[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 25, 2011 - 4:51 am

I love the fact that this  doom and gloom thread started way back in 2006. I may have missed something, but I didn't witness a collapse of any description in our local property markets in that time. A few specualtive areas have gone down, so has the high end of town, but that was always going to happen. Dunno, maybe I am blind.

Yes, Yes, I know the 2011 situation is different to 2010,2009,2008,2007 and 2006.

On a related tangent;
I recently went back to some "hotspot" predictions in API from Feb 2009 to see how the hotspots faired up until the latest figures. From what I can see, 70% of them grew at around 4.5-5% p.a. based on median house price comparisons. 10% grew at around 7.5% p.a. and 10% fell less than 2-3% p.a.
Out of interest, I randomly compared suburbs out of the indexes at the back  of the API over the same time period and found almost identical figures.

For the record, I am perfectly happy if my property portfolio grows at 5% p.a. As long as I can keep an 80% LVR and sustainable cashflow while I wait for the occasional, largely unpredictable 8%+ growth spurts that push me along faster. Super bonus points if I get the occasional random 10%+ boom.

I feel sorry for those folks that cite bank interest rates of 6.5% as a comparison to annual growth of 5% in property. I ain't gonna try explaining it to people that have already made their minds up. And vice versa, of course.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 21, 2011 - 8:34 am

Explain to me what happens when the USA does default on its loans. Exactly what are the implications of this?

I am not talking about the Gold, silver and commodities go up implications. I am asking about the deep political, military, cultural, aid and economic tentacles that the USA has embedded throughout the globe. How will any of these change? Because of these deep interdependencies, the USA differs from all of the previous national hyperinflation examples given in that article.

If the US dollar crashes to ridiculously low levels, won't their manufacturing base become much cheaper? Many Aussies are already buying US goods and having them shipped to their doors because the prices are so darn cheap.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 21, 2011 - 8:18 am

As a repeat customer of BMT, I was quoted a similar $1500 + GST figure for 3 villas on one title. 2 of the villas were absolutely identical and the third was the same with an extra garage. The original quote they gave me was over $2200 before I mentioned the words "competition" and "shop around".

I shopped the quote around and consistently got cheaper (and faster) from some other companies – DEPPRO and The Depreciator were a couple that come to mind.

I eventually went with DEPPRO for ~$950. Report was doen within 2 weeks with minimal fuss and the quality was almost as good as the BMT one I had done previously.

VERY disappointed with BMT. They treated me like an uninformed idiot. I am most certainly not uninformed, albeit I may be an idiot

Pays to shop around.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 16, 2011 - 2:08 am

Propertyboy,
 a few questions if I may? I am Strata Titling some units right now and have come across similar queries.

 Who did you use for your Residential Strata insurance Certificate of insurance?

 Did you shop around for this and see much variation in policy and price?

 Was this organised through your Strata Manager? If so, did they give you a package price or discount on their services for organising the

 Who are you using for your Strata Manager?

Feel free to PM me if you would prefer to keep this private.

Thanks,
EV

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 12, 2011 - 9:41 pm

FYI – Vero and Terri Scheer are Suncorp brands. As is AAMI and a whole bunch of others. That said, they have different policies, terms, sales and support teams.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 12, 2011 - 7:04 am

Hi there,
 yes, I have progressed this and close to pulling the trigger after I re-balance some finances. After much research the breakdown is as follows;

1st thing – Yes, the owners corporation is mandatory. Even for 2 villas like yours.

1. Surveyor – Measurements, submission of strata plan subdivision to NSW LPMA ~$2200-3500 + GST (Get quotes from about 5 surveyors. I found that their fees vary wildly. Some of them are blatantly gouging and need a lesson in negotiation. MY first step is to introduce competition)
2. Private Certifier – Complying Development Certificate – $400 + GST (If you have an existing complying DA, you may be able to bypass council approval again. Essentially this saves time in my case, council are currently estimating 4 months for turnaround of DA's. The private certifier can do it in 24 hours once I get my paperwork together.)
3. Private Certifier – Issue Strata Certificate ~$600 + GST
4. LPMA Lodgement – Est. $4000. The LPMA has a schedule of fees that you can look at, I will post this below. The surveyors I engaged gave me some rough estimates around $4000. For your 2 units, it should be less, maybe $2000-$3000.
5. Council DA approval – In my case I didn't need it, but they did quote me approx $500 when I queried.
6. Strata Manager – to handle setting up the by-laws, helping to arrange Owners Corp setup and otherwise usher me through the process. Approx $750 for the Rolls Royce service. You could shave a couple of hundred off this if you wanted.
7. Bank – Asses and issue new titles, loan re-config – $350
8. Solicitor – I don't know yet, I have budgeted $1000 to be safe.
9. Owners Corporation Insurance – Don't know, I need to get a quote for this, you just reminded me.

I estimate around $9000-11,000 all up for me. I should be able to re-value for an extra $60,000-$90,000 at least. So I reckon it is totally worth it. Essentially buys me another investment property.

Now, this assumes that I don't need to do any additional works to make the subdivision compliant with the existing DA. e.g. Water Corporation certificate, Electricity metering, Fences, Environmental compliance etc.

Some useful links;
http://rgdirections.lands.nsw.gov.au/strata_schemes/components_of_the_plan
http://www.strataman.com.au/ – I spoke with Margaret from strataman. She was very professional and took the time to explain the setup and ongoing management.
http://www.nswstrata.com.au/ – Also gave me some good insight for setup and ongoing management.

Hope this helps you. Feel free to ask anything else and I will try to help.

EV

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 11, 2011 - 1:39 am

Fair dinkum, some of you folks have lots of money. $610k median house price!

What sort of buy were you thinking? Unit, House, Renovate?

Keen to understand what sort of strategy you have investing in an area like this. Mainly because it is the opposite of anything I think about. The holding costs must be very high and the yield super low, so your Capital Growth Crystal Ball must be pretty darn good!

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 10, 2011 - 11:21 pm

An interesting take. Thanks for sharing

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 10, 2011 - 11:19 pm

I use Suncorp and Calliden (through a broker).

Haven't had to claim on either, which I reckon is the real test of quality and customer experience.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 7, 2011 - 10:32 pm

fWord wrote:

emptyvessel wrote:

Seems to be some very angry people out there that hate property investors. They think we are all rich land barons crushing the will of our poor "serfs" through our unbridled greed. Angry little people.

Well I've read this many times before: it is investors that drive up rents and homebuyers/ owner-occupiers drive up house prices. Then there are a number of people that also say they've not had a rent rise in yonks. The corollary of all this is: both renters and their landlords are hurting…well, owner-occupiers are too, but it is actually owner-occupiers that compete with renters and are their greatest enemy, driving up home prices and preventing would be FHB from getting a foot in the door.

It's easy for renters to fall into the perception that they are servants and paying the mortgage for their landlord. The truth is that it's a partnership. Landlord and renter both have a role to play. Landlord provides the housing, renter pays 'boarding fees'. I've also read this before somewhere: to earn a million dollars, you have to provide a million dollars worth of services. It is the landlord's responsibility to provide a service to renters, and boy do I know it.

When bees invade the roof, I respond to my tenant's calls and get pest people out. When a big tree branch falls, I respond, get quotes to get it removed, or apply for a permit to get the whole tree removed. When I know the carport might be rotting and potentially unsafe, I respond and get it repaired. Carpet is breaking down and floorboards rotting? I respond again and get it fixed up. A responsible landlord is precisely this: to respond to the needs of tenants.

So tell us, who is the real servant? No, there is no servant at all in this relationship. It is a partnership.

Hell yeah! *Claps*

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 7, 2011 - 10:21 pm

Bump – No recommendations?

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 11:40 am

Thanks for the offer. I will drop you a line tommorrow for a chat.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 11:36 am

Darn confusing. Thanks for helping me bounce some ideas around.

I tried reading some of Chris's post, but about 95% of it went way over my head. I went on and read about the Land Tax Trusts they use and everything seems tied up with an SMSF transition strategy. I am not comfortable with my super being in property as well. I have been trying to keep Super as equities and outside super as property. But I guess once it gets big enough I can have both. More to consider! The complexity keeps piling up.

And for some reason I can't access somersoft, keeps timing out. Will try again later.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 11:03 am

What if I gift it to the trust?

Unit trust initially. Me as income unit holder. Mrs and kids (or family trust) as capital unit holders. Unit trust borrows using the equity I gifted. I pay the interest payments, thus any negative shortfall I can claim as negative gearing. Then after a few years, as the property goes neutral to positive geared, it transfers to being a discretionary trust over a period of time.

Although I am not sure what I do about accessing the extra equity within the trust for future purchases.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 10:50 am

Interesting.

Could I just keep the current properties in my name and just extract the equity to fund the purchases inside the trust going forward?

That way, anyone wishing to sue me as an individual would see that I owe far more money than I have in equity. Thus negating the benefits of chasing me.

This is why I need a top notch accountant that has time to work with me. I haven't got time to become an expert on this stuff without holding back my investments until I am.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 9:34 am

Thanks Terry.

You mention that "setting up a trust later is too late."

Well, it is too late for me. But I read all sorts stuff, like that from Chris Batten's team, that says I can significantly benefit from a trust going forward.

Can I redirect all my individual-owned property and put it into a unit trust that later converts into a discretionary trust? And use this vehicle going forward as my main investment and asset protection?

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 5, 2011 - 8:59 am

Nice one Anthony.

Can you please add a commentary on the use of the right investment structures? I am continuing to get massively conflicting advice from experts on the use of trusts.

FYI – I am an active equities and property investor with 4 IP's (well, 2 becoming 4 after a strata title)

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 3, 2011 - 11:57 pm

DetroitDan9 wrote:

NaughtyJ, LOL I had to laugh at your post. People can spend way too much time reading articles and less time actually doing it themselves. The best way to learn is to jump in, instead of having paralysis by analysis! I often see this with a lot of people who "want to invest in the US" they want to get involved, but have to read some more articles to feel fully confident! It either makes sense to you or not, reading 100 articles will not influence that

I respectfully disagree with this. Some of us just choose to do more deep analysis than others. For me, I have done deep analysis on every investment I have ever made and I keep making money as a result. Could I have made more by doing less? Nobody will ever know.

I do, however, agree with your intent. At some point in your analysis you do need to decide "go no-go" or just move on to the next opportunity. Not making this decision can result in a "lazy balance sheet" that simply gets eroded by inflation and never gets the upside of any opportunities.

I also agree that the article was a particularly negative view. It is the classic example of investors not doing solid analysis before taking the leap.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 3, 2011 - 11:45 pm

Yeah, I saw a heated debate on another forum about this. Some folks presented reasonable evidence to suggest that there actually wasn't a shortage and there wasn't a real rise in rents.

Seems to be some very angry people out there that hate property investors. They think we are all rich land barons crushing the will of our poor "serfs" through our unbridled greed. Angry little people.

[emptyvesselMember@emptyvesselJoin Date: 2008Post Count: 170]

June 3, 2011 - 11:35 pm

Thought about selling the PPOR and renting same or better in the same area? Probably for a lower per-week out of pocket. No CGT, you clear the non-deductible debt, possibly the boat as well.

If the IP's are in your wife's name, as you say. Perhaps she stops or cuts back on work? It all depends on why she is working. i.e. If it is for career and enjoyment, well, all is good. If she is working to pay bills, then she is wasting her time. May as well just live of the rental income and your wage.

Given so much equity in those IP's, I would be using it to buy more property. It is a buyers market in many regions and you could set yourself up nicely for an early retirement. Talk to Terry about some structures and you are home free!

Seriously consider selling the PPOR before the IP's.