Hi Peyton,
Any reason you are going for a new place? Everything at Yarrabilba is likely to be new (maybe even OTP?? eekk!!) but, unless you are building a place yourself, buying new is unlikely to give a new investor a fair shake at making any money for quite some years.

Yarrabilba is smack in the middle of thousands of acres of…[Read more]

Hi Golderneye,

+1 for what TheNewGuy said !!

Add to that – how many townhouses in the string? 4 or 20? i.e. is this a boutique block, or a “slamasmanyasyoucanontheblock” build?

The important part is “How much land will you own?” Land is what appreciates over time – as infrastructure and desirability increase, so does the location of…[Read more]

Hi SB,

I am just wondering if using an offset works differently to a redraw?

A redraw is a loan – an Offset is not. So yes, they are different.

As I understand it (i.e. NOT advice… ;) if you repaid the $$ into a redraw account, you would need to make a loan application to borrow them again. An Offset account on the other hand is…[Read more]

Hi SB,

I am just wondering if using an offset works differently to a redraw?

A redraw is a loan – an Offset is not. So yes, they are different.

As I understand it (i.e. NOT advice… ;) if you repaid the $$ into a redraw account, you would need to make a loan application to borrow them again. An Offset account on the other hand is…[Read more]

Hi Alistair,

if anything it should be easier to decide to sell at a loss as you receive a future tax benefit rather than a liability if sold at a profit.

By taking a loss it allows you to offset a future capital gain…. is that what you are meaning? I must admit I had never thought that way – my kneejerk reaction was that a $100k loss meant…[Read more]

Hi Pimobpi,
OK, I see where you are coming from. Since your question is firmly in the realm of finance, thus needing input from a Mortgage Broker or similar, I will certainly refrain from stating very much. What I will say is that I believe you are firmly on the right track – and that mixing of personal and investment monies can lead to…[Read more]

Hi Pimobpi,

I agree, Elizabeth’s question is a great question, and Corey has answered it with as much as he could, given the information provided:-

Just make sure the equity is ‘accessible equity’, theres a difference.

That quote (to me) is the key. Elizabeth said “I have $20k – $30k in Equity”. What was NOT said was if it was ava…[Read more]

Hi Pimobpi,

I agree, Elizabeth’s question is a great question, and Corey has answered it with as much as he could, given the information provided:-

Just make sure the equity is ‘accessible equity’, theres a difference.

That quote (to me) is the key. Elizabeth said “I have $20k – $30k in Equity”. What was NOT said was if it was ava…[Read more]

Hi all,

Equity is the amount of value in a place that is yours once all mortgages or other costs have been repaid. As an example, if you have a $300k mortgage on a $400k house, then $100k is your Equity. Of course, if you sold to have cash in hand, the cost of selling would itself reduce the amount of $$ coming back to you.

Equity can be…[Read more]

Hi SM,

Well, given your last post (about sheeting over the top) and this earlier quote from you :-

but the house is probably some thing for the developers to tear down and replace down the track ,

This is all about safety – so if you were to use marine ply sheets, or an equivalent water-resistant material, and it was in large sheets (such…[Read more]

Hi @knightm,

PS @Benny and mods I assume this is ok but if not please delete.

No issue from where I sit. Providing a service and helping out members are both to be applauded.

Benny

Hi Codie,
One of those little traps is wrapped up in the Phrase “Jointly and Severally Liable” (think of severally as meaning separately – which it does).

In essence, each one of your group of 4 is considered to owe ALL of the debt for a property (separately liable) – but, if income producing, only one quarter of the rent is allowed to be…[Read more]

Hi Codie,
One of those little traps is wrapped up in the Phrase “Jointly and Severally Liable” (think of severally as meaning separately – which it does).

In essence, each of your group of 4 is considered to owe ALL of the debt for a property (separately liable) – but, if income producing, only one quarter of the rent is allowed to be…[Read more]

Hi Craig,

An email hit my inbox today – in it, it had this section re units being built currently:-

In 2011, we added 12,000 units to the market in Sydney, Melbourne and Brisbane. In 2017, we’ll be bringing 52,920 to market.
Between 2007 and 2011 we built less than 60,000 units. Between 2012 and 2017, we’ll build close to 200,000.

This was…[Read more]

Hi Suave,
No second bathroom eh? Any chance of building an ensuite first? ;)

I don’t know if a week is required (but then, this was never my trade – you may well know more than I). What I would be doing is checking with a tradie just how long they say it would take, then allow a day for contingency. Get two or three quotes and comments…[Read more]

Hi Dean,
Well, I reckon they “could” be right:-

“Weekly rents across the combined capital city measure increased 0.3% in February however rents were unchanged over the past 12 months”

If they grew in February, but had previously dropped 0.3% at some other time in the previous 12 months, this has the nett effect of staying the same over the yea…[Read more]

Hi Zen,
A great answer from Corey – to expand a little more, it is land that rises in value while buildings depreciate. So when we read of Houses appreciating by 10%, it is usually houses depreciating by 5% and the land gaining 15%.

Project that thought into units, and you have the bulk of your value in a depreciating asset, and VERY…[Read more]

Hi Pimobpi,
Hehe – I read all the way through – great post with a very timely message.

Benny

Hi Jprop,

Property 1 will provide me with a rental yield of around 9% (leased until Sept 2016) but will chew up all my extra cash if i purchase it.

Sounds like a really good start with a 9% yield. But what is it about THIS place that has such a good return? You say it will take all of your extra cash – is that because you will need to spend $$…[Read more]

Hi Jprop,

Property 1 will provide me with a rental yield of around 9% (leased until Sept 2016) but will chew up all my extra cash if i purchase it.

Sounds like a really good start with a 9% yield. But what is it about THIS place that has such a good return? You say it will take all of your extra cash – is that because you will need to spend $$…[Read more]