Forum Replies Created
7% is a recommended rate from most of the State real estate bodies. Unless there is something exceptional, 9% seems high.
James
7% is a recommended rate from most of the State real estate bodies. Unless there is something exceptional, 9% seems high.
James
Rumour has it that they were in the South Melbourne McDonalds…Oh sorry, that was Elvis!
James
On the contrary, I do have compassion for those people who only had their own and family’s best interests at heart. Unfortunately they did not have a network of family/friends which questioned, probed and debated what they were doing.
James
Kay,
I think you may be too generous to those people..calling what they did as a strategy…Many I believe were novices who probably always wanted to get into property, were attracted to the promise of a quick fortune, and romanced by a very good salesman.James
My only point was that a depreciating currency tends to suggest lower buying power relative to the rest of the world. Sometimes as a response to relatively higher inflation, reducing the worth of the local cuerrncy.
The extreme example was Argentina in the 80’s, where inflation wsas rampant and the currency worthless. So having a million pesos didn’t equate to a million dollars.
However, I look forward to the day, where I have a million dollars in equity…even if they are Australian!!
James
Not directly…but I am still waiting for the sky to fall in!
James
Well, I have another one for you……..
Think of a number between 1 & 10.
Double it….
Add it to itself…..
Choose the corresponding number in the alphabet….
ie 26 = Z 1= AThink of a country beginning with that letter….
With the second letter of that country, choose an animal starting with that letter.
By my powers of deduction, you are thinking of…………………………………………….
ELEPHANT IN DENMARK
James
I agree with you Neil. Of course, if we were discussing this 18 months ago, that $1.32m, would have been closer to $2m
James
Mel,
Given such a relatively short period of time since you purchased the property, if I was in your position (and of course I am not, nor do I know of your circumstances, however…), i would be reluctant to sell as a result of all selling costs and then buying costs associated with next IP, for the ultimate result of having still, only 1 IP.
I would ensure if it is negatively geared to capture all tax benefits in the interim ie depreciation etc. Keep saving and revalue property around Oct 04. Use that equity & other savings if you can to purchase next IP.
Advantage here is that you retain
1. Current IP
2. Current tax benefits
3. Don’t dispose of capital appreciating asset
4. Allow yourself to be in a position for 2nd IPI suspect it may take a while to find your +ve cash flow property (?), so why not maximise the benfits that your current IP will give you.
Ultimately, it is time in the market that is the key to long-term growth.
James
Peter,
Just a comment on a couple saving $50k for a deposit as you mentioned. If you assume that property doubles every 10 years on average, then they are still $25k short after 5 years.James
Ginamarree, thanks. Have you used them personally?
James
YES
James
Pisces,
I ordered the valuation. After seeing comps and getting agent valuations in the area, I thought it wise to confirm those with a SW. Thought if I had this, it would add to the evidence I plan to present at the time of settlement. However, the SW was not from the bank’s valuer.James
Corrine,
If you do a search on ‘wild wealthy women’ on this site, you will see plenty of discussion regarding the program.You might have just missed the last one, which was only a few days ago.
James
Native Metal,
Much of the country have experienced property price increases at above long term growth rates. There are many opinions as to what is going to happen next. However, like most investments, property investment must for the long term. Like the sharemarket crash of 1987, any long term graph shows that this was a small reduction in the scheme of things, however at the time, the sky was falling in. Similar to the early 90’s property market prices. Whilst in the moment, it is hard to see past the doom or indeed the reverse had probably applied in the last few years.Property is not the same across the country, suburb or street for that matter. Understand the demographics, population shifts, development (infrastructure) in the area you are examining, historical price movements, comparable sales. Talk to real estate agents, buyer advocates, bankers, valuers.
Patience is a virtue, don’t think you need to act just because it seems like a good idea. Let your research and the numbers guide you.
In the past three months I have purchased two properties (one in Melbourne & on Gold Coast). The Melbourne property, was the day after the Henry Kaye saga, and the Gold coast property was a day after the second interest rate rise. I guess I could have waited, but the deals’ numbers stacked up. I understood the current risks and have sought to minimise through various means, insurance, buffer in LOC etc.
James
Damon,
Given that your broker earns his money through ‘selling’ managed investment schemes & shares etc, he sees a nice little earner from the proceeds of your IP. If he has advice to give, pay him for his time. Not a commission based on his advice to put you into shares.James
Tax depreciation schedules are provided by quantity surveyors. You are entitled to tax deductions up to 40 years on various items, with regard to building & depreciation allowances. For example, things like dishwashers, cabinetry, carpet, window furnishings, air-conditioning units etc. I have recently undertaken this for one of my IP and this has provided me with another $7500 of tax deductions for the year, reducing every year for 40 years. http://www.aqis.com.au confirms all registered QS in your location.The cost of these reports are approx $600 plus GST (tax deductible as well!)
A tax variation allows you to vary your PAYG tax payments according to the amount of deductions your property is entitled to. Your accountant should do this for you (easiest way). Essentially after submitting the tax variation request, once approved by the ATO, they send a leter to your employer asking them to vary ie reduce your tax payments in
your pay. Instead of doing the claim once a year at tax time, you get the cash flow benefit of reduced tax each pay day. For example if your total tax deductions are $10,000 and you are on the top marginal tax rate, this equates to a tax reduction of about $93 per week. (10000 * 0.485/52). The best use of these additional funds is to put it in an offset account so as to reduce interest payable on your loan.
Hope this helps.James
Thanks Shushar.
James
A good working relationship with a PM is as good as investment as great tenants and good sales agent contacts. Give the current people the flick and find someone, who will give you the information, insight for future purchases. Know your longer term vision with regard to IP and let them know. All PM’s and sales agents in my experience respond well to this approach. In my opinion, 3, 5, 7% or whatever commission you are charged, is a small price to pay.
James
