Forum Replies Created
I thought this topic was worth a re-visit, as its subject matter was widely reported over the last few weeks (as the election loomed).
Here we are three years later – and (fortunately, imho) the changes discussed above won’t be taking place as Labor was roundly trounced at the 2019 election. Seems not many voters wanted:-
1. Labor to cut CG discounting in half (meaning we pay more Tax on any CG’s)
2. Not too many people were impressed by their intent to take away Franking Credit Imputation, effectively giving a “wage reduction” to many self-funded retirees (while touting that “the big end of town were to be hit”).
3. Negative gearing to be applicable ONLY to new properties in future (but any existing NG properties could remain that way until sold – but with a likely value drop at that time)
4. Labor to look to mandate usage of electric cars to be at 50% within a few years (say wha? – like, who charges them overnight – the solar panels? :p ). Never mind that existing vehicle’s values would plummet – and, how does one charge an electric car while on the Nullarbor for example?
5. Labor to legislate for 50% renewables by 2030 (South Australia can tell us what a GREAT idea that has been).
6. Greens threatening to stop ALL coal mining (I know – they aren’t in power, but their Senate seats would help Labor to govern, so a bit of arm twisting is likely, yeah?). What happens once a $60bn per annum income to Australia goes away? Not to mention the only reliable power sources apart from a few gas power plants also going away.
7. A threat to jobs with the stopping of coal mining (another Green initiative?) – sure, they will retrain everyone to work in renewable industries (but I wonder at the validity of that statement – it is right up there with “renewable power is cheaper than coal-fired power!”)
8. Labor refused to tell the country the COST of implementing some of these wild schemes ahead of the election. So guess what?
The voters weren’t convinced, so now we have at least another 3 years to get a few more wrinkles ironed out before the next election. Whew, that could’ve been close.
Why not join us all on tomorrow night’s webinar (advertised on the front page, but link below)
You’ll see from the advert that there will be a Market Update for all cities, a whole heap of other good stuff, as well as a Q&A session. Very good value for just $20. Check it out,
What are the Frankston 2019 house prices? It gradually continues as the previous year.
Surely, that will depend on other factors. Just because a suburb’s values have increased over 2 or 3 years is no guarantee that this will continue for the current year. It could be that the prices have hit a peak, and the values may flatten or drop in 2019, couldn’t it? Careful scrutiny of the market might provide some clues, but certainty of further price rises is far from assured.
I want to say that Frankston works only for Melbourne or any other cities.
Sorry, but I am still unsure what you are saying or asking there. To try to share my confusion, let me say that Frankston is a suburb of Melbourne, so it really can not “work for other cities” in any way. In fact, can it even “work for Melbourne”? What do you mean by “work”in that sentence?
I can only think that your question needs to be asked again but using different words, so I can understand just what it is you wish to know.
I want to know that Frankston works only in Melbourne or others?
I don’t understand the question there. Care to rephrase it?
Keep in mind that Steve’s book was written many years ago and, even when he was buying up, this was in a “forgotten area” of Ballarat. He bought there because the numbers worked for him there, at that time. Later, when the numbers didn’t work, he moved his focus to NZ, then later to the USA. It was all about tailoring his investing to the areas in which that style would work.
In my welcome PM to you, did you happen upon the example (from a more recent timeframe) where a young bloke was using a similar pattern to build up his portfolio. In case you didn’t, check out his post here:-
Now, that is from 5 years back or so – I suspect his way can still work in some areas today – but then, his way worked by having him doing renos – will THAT way work for you? See, there are many ways property investing can work, but they don’t all suit everybody. You might be better to start with the end in mind and work out what you want to achieve, and by when, then come back to ask how you might make that happen. For some, a slow steady path works – for others, they may be in more of a hurry (which introduces more risk).
I just checked Darryl’s story, and I note the original posted photos don’t display any more. Suffice to say, the numbers were impressive. In most cases, he bought low, renovated the place, then refinanced to get this depsoit back for the next property – and nearly ALL of the properties had a 10% return, so his share after mortgages and all other expenses still left him with a healthy chunk of change. If I recall correctly, his total Income from property was around $200k pa, and his expenses totalled about $140k. In a later post on here, he reported that he’d started working on paying down debt to get his leverage down to 50% to further consolidate his portfolio.
Further down in the linked topic you will see where some of us were able to buy back-issues of the magazine, so you can easily read the whole story. I highly recommend it to you,
Oh my – here we are, knee-deep in electioneering ahead of next week’s Federal Election, and half-truths and untruths are flying thick and fast. Do share some of yours too as you see/hear them.
I rather like someone’s suggestion “That parties found to be telling blatant lies during an election campaign should be brought to justice!” I can’t see how easily such an idea could work, but boy, I am hearing some whoppers out there right now.
1. This one, this morning, from Get Up who are actively targetting Right-wing sitting members – targetting Tony Abbott because “he refuses to debate Climate Change”. That’s funny – for years, I’ve been hearing “the Science is settled” whenever anyone wants to debate the issue – and THAT four-word slogan has been widely promoted by the Left side of politics. Is GetUp now saying “the Science is NOT settled after all?” Not really – they are simply slinging mud and hoping some will stick !!
2. Ads right now (from Greenpeace) show Tasmanian “survivors” posing in front of blackened land (after a bushfire supposedly) and blaming the Govt as if the burning of coal has created the bushfire….
Both Tasmanians and Victorians should be looking to the REAL cause of out-of-control bushfires, and that is the Greens themselves who, with the balance of power in both State Govts, vetoed the long-held practice of “burning off” yearly. So, when lightning eventually DID start a fire, there were many YEARS of build-up of fuel on the floor of the forests, such that it became a wildfire that was impossible to stop.
For those of you that think “Oh, we shouldn’t burn off, as it makes ground-dwelling animals homeless, and kills lots of them” I simply say “Think about it – a small fire started on a day where wind is low, specifically for the purpose of burning off the fuel load, WILL allow animals to escape as it creeps along the ground. It also greens up the forest, and promotes the seeding of fresh grass and new trees. But now, think how many animals CAN’T escape when a wildfire is roaring and jumping highways as it burns out of control. And think how many people lose their lives, including firemen who are attempting to control the uncontrollable?
Fortunately, the Greens don’t hold that power in Qld – yet – so we still burn-off to contain the build-up of fuel and keep future fires more manageable. It’s all about common sense – some parties have it, others are sadly lacking.
More thinking is required methinks :p
Let’s hear some of YOUR beefs too…. ;)
As the clanging bell of “Climate change” becomes more and more strident, the more I believe we all need to take a cold shower and re-look at some facts.
One fact I recall (about the time that we were fighting “chlorofluorocarbons in aerosols, and the hole in the ozone layer”) was that the icy poles on Mars were observed to be melting (or had completely melted). I can’t think ANY scientist on Earth was attempting to blame us for that. Of course not – the Sun was having a bit of a party, and that probably aligned with those times (mentioned above – from 1975 to 1998) when our Earth was getting hotter too. But for the last two decades, our temperature HAS NOT increased. The Sun has cooled – for now….
Isn’t that significant?
Doesn’t that throw some doubt on the whole carbon dioxide / climate change / end of the world drama that is clogging up our newspapers and our lives?
Seems not – the bells just keep on clanging, drowning any attempts to bring a wee bit of common sense into the argument. Schoolchildren are encouraged to play truant to bring even more emotion into play with “What about our futures” rallies. Demanding that Govts “do more” to make the bogeyman of Climate Change go away.
I struggle to know how Govts can stop volcanoes from erupting – and when the Iceland volcano threw off its lid in 2010, I read that it released as much pollution in one day as Sydney did in one year !! How do we (sensibly) do anything about that? That volcano went on for weeks – how many major cities should we close down for a year to counteract that pollution?
And, as we have earthquakes regularly, as tectonic plates shift, wouldn’t it make sense that there will be volcanoes erupting UNDER WATER too (unbeknown to us perhaps)? And what would that do to our oceans – maybe warm them somewhat? Well hello!! What can man do about these, seriously? How many more cities would we need to “shut down for a year” to offset the warming/pollution that arises from each of these events?
Now look, I certainly agree we need to do things to prevent pollution – like all those plastic bottles and bags that are currently choking marine life. That IS our problem, and we MUST fix that one. And we can do far better by keeping (and planting up) more trees – they give off oxygen, so that is goodness, even as they store carbon.
But the call to flee to sources of energy that are unreliable, costly, and are totally not viable if we are to keep a robust economy, instead of renewing our energy sources to use HELE coal, or Uranium, or even Thorium is beyond belief. Maybe in decades to come, the current “hot topics” (wind, solar, wave power) WILL be reliable and inexpensive – but that is not today. And I hear that even if Australia CLOSED RIGHT DOWN and the country generated NO emissions at all (turn out the lights and all leave!) the savings that were made from the cut in greenhouse gases would be totally negated within 6 months by China’s and India’s growth !!
So come on !! Let’s get real here. Our old people may yet die in huge numbers because of the current huge cost of electricity this coming Winter (thanks to the subsidies levied to cover the cost of solar, etc). Labor leaders talk of “renewables” (solar, wind, etc) being “the cheapest power around” – but if it is, tell that to South Australia! I’m sure they don’t believe it for a minute.
And even as Bill Shorten projects having 50% electric cars within 10 years, HOW will he provide all the extra Gigawatts needed? Surely not Solar or wind power – or we might be intermittently getting to work each day, depending on whether the day before was cloudy with no wind. Sheesh!
By demonising coal (as seems now to be happening), where will that leave Australia’s economy when its 2ND LARGEST EXPORT is axed? Don’t allow the Greens to gain seats in this election, please! How will all the school children who are today “demonstrating” about climate change end up when their parents suddenly don’t have a job, or when electricity costs grow even higher as ALL coal-fired power goes away. there might be enough solar power to let them charge their mobile phones, not much extra for anything else.
Think about it. Sure, we might need change – but let’s do it in a measured, orderly fashion, not in the heated rush that is “climate change alarmism” right now. Over time, let’s remove coal – sure. But replace it with something that is RELIABLE, just like coal is. Uranium, HELE coal, Thorium, or whatever is next.
Last words go to my newest mentor, Howard Thomas Brady:-
“It is hard to see a way forward in the climate debate due to the inextricable links that have been forged between so many disparate groups. It is rather like a thousand cats in the same room playing with a thousand balls of wool. It has got to the stage that a sharp global cooling, much like the Dalton Minimum between 1795 and 1820, may be needed to bring the foundations of modern climate science to its knees, and to disentangle those disparate groups caught up in the climate debate.
“To some extent we have been conned by our new awareness of the climate in polar and high altitude regions. In September 2015 President Obama had his photo taken near a retreating Alaskan glacier, and used this image to tell the world it is on the verge of catastrophic change. Obama did NOT tell the world that these polar regions have always been vulnerable to the slightest changes in climate, and always will be!
“In the past 40 years scientists thought that rising greenhouses gases provided a general guide through the climate maze. They were wrong. There are many competing forces behind climate. However, it is going to take some extraordinary events to change the present simplistic carbon dioxide global warming theories within the scientific community.
“The Fairy Tale called the Emperor’s New Clothes is very relevant. The defence of the role of greenhouse gases as the primary driver of the present global warming may become more strident but one day, someone or some event will make it clear that the emperor and all his rabid followers are stark naked, and the science community will suddenly nod in agreement and change sides so that climate edifice, built up over the last 40 years, will collapse. Then the charade will be over.”
Thank you for sharing that. They will fit into one of these two categories:-
… and I think I can guess which one ! My points 3 and 4 in that link were already coming true, and he wasn’t there long.
Seems you were too well-informed for his liking! Easier for them to find someone who can be “guided” into what they have to sell.
Yeah, about 8 years too late !! Reviving old posts to spam us is not appreciated, Dean. This “local cleaning service” just happens to be your own. No surprise there I guess, but obviously disingenuous, so I doubt anyone will be calling you.
Give us a break mate !!
That sounds pretty awful. One would hope someone could direct your steps if you talked to a Technical type within Telstra…..
But wait, I hear wireless can be just as quick these days – maybe look at the capability of receiving Internet via a Mobile phone at that place and forget the ADSL altogether. Especially as (once NBN comes along) you will be forced to “give up” the ADSL anyway.
Wireless Mobile could be the answer to BOTH problems. But I am not a techy, so if others can add thoughts for Aljo, please do,
I appreciated his work so much that I immediately shelled out a few dollars to purchase his book, titled “Mirrors and Mazes”. I can’t wait for it to arrive.
Woohoo – it’s here !! And now that I am able, let me state a few more thoughts from this book that might turn a few hypothesese on their heads – like this one:-
“For those who talk about present temperatures being ‘unprecedented’, geological history shows that for 80% of our Earth’s history there have been NO ice sheets at the Poles. Indeed Mother Earth has normally been at least 3 to 5 degrees warmer, and plants and animals have happily lived and evolved in those hotter conditions.”
“The world has warmed over the last 300 years, yet not as much as various warm periods in the last 8000 years. More of our modern thermometer temperature readings may be broken, but such records only go back 150 years!”
One section of Chapter 1 – “The Climate Debate” is titled “Solutions before Answers” where he talks of over-spending on as yet untried solutions that cost billions :-
“In the fervent rush to reduce greenhouse gases, many countries have installed large-scale solar plants and wind farms that require large subsidies or tax credits to justify some return of capital. In Spain the economy was not robust enough to fund these subsidies that became a significant component of its ballooning National Debt.”
And just one more quote that shouted at me in a quick read through Chapter 1
“Carbon Dioxide levels rose about 11% between 1975 and 1998 while temperatures were also increasing. However, Carbon Dioxide levels rose another 9% between 1998 and 2017 while temperatures did NOT increase. So, how can rising carbon dioxide be the main driver?”
Dear reader, are these questions and comments of interest to you? I don’t wish to simply add to a store of website information if it is of no interest to others, so I’ll hold back now to see if there are any reader reactions before continuing. Meanwhile I will enjoy reading the whole book.
* All quotes from “Mirrors and Mazes” by Howard Thomas Brady – “A guide through the Climate Change debate”
Absolutely with you re “Caring for the environment” Jason. I’m sure we can be doing lots better in that regard too – i.e. don’t clear timbered areas to build homes. Leave the trees there and build homes where there are no (or few) trees. Don’t be in a rush to knock down old homes – the wood therein has captured a bunch of carbon, so fix it up if possible. And wood has very good insulating properties to keep the interior warm in Winter and cool in Summer.
I’m looking forward to the day when I drive my electric car with solar power absorbing paint. The future is bright – pardon the pun :)
I’m appreciating the imagery !! Why not, eh?
Back to my earlier comment of mine:-
it sounds like I am asking more questions than I am answering, but that is purely to start you thinking around the whole subject, rather than just concentrating on “do I sell this or not”? There are many good reasons why you should and/or shouldn’t. Becoming more aware of ALL your available options is a good option at this time.
While responding to your most recent question, I thought more about one of your comments – this one:-
I think I was looking for a simple advise whether I should buy in where I want to live or not. rents probably cheaper like $500-600 for a standard house and owning a house costs a bit more for sure.
What came back to me today was a very early learning point for me – and that came out of a forum debate about “Do I hold my old PPOR as a rental, or do I sell it and buy a new one?”
Now, as I referred to earlier, there are a HOST of other questions/comments/learnings linked to that very simple question of yours. One MAJOR point was this one:-
Where one is thinking of retaining their old home as a rental, there is one point that should be fully explored before making a decision. It involves taxation deductions and the like. Goes something like this:-
1. If you are buying a new home, any loans you take out are not deductible. Even if you take a loan against the old home (which might have a heap of equity in it) that you are making into a rental, it doesn’t matter as the REASON for the loan is to shelter YOU, not the tenant.
2. Carrying on from 1 then, any NEW loans against your old home are only Tax deductible if the loan is for investment purposes (e.g. borrow against old home to buy ANOTHER investment property).
3. One problem with turning your old home into a rental is that, in many cases, any mortgages have been paid down over some years, thus the remaining mortgage might be quite small (e.g. a house worth $600k today might have just a $120k mortgage against it – so $120k is a Tax deductible amount once the property is rented).
4. That is fine if you are wanting to have the property highly positive geared (nothing wrong in that at all) but then, you MIGHT be better off to sell your old home outright, claim the full CGT exemption and keep ALL of the equity to put against the new place, THEN borrow against the new place for other investments if you want.
SBH, there is so much more to this too (you KNEW there would be, right?) that I can only suggest you find a great adviser who can run through all of your options with you. You will find some right here, but then, you might have someone over there who can answer specific question s and can guide your steps.
Do come back here with any other questions too – we all learn by reading and learning from others like Steve and Jason, and a host of professional people who frequent these boards (see their signatures). Not me – I come up with a few thoughts from time to time, but have no qualifications that make me a professional, as such, do check all I say with your own advisers.
I hope the above thought helps somewhat. In closing, this topic might have some good thoughts around your question:-
Check out the forum called “Heads Up” where we discuss things like meetings – here’s the link:-
To find it at any time, click on “Forum” (top centre-right of any page) and scroll down to the Community section where you will find “Heads Up” along with other community types of forums.
Looking through the list of topics, I note that Melbourne and Brisbane/Gold Coast meetings are pretty active, with only occasional entries for Perth and other places. Of course, YOU can start a topic in there, asking for others in the Perth area if they would like to meet up. It is a really good way to learn heaps quickly.
- This reply was modified 1 year, 2 months ago by Benny.
Landlord Insurance perhaps? Of course, you might be thinking of some kind of Body Corp Insurance (i.e. to insure the common areas as well as the individual units).
I am quite unfamiliar as I’ve only ever owned private homes – perhaps someone else can come up with a better answer….
Re the “Rentvesting”, you might want to use the Search feature (click on Forums, then “Search”). One result I found from doing that led to this topic:-
That might prove useful to you.
You also ask this:-
Is there a benefit in the long run to own a house in this area?
… but you don’t mention what area you are renting in (even though I can’t help you with Perth areas, others might – but they would need a suburb name).
Hope that helps somewhat,
- This reply was modified 1 year, 2 months ago by Benny. Reason: Correction - poster lives in Perth, not Melbourne
Technically buying a new house is not “adding” to the number of homes available.
It may be a matter of semantics – but to me, if there are (say) 600,000 rental homes in Australia, a builder builds a house, and I buy it as an investor and make it available to rent, then there are now 600,001 homes available for rent. If someone else bought it as their own home, then there is no nett gain in rental homes available. But you are right – the other aspect is this…. If I buy a second-hand home to make it a rental, then the available rental numbers again go up by 1. But there are no EXTRA homes in Australia – owner occupiers now have -1 and rentals have +1. Is that what they don’t like? I dunno !!
…. nobody will want to buy from them because by then those are considered as second hand housing and whoever buys from them can’t negatively gear.
BINGO !! And therein is where many of us see a major problem with the Labor plan to allow neg gearing only for new homes. For those already owning investment homes, it appears that Labor are thinking to allow neg gearing to continue IF it is already in place.
This will likely lead to more market distortions – i.e. investors might rush to “fill up” on investment properties ahead of the election, perhaps lifting values temporarily – with the fall in value to come after….. As I said, it sounds like 1986 over again – and that hurt investors and renters !!!
Good question – I think Labor’s intent is to only reward those investors who are ADDING to the number of homes available. Buying second-hand doesn’t increase the total number of houses, so no “bonus” for these investors.
But, as Steve had mentioned in an earlier article – “We really need to wait to see just what Labor proposes once they actually hold power” at which time we will be able to answer a heap more questions with some kind of certainty. For now, it is all conjecture,
I can’t make any comment on the Perth market as I live on the East side of Australia. However, it is good you are asking before “doing” as there are a number of things you should check out before you make your next move.
First off, there are Tax benefits in selling your first home before buying another (and it might mean you can offer cash for your next home, thus allowing bargaining of a lower price perhaps). On the flip side though, there are also Tax benefits in providing rental accommodation for others by keeping your current home as a rental and buying another. Your income appears to be sufficient to be able to buy a further property (and not sell your first home), depending on your current expenses of course. A Mortgage Broker could help you more on that though, as the lending climate has changed markedly since the Royal Commission into Financial Institutions.
Further to this are other thoughts – like, are property values in Perth likely to appreciate in the medium- to long-term? If so, would you want to hold two properties instead of one over that time, thus building up your Equity? The risk there is that values might stay low, and keep your finances locked into two assets that aren’t growing. Also, it could be your money might be better used elsewhere. Is your spare cashflow sufficient to cover all costs during that period? Then again, if you sell now and buy again soon, the Equity you have in your current home is then “all yours” with no Tax payable, allowing you to buy another in the same climate, thus not losing out on any growth that might occur in future markets. But if there is growth, holding two would be better than one, yes?
Whew !! Sounds like a circular argument, eh? ;)
Sorry SBH – it sounds like I am asking more questions than I am answering, but that is purely to start you thinking around the whole subject, rather than just concentrating on “do I sell this or not”? There are many good reasons why you should and/or shouldn’t. Becoming more aware of ALL your available options is a good option at this time.
Well, I missed the Dec 2018 “anniversary” to update this (would have been 10 years). So here we are in Mar 2019, and we are seeing a price correction in play currently. Syd and Mel have had their values settle back somewhat from their recent highs. All to be expected. Pundits right now are stating “We will see a 20% drop before the trend changes back to positive” (Referring to Syd & Mel). Other areas are stagnant or dropping slightly. Recent articles call a 13% drop since last peak for Syd, and about 9% for Mel.
We are in unusual times right now though – with a Federal Election imminent and the Labor Party in the ascendant (according to Polls). Meanwhile, Labor have stated that they will forgo Negative Gearing on all but new properties (1986 anyone?). As well as that, they want to bring in Death Taxes and also remove Franking Credits. With those kinds of policies, I would have thought the Liberals should steam back in again – BUT they are instead imploding with the recent antics of their more left-leaning members. So all bets are off re who will win !! And, depending who does, will (I believe) provide markedly different paths for property investors and investing over the next few years!!
So, will house prices fall further (as Scamp had predicted over 10 years ago)? Like, 40% or even 50%? I see a possible larger fall should Labor win Govt in the next few weeks. But still not 40% nor even close. Perhaps the 20% that others have predicted recently. And if Libs get back in, less likely !
What do YOU think though, friend? Does Scamp have a point? Or is he still licking his wounds from selling off what has been a strongly rising asset over the last 10 years despite his assertions?