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I genuinely do not believe that there necessarily is a binary inner suburb high CG lower rent / outer (slummy) CF low CG system in all markets in Australia. There are many outer suburbs which have consistently outperformed in % CG terms whilst offering higher rental yields. Especially where inner suburb living is well and truly matured in most capital city markets, the medians have already dramatically increased, whereas outer areas are becoming reliant for 2nd/3rd home buyers.
In any case, for an initial purchase having capital growth is one of the most useful attributes the property could yield, as it will enable future purchases easier. Look at areas which are gentrifying/socio-economic conditions changing and the median prices will no doubt experience long term uplift.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
7%+ yields in Adelaide are easy, you'll just be buying up old housing trust stock. Playford council will fit your needs.
Alternatively for a slightly lower yield in the 6's you can get in around Hackham, which some may argue is slightly less 'feral'.
I've been purchasing Adelaide properties at 8-9% yields personally.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I'm not sure there is a single website for this. I generally work off the council site for the relevant area + generally there is a State plan for the next x years showing the vision of how the city is moving forward.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
If it's for your own property to live in, tiles for wet and high traffic areas with carpet in living and bedrooms are a good combination.
Floating floors can be OK, but they can potentially have longer term issues.
I still believe the best flooring around is solid timber floors, but outside of older builds they are far and few between.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I've seen this work a number of ways, including direct talks to developers, however that can be a length drawn out process which may not achieve any greater outcomes.
Side by sides are frequently being advertised through normal real estate agencies, who advertise the two properties as a development potential deal. You may find that you can achieve a premium price and timely settlement going down this path.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Generally the main concerns with commercial IP's are that:
- They can sit vacant indefinitely
- Capital growth is not generally consistant, some properties wind back whilst others are sluggish. Quite different from the residential market.
- Higher deposit requirements and different lending with regards to rates, products, loan terms etc
In saying that, I've seen some great deals purchased, so long as the fundamentals are strong, long leases in place with favourable terms for the landlord, it's well worth the consideration.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Also Cheryl, it's wise to take what the real estate agent says with a grain of salt. After all they are legally required to work on behalf of the vendor and pursue their interests, not yours! The property may indeed be worth 300k after a reno, but it's best to verify this by looking at the sales prices of renovated properties in the area to see if the numbers stack up.
I provide clients with residex reports for investment properties that they are interested in. One of the best features of these reports are the past sales data for the area, which is useful for comparing prices (and potential prices post reno, like in your situation). Have a chat with your banker/broker, they may offer this service.
On pricing, if you have a bit of nouse and the skill set, you should be able to keep well within your <25k estimated budget.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
I do know of a few brokerages which charge a fee for service like you've mentioned.
Other fee's a broker may charge can include a fee for service if the loan amount is below a certain amount (ie, $100k), or clawback provisions (if the loan is discharged in less than two years, the brokers commission may be charged to the client).
The most important thing to do is to find a broker you can trust and engage with – as well as one which helps you achieve your goals than drag behind.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Generally everyone hits the Valex clearing house, however this is only if a kerbside or full val required. For most deals sub 90% ANZ will use APM. As it's not a very robust engine, a below median val property can receive quite generous val's with the modelled estimates. Likewise higher median properties can suffer, but there is a dispute process which will upgrade the valuation to kerbside/full val if it's distorted enough.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Interest only and Offset sounds like it will help you out a lot in this situation. Put any extra funds into offset to maintain the maximum deductibility should you make it an investment property.
I've had quite a number of separation deals in the last 12 months, overall the majority of deals results in one partner buying out the other. The selling and buying costs eat up a substantial part of the equity left, so it generally makes sense.
Outside of the financial sense, it sounds like you're taking this from a practical perspective, giving yourself time to look at your options as life progresses. Keep up the good work.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
+1 for better to aim to remove stamp duty. That will dramatically reduce the deposit requirements for First Home Buyers entering the marketplace, and allow more fluid transactions of property with less cost barriers.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Whyalla and Port Lincoln have been stomping grounds for investors for a reasonable while. Prices fluctuate quite rapidly, particularly when mining announcements have been made. I've known investors to double their property values in 4 years, and others lose 20%. It has it's risks, which outweigh the benefits for me TBH.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Not the best product, but it's a useful niche. As mentioned previously in the thread, the 20k credit card would be used to bridge the gap in covering some/all your govt charges and allow a larger amount of your deposit funds to go against the property.
The product is useful if you don't have a sufficient deposit to cover a min of 95% including govt. charges, but it in any other case it can be an expensive option for small benefit.
5% genuine savings generally req'd by all lenders, however a number of them will allow non gen up to 90%, and some will do 95% borrowed funds for deposit at a loaded interest rate.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Hey Mikal, did the Dip through NFI, pretty straight forward.
IMHO the study is not that useful and or relevant to the industry and providing a good service.
If you want to have a chat about joining the industry and what it's like, feel free to let me know. I'm based in the CBD.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Another vote for Depreciator, they do a fantastic job.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Not all lenders will do 95% for construction IP but there are a decent number of lenders which do, not much of an issue if you fit credit scoring models.
Where in Western Vic are you looking to build?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Alternatively you can use "Deceased", "Public Trustee" "Mortgagee" "Bank in Possession" etc as key word terms within re.com.au/domain.
Same when looking for fire damaged properties.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Sounds like you're in a great position early on.
Looking at your situation:
- Access to significant amount of equity
- Don't have current mortgage/rent repayments
- Qualifications related to renovating
Accessing the equity on the property for deposit funds (and possibly renovation funds) means you do have the potential for your brother and yourself to purchase several properties (seperately or together) and have funds to renovate if you want to go down this pathway. This is subject to serviceability (income, liabilities etc), however if you're currently living in an unencumbered property that is helpful with this respect.
You have all the groundwork in place to start a substantial portfolio, I would suggest increasing your knowledge in property investment, read, go to property investor meet ups if you can. The knowledge out there is immense. Also build yourself a strong team of professionals (accountant, solicitor/conveyancer, broker, Property managers etc) who can help you achieve your goals and provide greater options.
What State do you live in BTW?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
RPI, is that an area you delve in?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
BTW Wilkie, earning over 80k/pa isn't 48% tax rate, it's 37%+medicare… Not as bad as you think.
If I was to look interstate right now, I'd be looking into Brisbane.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
