Hello everybody,
My name is Matt and I am very new to this site/investing.
Background
– I live in Melbourne.
– I am in my last year of University, and will be working full-time next year.
– When I was a 1 year old I was given a piece of land down in Metung, Victoria, which is now valued between $130,000-$140,000. 3 years ago, a road scheme was implemented into the area placing a huge debt on my land. Since I am a student I cannot afford to pay the roads scheme at the moment, which has now risen to $65,500 (10% simple interest annually). Due to my land being positioned on a corner, I have been exposed to a double frontage circumstance. If My land had 1 frontage, then the roads scheme debt would basically be halved. There is also rates and water bills that I have to pay totaling $1500 annually.
My questions are:
– Should I sell the land in Metung in order to purchase an apartment or house in Melbourne as soon as possible?
– Would it be best to invest in an apartment or house? Also, in the same state or outside?
– Should I be receiving such high debt figures on my land? Can I argue the case of the double frontage to narrow down my debt, due to my brother and sister only having to pay half of my debt figure because they have one frontage.
Thank you in advance! Any advice would be much appreciated.
I would have to tell you that Melbourne isn't getting a lot of positive attention right now, and the market isn't as great as it was, how long this will last, no one could really pin point it, you could also say that this type of market would present some great opportunities to secure a great deal. i would open up your options though and look for an up and coming area in Adelaide, or even going back towards QLD, places like Logan, Ipswich and Toowoomba, do your research on the areas around Australia that suit your investment strategy. to answer if you should invest in units/appartments or houses, my opinion would be houses, they come with their own title, you don't have extra issues like additional body corp fees, and over ambitious sink funds, or elevator problems, or insurance and legal issues, etc, again its just my opinion, Houses have a land content, and my rule of thumb is Land Appreciates and Buildings Depreciate, meaning, i make money when the land goes up, and get a tax write off when the building diminishes is value, and its more of an even spread, of gain and loss. this would require you searching for investmets that have at least 55% of there value is in the Land Content, so if you had a $200,000 house it would be split $110,000 worth of land and $90,000 worth of building. so i get an estimate of 2-3% of the $90,000 as a deduction off my income, and get 5-15% growth on my land value. put together, i end up with more. i don't dought appartments can be a good investment, but its a little hit and miss for me. to many rules guidelines and regulations aswell. so my advise…… Houses….. I can't advise you on what to do about the imposed tax on your land, its a pretty curley one. but maybe selling it and getting out what you can to put towards a house as soon as possible. Hope this helps a little….
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