $15k to make $50k
Purchased Feb 2008.
Current Value $290,000
Equity: $90k-100kI am in the process of selling a few assets at the moment in order to put together another deposit and should have $50k saved up again in approx 6 months from now.
The problem I have is that both properties are negatively geared (tax time is great – but I am cash poor and limited by my income).
I am a Civil Engineer on $60k per year which should rise reasonably quickly over the next couple of years. I am looking for any advice as to whether people think I have purchased well – I learnt a lot from my first property – not the best buy from what I can gather, but not a disaster all the same.
After watching several DVD's and purchasing a set from Dymphna Bohlt (I have only just bought them and watched the first 3) I am aiming to find some cash positive properties to offset the two negatively geared properties I bought.
I would appreciate any advice/constructive crisitism etc.
Cheers
Heath
HI,
have you thought about getting your accountant to lodge a tax variation ( I can't remember the correct title) that will increase your week to week cashflow rather than receiving a lump sum come tax time?
Large regional areas can often provide better cashflow, although they may not provide a great capital growth return. Also look at buying in another state so that you avoid paying land tax which varies from state to state. This is a state rather than a feral (oops typo although may still fit this context) federal tax.
cheers
Sonya
Thanks Sonya
Reducing my tax sounds like a good idea, I thought about doing this a while ago, but I do like the lump sum return every year – I guess forced savings. I usually put it towards a good cause.
I am considering my next purchase in Melbourne (Richmond/Prahran/Fitzroy/Carlton) , OR possibly Orlando, Florida. I need to do a lot more research before I dive in again though.
Looking forward to learning a lot on here.
sonyasal wrote:HI,have you thought about getting your accountant to lodge a tax variation ( I can't remember the correct title) that will increase your week to week cashflow rather than receiving a lump sum come tax time?
Large regional areas can often provide better cashflow, although they may not provide a great capital growth return. Also look at buying in another state so that you avoid paying land tax which varies from state to state. This is a state rather than a feral (oops typo although may still fit this context) federal tax.
cheers
Sonya
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