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February 6, 2006 - 12:01 pm

Originally posted by Pursefattener:

Yes , 1990 was a hell of a year .

1995 for me was also an interesting year ( migrated to Aus with 600k from cashed up property sales and small business sale )

Shortly after that I lost about half of it…… arrrrrrggg… but that is another story [fear]

Women eh! Awesome post HB. Like the 35 vs 55 comparison but at the rate which the govt is going, I’ll be lucky to get it out at 65! Thats like another life time for me. So I don’t really focus on super right now (although the tax breaks are great). Is that an incorrect way to look at it? Touch wood but I may not even be here in 5 years time so wouldn’t mind enjoying as much profits as possible. Any financial planners out there with advice for someone who doens’t believe or rather trust in what the govts doing to our super. Offshore accounts, investments…? Nothing illegal off course…

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January 30, 2006 - 2:38 am

Originally posted by hb:

you must be looking at the wrong chart

http://asx.com.au/asx/research/ChartsSearchAndResults.jsp?postback=true&asxCode=bhp&compare=index&indices=XJO&compareCode=&TimeFrame=M10&chart.x=48&chart.y=18

whats it general trend over 10 years????

I believe BHP had a corp adjustment when it merged the old BHP and Billiton businesses together and its share price essentially halved but you got double the shares. Either way, price has more than doubled since then. Well done you lucky devils!

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January 27, 2006 - 2:08 am

Originally posted by kingdavid:

because it is a new home, duty is only paid on the value of the land… not the building…

so when Mirvac built the property, they have only paid duty on the land. when they sell the property to us, they will pass on the savings to us, which we will negotiate by how much…

[blush2]

If they are selling OTP new homes, I can’t see how you are only paying duty on the land. Are you settling the land first and then choosing your own builder or do you have to use Mirvacs? I would’ve thought there would be 3rd line forcing issues at play here but might be wrong. I digress. If you buy OTP, the developer has to factor in the cost of GST which is included in their sale price so you ultimately pay for the tradies and construction GST component. Similarly if you built a home yourself, you’d be paying GST on the construction material plus labour..etc.. which is considerably more than paying stamp duty on an established home. Plus you can’t claim the input tax credits for the GST paid.

Hence I’m not quite sure where the passing on of savings comes from. Perhaps I have analysed incorrectly all this building stuff.

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January 26, 2006 - 2:42 pm

Theres probably only a couple more years in this cycle to go in WA before it catches up to the median prices of the East. Its already caught up to Brissy and closing in on Melb (if not already) so you’d better hurry. Try to get your hands on some stock now and negotiate a long settlement if possible out to when ur flush with funds. Serviceability would be an issue though. IPs in Perth are getting increasingly negative to hold. However the outer rings with circa $200K house with block of dirt will c the most % increase if you can find any. Best of luck mate. Why a 911? Aim for a Lambo or Ferrari…

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January 25, 2006 - 2:37 am

Originally posted by Terryw:

Any profit would be declared on your tax return and payed at the end of the financial year when you do your tax – as far as I am aware.

As long as you haven’t lodged an ITWV Form. I think if you sold a property and will come into a large capital gain, might have to resubmit a a new form. I figure the ATO might not look too fondly on you having to pay back a large chunk in April 07 irrespective of the chunk arising from a capital gain rather than an ambitious “mis-calculation” of your deductions. I guess may just have to argue the change in circumstances occurred too late in the FY. I mean, does anyone voluntarily provide tax instalments to the ATO if not specifically requested from them?

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January 25, 2006 - 1:40 am

Originally posted by pipelinebuilder:

Yes I have a job, no the 40 K is passive, its not income from my job.

$40K passive and I gather thats not from paid up IPs or dividends either. Congratulations. Sounds like ur well on your way already. Care to share with us what business ur into?

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January 24, 2006 - 1:26 am

The old trading adage – let the profits run and stop your losses. Would you have sold Nasdaq at 3500 when it was on its way up to 5000?

WA is still relatively affordable. Until I get to a point where I can sell 2 WA properties to buy one house in Syd, then its a sign to me that we’re sort of getting to some kind of equilibrium. Why would I pay $450K+ for a 30-40 year old 2bed room unit in Syd when I can pay $350K for a 4×2 in Mandurah with better yields, depreciation benefits and potential capital growth?

If you have a look at median wages, all the capital cities don’t vary by much – $4K max but the disproportionate house prices??

BTW Shwing, don’t be so quick to come back to Syd. You’ll need very deep pockets to buy IPs over here still. Vendors aren’t discounting their properties by 10-20% so not many bargains around. We’re in for the long haul before the next cycle. Just keep picking off the undervalued suburbs cos its that much harder in this cycle to just buy ordinary and ride the wave.

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January 23, 2006 - 4:06 am

$650 a week?? Wow! Thats impressive. I’m sure the cap growth have been phenomenal too. Was it a fully furnished executive rental? And if you don’t mind sharing, which suburb is it in?

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January 20, 2006 - 3:22 am

I guess young people are doing it now cos they simply can’t afford to buy a house in the cities. Simple as that. If I could afford a PPOR inner city, I would. Instead we have to buy in outer suburbs or interstate when historically the best performers are in the cities. Its nice that the market is flat to negative in the cities in the East. Investor demands are pushing prices in the regionals.

But make sure you have a clear exit strategy. When the cities start moving again, you want to be in the game. Our parents have traditionally done very very well from buying and holding PPORs CGT free. Food for thought…

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January 20, 2006 - 2:54 am

Where? Busso? I don’t think its that nice a place. Theres no big shopping centres, fast food, high rises, busy roads, loud bars and clubs. Who’d want to go there…

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January 17, 2006 - 2:17 pm

The shortage in coastal WA is so dire that they are now acting as buyer’s agents. Yep, buyers pay their fee to entice vendors to sell. Couldn’t one do the door knocking themselves….? The RE agents are reaping it in. The principals must be laughing all the way to the bank. Not a bad way to make a quid considering the amount of value add they provide to society. Lets not get me started on how much our teachers, nurses and social workers get paid..

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January 17, 2006 - 1:09 pm

After the housing finance numbers today, this was put out by our Economics team:

New lending to owner-occupiers (number) rose 0.4% in November. Stripping out the impact of refinancing we find
that lending was also up 0.4% in the month, with an 8.5% rebound over the last four months – to be up 10.6%yr.
The spring bounce is evident in both the established sector (up 0.6% in the month and 9% over four months) and new construction commitments (down 0.6% month
and up 6.4% over four months). If this improvement is sustained, housing activity will switch from being a drag
on the economy over 2006H1 to a positive during 2006H2.

A big part of the story is that first home buyers are coming back to the market in a major way, responding to improved affordability – with house prices flat to down and incomes
rising at a time of robust labour market conditions.

Investor finance appears to be moving rapidly sideways, with low rental yields a negative for this segment. If investors remain on the sidelines, then it is more likely that property prices will continue to consolidate.

The RBA’s return to a tightening bias in November is also a potential negative for the housing sector. Although, at
least for now, market interest rates are not responding to the Bank’s rhetoric – with the 3 year bond rate trading
some 0.35% below the 5.50% cash rate.

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January 17, 2006 - 9:11 am

Hi Michael, thanks for your reply. Appreciate your comments seeing you’re probably one of the very few in this forum who has seen AND been involved in a few cycles in Oz. I gather buying pre-cycle boom and buy under market value is a strategy which you employ. And something which you can add value. Easier said than donw I’m afraid in this environment. Nevertheless, thanks for your comments.

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January 16, 2006 - 5:08 am

Hi Michael,

You wrote, “When doing your research on these suburbs, check out where it is in its own property cycle. IF it is peaking then maybe you should put off your buying decision.

You will do better by timing your investment purchases well and buying counter cyclically.”

By this theory, do you suggest that we should not be buying in a rising market like WA, NT and some parts of FNQ? Rather, try to find undervalued property in the current slump in Vic/NSW?

But my rationale is that weren’t these “undervalued” properties expensive once before? I mean its all relative. Say market in that suburb for similar home moved to median of $350K and you can find one for $325K which means you have bought well. If you bought during the boom while prices are still going up as in WA or NT, you could pick it up for $300K before it settles at the peak for $350K. Does that make sense?

But I suppose you never know when it will settle in at its peak of $350K. However from all reports, WA and NT seems to be the pick at the moment and if you believe theres still a couple more years of flat to negative growth in major eastern capital city locs (with some exeptions off course), why wouldn’t you look at WA or NT in the immediate term only to move the funds over East when the party’s over?

Interested to hear your views.

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January 16, 2006 - 4:38 am

Pipeline builder wrote:

I strongly belive I will be retired by 30, this was reinforced this week by meeting someone that is 45 has 2 kids and earns as much income in their job as me, boy was it a wake up call.

If anyone can show me a faster way to earn 40K passive income in under 12 months than what I did please contact me, my email is [email protected] or pm, i am welcome to hear how.

Sorry pipeline builder but how may I ask do you intend to retire by 30? I couldn’t really find a post with the $40K passive income strategy you were talking about. Are you referring to your FT job?

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January 16, 2006 - 3:09 am

Hey Marissa, How you doing? Happy New Year! I can switch to a 3 year fixed Int only at 7.07% but them switch and application fees are annoying. Still very new to CPs and IIPs hence I read with envy on Dazz’ deals.

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January 16, 2006 - 1:48 am

Before everyone jumps on to these deals, remember that its minimum 30% deposit & you’re paying around 7.5% interest and 15 year P&I type loans. You could probably get 5 year Interest only but not sure if you need to jump serviceability or other credit hurdles. Any broker who would like to enlighten will be much appreciated.

Also for that kind of $, I don’t think it will be that big a piece of dirt you’re picking up (perhaps thats why Dazz is happy to let us fight over the scraps)?

Do your research, its not without its risk. I have a building – 2 shop fronts with 2 x 3 bedroom units upstairs. Net of 9.5% including agents comm with resi upstairs so pretty good deal but just found out last week that one shop is intending to close its business. Just unfortunate for the business – perhaps I didn’t do my research enough but can still service loan without that rent. Lease on that shop was sewn up for 3×3 with 2 year to go. We’ll see what happens, agent says should be able to find new tenant to assign lease or tenant pays the difference – fingers crossed. Welcome to the world of CPs.

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January 16, 2006 - 1:22 am

I’m sorry to say Sweet that if it fit the 11 second rule, it won’t ever make it to realestate.com.au. Have a search under that or positive cashflow investing and you’ll find that its getting a lot harder (though not impossible) to find such deals. And I suppose the secrets out too and everyone whos bought Lomas or McKnights books are all looking for the same thing. A lot easier when theres not so many people to compete with. Even the regional’s net yield have come down to under 5% mark.

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January 16, 2006 - 1:15 am

Hey Carlin, I’m thinking Redwings saying the same thing. Accessing equity is through getting a Top-up on the existing loan/property.

And it will be too late when you wait for the market to plateau. It could be 10-20% more than today. All the experts don’t think you’ll get the 20%+ returns again in WA in 06 but at least high single digits which is way better than negative or flat in Syd and Melb. Happy hunting!

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January 12, 2006 - 7:26 am

Greenwich Village is the yuppyville of NYC between downtown CBD and midtown – Broadway, Times Square..etc.. I reckon Manhattan must be the most expensive piece of dirt anywhere in the world – and the river/harbour doesn’t even look that nice. Heres an extract I cut out re John Jacob Astor. I think he was worth $40M at his death in 1848, worlds richest man in America then:

…Before long Astor was operating on his own account and prospered at once. He began putting his profits into Manhattan real estate, investing nearly $7,000, a large sum of money in those days, between 1789 and 1791. Astor’s strategy was to buy, very cheaply, land that lay far beyond the developed area of the city and then to wait for the city’s rapid growth to reach his lots. In 1803, for instance, he paid $25,000 for seventy acres located more than an hour’s ride north of what were then the city’s physical limits. By the 1870s the land was worth $20 million to the Astor family. Today the area is known as Times Square.

From my calcs, that piece of dirt has doubled every 7 years. But
70 acres in Mid town – that is mind boggling. I don’t even want to work out how much that is some 130 years later. Puts the Trump and Rockefallas of the world to shame.