Forum Replies Created
Hello.
How long have they been in your property?
An increase of 5%pa, which is what you are proposing, is pretty standard.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello.
I concur with cnat on speaking to a broker – it generally won’t cost you anything (especially f you go to one of these places like Wizard or Mortgage Choice) and will give you a good idea of where you stand and what you need to do to move forward.
Without fully knowing your circumstances I would certainly suggest you look into getting rid of that Personal Loan before you jump into an IP, and to pay down any credit card debt you may have as the lenders put a disproportionately high weighting on this when working out your borrowing power.
Good luck,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello.
I can’t say what you should do as only you can make that decision. I can, however, advise you to sit down and actually do the numbers – that is, work out exactly what each of these options will cost you to start out and to maintain over the long term. The bottom line may very well make your decision for you.
For example, when faced with a similar decision my wife and I did the numbers and discovered that even with a CF- Investment Property (IP) we would still be $40-50 better off per week AFTER TAX if we stayed renting than if we were to buy and live in own home.
You could also consider buying your own place, living in it for a year to take advantage of the New Home Owner’s grant and reduced or lack of Stamp Duty (depending on where you buy) before renting it out to someone else to enjoy the tax breaks and rental stream.
Also, take a look at some of the older topics in this forum (do a search for some key terms) as there is a wealth of info there for the upstart investor. Don’t be afraid to ask questions and don’t be discouraged if you ask them on this forum and you don’t get answers. Sometimes the right peopl aren’t watching at the right time.
Finally, READ, READ, READ. Use other people’s experience to your advantage!
All the best,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hi.
I’ve never been to one of their seminars but I have found that every piece of education I’ve invested in (be it books, seminars or online) has paid dividends. It might not be in the short or even medium term but at some stage that knowledge has come in very handy and has saved m money and time. And if you’re an investor it’s a tax deduction.
Having said that, the only cost you can never recoup is time spent, so factor that into your thinking as well.
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello.
Purchasing costs / closing costs:
Deposit (from $1000 to 20% of asking price?)
**Deposits can vary but typically are 5-10% of purchase**Legal fees (getting solicitor) – $700 – $2,000?
**Budget on $2000 but it may be less. Make sure the fees include disbursements and GST**Stamp Duty – roughly 3-5% of the final property price?
Mortgage Costs – total of $800-$1350?
– Mortgage Application Fees – roughly $400-$750
– Mortage Insurance (if you are borrowing more than typical 80% LVR) $400?
**Mortgage insurance varies – check with your lender or mortgage broker.
For Stamp Duty and Mortgage costs estimates try this calculator: http://moneymanager.smh.com.au/tools/calculators/stampduty.html**Building Valuation Fees (optional? or its required to get a valuer to give a valuation so that the bank can approve the loan?) – $200?
**Generally the lender will arrange this themselves. If you want a market valuation you’ll need to talk to a valuer**Building / Pest Inspection – roughly $300
**Budget on at least $300 for each of these. Make sure they are insured and experienced. It’s okay to ask about previous work done.**Initial Maintenance / CleanUp cost –
**Depends on the property**Any other costs?
**How mch is your time worth? Due diligence can be very time consuming if you’re learning (believe me, I know) but it pays to be as thorough as possible. After all, once you exchange contracts it’s YOUR PROBLEM or YOUR REWARD.Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hiyya.
I concur on the 5% closing costs. It can be a shade less than that but 5% is a good guide and won’t leave you with a massive hole in your budget come exchange.
There are a couple calculators floating around the ‘net to help you roughly work out closing costs. Take a look at this one for Stamp Duty and Fees: http://moneymanager.smh.com.au/tools/calculators/stampduty.html
Don’t forget you’ve got Conveyancing fes on top of that (figure up to $2000). Though you can get cheaper I advise you to make sure that the fee quoted is ALL INCLUSIVE and doesn’t omit disbursments, GST and the like.
Oh, and you’ll need insurance AT EXCHANGE to cover yourself.
Good luck!
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hola.
You should take a look in the Value Adding forum on this site. There are a couple strings in there re. building costs. One was started by me. You can find it here: <https://www.propertyinvesting.com/forum/topic/24626.html>
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
I second that. Get insurance at or prior to Exchange.
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello TK.
While not 100% on topic for you, the link below is to a forum string I started when looking at some student accom in Newcastle. Some of the replies may be of interest. Perhaps you could send a PM to some of the contributors.
<https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=24571>
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Cheers for that Tony.
I’ve PMd you re future questions.
Thanks,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello.
I’ve just been researching a distant suburb myself and have found the following to be useful:
1) Go to http://www.propertyvalue.com.au. You have to pay a fee for their in-depth research and figures but you can do a free postcode search which wil give you broad figures such as demographics, employment, home ownership and so on. It’s a decent start.
2) Check out the council website for the area. Pay particular attention to the sections of the site relating to new developments in the area (private or public). You may alo find archived council reports detailing future vision for the area, outlining areas of concern and so on.
3) If you can, get your hands on a local and/or community newspaper or two (back issues as well, if possible). Residents views will often be well represented in publications like these (particularly in the Letters section) and you can get a feel for the area without being there. Often crime or police reports are included as well.
4) Gab to as many local real estate agents as you can. They have an eye on the market and can tell you what people are looking for at any given moment. Talk to a couple to get a good overall picture.
That should give you a good start and shouldn’t take too long. Anyone else care to contribute ideas?
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Thankyou 1HV.
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello Recherche.
I know it seems great to have property fully paid off but all investment wisdom I’ve read and discussed with IP friends points to maintaining managable levels of debt. After all, if a property is fully paid off there is less of your windall in your pocket and less tax breaks come June 30.
Personally I would pay down the debt to a level where it was CF+ AFTER TAX giving you more money in your hand and making someone else’s money pay your remaining mortgage. Use the larger amount of money in your hand to buy more IPs.
This is just my opinion but have a read of some literature on the subject. I found Dolf De Roos’ ‘Real Estate Riches’ to be a great help early on. If you can get your hands on it (ISBN 0971165203) it’s an easy, informative read with lots of tips for your situation.
Anyone else care to toss in their 2 cents?
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Thanks Amanda.
I’m a new subscriber to API but hadn’t heard of that website. I’ll check it out now.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hi.
I’m no expert and from your post I’m not exactly suer what kind of development or subdivision you’re proposing but maybe this will spark some discussion…
If you already own the property why not just get a surveyer in, get some plans drawn up and costed and take them to the council? I’m sure it wouldn’t cost more than a couple thousand at most and would give you a better idea of where you stand?
Perhaps I’m being naive but, as I said, hopefully someone with a little more experience will chip in. Perhaps, Phil, you could elaborate on your post with a bit more info?
Art
‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Hello.
I spoke to the council and they advised that the minute you take on multiple sub-leases it is classed as a boarding house. The only way to get around it is to have one lease for the whole place and I doubt anyone would be willing to take on a lease for $700 per week.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Thanks, Elka.
As it turns out the place is not in the correct zoning for boarding house status so it would have to be let on a single lease or on illegal sub leases, neither of which seem proftable or sensible to me. Shame as it could otherwise have been a tidy earner. I suspect this is why the current owner/builder wants to unload it.
Thank you for your reply.
Cheers,
Art‘Great spirits have always encountered violent opposition from mediocre minds.’ – Albert Einstein
Cheers Derek.
If and when you do manage to get hold of the broadsheet I’d love to take a look also.
Art
