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Site Survey will cost you about $250 and several companies in Perth can do it for that price, usually within a couple of days. Demolition is dependant on the house and should be quoted individually.
Wayne you got it in one ! As for covenants, they have all just been lifted which is a bonus. The main downfall appears to be that if I want to sell, I cant put up a For Sale Sign on site. Are you going to give it a go ?
By the sound of it we may be neighbours ! The land is definately unique and capital growth has been very good in area. As for where it is, lets just say its about 35minutes north of perth. And yours ?
Im from Perth and looking at purchasing in the Northern corridor on the coast, literally a 30 second walk to waters edge. As properties directly next door are selling for half a million, I dont want to miss out on this gem yet cant build for a year or two. Main concern is paying off the Block which in turn is reducing my payments on my mortgage.
The other thing I am taking in to account is worst case scenario. If I was to sell block further down the track would need to sell for around $23000 more than purchase price to cover $15000 fees /set up costs and approx $8000 agents fees (I think)! to sell. Not even taking into account loan repayments.
As for CGT I will move in for 12 months (if not longer) then if i decide to sell there is no CGT as it is principal place of residence. Then can move back to my other house. Other wise you pay CGT on half your profit and the other half of the profit goes on to your taxable income. (I am not accountant but think thats how it works ?!)
Be interested to hear about your proposal and where you are from or anyone else who has done similar.
Thanks for your time…Decisions…Decisions…
Still paying off mortgage and got commercial property on I.O (Positive geared). No funds after buying block to build now as used up equity in home. Need to save to build and hope by time I build block and my house I live in will increase and will have more equity + savings. Other option is to sell my house but it is in a booming area and has alredy doubled in 3.5 years, hence dont really want to sell it, espescially as I built it. Plan to move into the house I build for a year to avoid capital gains when built. ??
Any one got any ideas on the Wharf Development in Mindarie keys ?? To buy and build and sell later ??
Thanks for the advice, I will definately look into it as I have been thinking along similar lines. It would make it a lot easier to calculate but as I needed to use my equity, im not sure if I can split it. I Will have to speak to my broker.
The tenants have been in for a year now so there are 4 years left before there option to continue comes up.. The building was only completed a year ago also. Guess I will just now have to wait and see.
Thanks for your reply Mel
A level site is also feasible as access ramps at a max grade of 1:14 can use up a lot of area if on a sloping site. Design for the disabled/elderly can be rather extensive and costly. As mentioned above, laws and restrictions will be in depth and you will spend a lot of time dealing with council and other government bodies. There are a lot of lifestyle villages around me for the over 40’s which are also booming which provide many social activities along with security !
Commercial Property is really only as good as your tenant. As mentioned in the other forum, vacancy rates can be high and may last for months or even years if you lose a good tenant and you can be left with a fitout that may not suit the new tenants. Location, exposure and demand for Commercial Property should also be high.A good aspect of Commercial property however is that the tenant pays for all outgoings and repairs.
Thanks Jeff. I agree with not comparing residential growth rates with Commercial properties however it is still interesting and I would think that to to some degree would give an indication of demand for the area. As it wasnt purchased for capital growth and hope to keep this property for many years, it would just be a bonus if it went up in value. The disappointing thing I just found however was that the yearly CPI increase wasnt very much this year at a figure of 1.6% and was hoping for about 2.5% to 3% upwards. Any increase is better than none i suppose.
With your calcs, even though I am paying off the $50,000 with my P&I loan (mortgage), wouldnt there be some of that $350 pcm that should be taken out(allocated) to cover the interest on the Home loan to get a true cash return ?.Thanks for your reply.The property is in a very good location and I really cant see a problem with it ever being vacant however you just cant tell! I have clauses in the lease agreement which means that the tenant pays the lease until i find new tenants if they break lease.
The area has gone up 33% in the last year which is promising ! I agree with your theory of paying off some of the principal aswell as the interest and the way the loan is structured I am forced to pay $8500 of the principal. The $50,000 i borrowed in equity has gone in with my home loan which I am Paying P&I on.
Is this property cash flow positive? Its hard to work out as some of the loan is P&I on my home loan and some Interest only ??
Birdy
Thanks kindly for your reply but can you also please tell me what my return is ??
Regards,
Birdy
