Legal implications in Tenants in Common and the Perth IP Market
Been looking very hard in the IP market in Perth for the past few months, made 2 offers in Kenwick and Balga in the past 30 days, asking prices was $299000 and $335000, we made full offer price but both offers got rejected by the owner. Now we are bit confused, If full asking offer price is not good enough, what other strategy should we use in order to get us over the line?
One other question is: With Tenants in Common, I have been a sole trader for the past 5 years I am always bit worried been getting sued if something goes wrong. Wife is studying and should go back to the work force as a chemist later in the year, if we were to put say 99% of the property in my wife's name and 1% in my name. Does that mean if someone sues me they can only take away 1% of the IP value due to the fact I only have the 1% share in the IP?
IP Starter
Hi there
I'm very green myself and cannot help with your specific question but I can give you some info on one of the areas you are looking to buy in.
I am from Girrawheen in Perth, the next suburb from Balga, and know the area very well.
I would do a lot of research before buying there as I believe any capital growth will be very slow.
Please check it out, don't take my word, but a word of warning.Cheers
housegoodies wrote:Legal implications in Tenants in Common and the Perth IP Market
Does that mean if someone sues me they can only take away 1% of the IP value due to the fact I only have the 1% share in the IP?
IP Starter
Yes, generally this is the case.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for the advice kopidude, one of the main reasons I am looking to buy at Balga and surrounding area is due to the New North Project, I have seen alot of housing been sub-divided into 3 and 4 lots which make the suburb newer than others. I have lived in Stirling (the next suburb to Nollamara) for around 2 years before and I find it is not too bad apart from the 2 housebreaking I had. Girrawheen is the next suburb to Balga which I have no knowledge of, can you elaborate as to why Balga is not a good suburb for investing? I would love to some local knowledge in this.
And thanks for the advice Terryw. I can bear the lose of 1% if it goes to that. Does that also apply to the PPOR as well if the property is in joint names?
Hi Housegoodies,
I believe that the warning is about the type of housing in Balga as there is a lot of government housing. Typically areas like this would have lower capital growth. You would need to be very careful choosing the property and check out what is next door and behind too.
There is a lot of sub-division going on in Balga but I doubt you would pick up those properties that can be sub-divided into 2 or 3 for such a low price. Check the R-Codes and contact the council. Drive through the area and look at the streets that are better. You would be relying on the property being able to be sub-divided now or in the future to get good capital growth compared to some other suburbs in the area. It's no Cottesloe.
If you are just looking for an IP at a price under $350K you can probably pick up a nice new villa/townhouse in some areas around Perth. I have a bit of experience as an investor as would a lot of people on this forum and my experience is that a cheap old house in a cheap suburb will attract cheap tenants and very expensive problems. What you save in price you will pay in the lower return and the lower capital growth.
Cheers,
TraceyThanks for the comments Tracey, the one in the Balga has an asking price of $335000 and its only 12months old without any strata levies imposed on it. Rental returns will be around 4% – 4.5% PA. The one in the Kenwick is bit older, 1998 built and it belongs to a complex with an asking price of $299000. After our initial offers are rejected we made full offer on the asking price. To my surprise both vendors knock back our offer and came back with a price almost 1.5% higher than the asking price. I am bit confused now as to where can I find property for around $335000 relatively new? You have mentioned I can pick some new/villa around Perth for around $350000 atm. Would you kindly elaborate on the names of the suburbs you had in mind? The ones I am looking at at the moment are: Balga, Westminster, Bentley, Cannington, Kenwick, Gosnells. Apart from these suburb I am mentioned I dont have alot of choices, Armadale is other choice but I bit concerned as a friend of mine still lives there and her house got broken into 6 times in the last year.
Hi,
I saw some brand new apartments a couple of weeks ago called Southpoint apartments. I think they were in O'Connor or Samson. I was thinking Kewdale, Bentley, Cannington, Hamilton Hill and the newer areas down around Success. There are definitely new or almost new apartments in Success for around $310K – $320K. Right near the train and the Gateway Shopping Centre.
You can buy renovated units in East Fremantle for that price or you could a few weeks ago. It appears that the market is quite hot under $350K. It's more affordable. But I have not done any research myself. It's more what clients have been buying and talking about over the last couple of months. Check any new developments or renovated places in around Parkwood and Riverton. Thornlie maybe too.
I hope this helps.
Cheers,
TraceyHi Tracey, just did a search on the suburbs you have mentioned, it appears there is only a handful of choices. Got interested in the 1 bedroom apartment in Success, however if its under 50sqm, the banks wont even touch it. I will be interested to see how big is the 1 bedroom apartment of that size will be.
God, where are we heading in this country? No good choices under $350000 is a major concern. My poor friend been eating baked bean cans for the past 3 years and after finally saving for $35000 in deposit, he still cant buy anything due to the fact his annual income is only $37000 a year.
You have been a great help by the way.
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