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A little bit concerned about the sub $550k part of the market, but anything over about $850k seems to have value.
Would buy anything at the moment for the right price
Hi Graham,
Congrats on the decision to get into it. As far as advice is concerned, you can't do much better than spending some time on this forum reading the various threads – it's a wealth of knowledge, and most of it from people are are doing it and who are good at it.
Actually, now you think of it, you could compile a pretty big book from all the ideas on the website. Anyone game?
FS
There is nothing worse than making the wrong decision and being stuck with it for a long time, however that is what can happen if you get a property purchase wrong. If you would like to pass on some details about the property and what is going on, I might be able to give you a hand. I've sent you an email, additionally, you can visit out website and fill in the contact form should you like.
FS
Hey there,
It sounds like you are starting to get a good idea of what it is that you want. I know a few people that I personally and professionally trust who might be able to help. At least a good chat on the phone with them may provide you with either insight, comfort or maybe even a solution. We review the trust deeds of accountants and other firms regularly and only use what we feel are the pick of the bunch for our clients. Let me know where you are located, I may know someone that can help in your area.
Cheers,
FS
Try calling this guy, I get my advice off him for my Melbourne transactions:
Stefan Deffert
Group Director
Level 5, 34 Queen Street
Melbourne Victoria 3000
T +61 3 8610 3900
F +61 3 8610 3999
http://www.structuredco.com.auA lot depends on the valuer that you are using. I've used lots of different valuers over the years, it really depends on what you're trying to work out. If you find someone with development experience, they may be able to work back. You'll also have examples of other golf courses, and see if the land/houses next to them have a premium or not. Keep on hunting for a valuer that is happy to actually work it out, rather than just looking around and give you comparable sales for things are that not comparable.
With regards to selling it to someone that can subdivide it, another idea it to JV with someone. You put up the land, they put up the expertise. If subdivision gives you an additional $800k (for example) you take half each. It has a little more risk than just selling so it may not be your cup of tea, but is an idea to consider. Roughly where are you located?
Seems like this is a community project – easy way to explain is that it's a strata division of land, so the same as buying a unit, except it's land. You don't have full and free title to the property and your activities can be subject to the approval of the body corporate.
Typically, you'll find that land like this is a lot cheaper, but then you're now owning it like a normal freehold / torrents title.
Yes, the body corporate can increase – and in addition, you'll find that if there are community things that need fixing, often that can come at the cost of the group of land owners – similar to if in a unit complex they need to repaint, they get everyone to chip in.
I've seen some of these in NSW, so that is how they work – hope someone corrects me if I'm wrong about SEQ.FS
There are so many variables – but it depends on the footprint, access to the property (are they both fronting the property, or will you need a driveway down the side becuase you're building them sideways?).
Also depends if you want to subdivide as freehold or keep it as strata. Got any more info on what you're thinking?
FS
Hi there!
I work in a financial planning firm, and we often recommend income protection to our clients. If you want some more specific information so you can have a good idea of what you should be looking for, we've got a fair bit of material that you can have a look at.
We also have software that will rank just about every income protection policy (and other insurances for that matter) in terms of quality, price, options etc for your particular age and risk category.
Protecting your income is a very smart thing to do – but it's not for everyone. Andrew's explanation above is spot on the money, so no need to repeat!
So, just message me if you want me to send anything through to you.FS
It all comes down to a plan – think ahead and think of what you are wanting to achieve. Think about the types of risks that you feel comfortable with. A few things to keep in mind:
1. if you have a debt that was used for business or investment purposes, then the interest is tax deductible. That being the case, on a tax bracket of 30%, your effective after tax rate of interest that you are paying is probably somewhere in the 3-4% range. That makes it very cheap money. You have to think of the alternatives of paying it off when every $100 you put on the loan only saves you $3-4. If you were to invest that money, it's possible that for every hundred dollars you could net more. If you feel comfortable with that idea, and feel that there are better potential earnings out there, then yes – buying another property is a great idea.Paying mortgage insurance – well, it's evil, we all hate it, but if you have to pay it I usually tell people to just go head and pay it. Why? If you do your analysis and work out that you're getting a good deal, all costs in included, then you're getting a good deal. It's just another fee that you have to pay, and it's a cost of investing. Avoid it as much as possible, but don't let it be a main decision driver for your choice to buy or not. I've seen people miss out on great opportunities that could have made them some serious returns, if only they had forked out the additional $$'s for LMI (Lenders Mortgage Insurance).
Great questions, and don't feel silly or stupid asking things on here. We all started out where you are, and it's a great and liberating process to learn how to take control of your financial future.
Honestly don't know why the MISA exists these days, I really feels like a 1990's product! CBA should really just bin it and catch up with the rest of the world.
I agree… do things properly, it's not worth the hassle in the future if you get something wrong.
Have to say, it's so much better in in NSW – I've got a great propery manager and would not give them up even if someone offered to do it for free. Sydney is a much more competitive market, however the costs are not really lower for running a property rent roll.
Bit by bit, competition will push prices lower, but it takes time!Ohhh, that's good… making it's way around the office now, I can hear the laughter!
Andrew is pretty much on the money. However, your total position has to be taken into consideration. If you sustain a loss of that size, can you wear it? And if you can wear it, what will be the probability of being able to invest in the future? One of the things that a lot of people get wrong is that they sell when things are bad, and they don't buy back in until things are a little better, therefore missing out on potential upside.
But your answer really comes down to if you sell, can you make the money back up faster elsewhere (if no, hold), if you can make the money up elsewhere, and do it faster, then it may be worth it otherwise you'll end up with a very large hole to fill, and no way to fill it.
I would seek some help from someone, tell them everything so that they have a good perspective about what your various options are, and work out a plan on what to do.You may have some loan break fees (depends on the product – but the less you pay going in, the more you pay going out – so there may be some loan set up costs if you find a product that has few or any exit fees). Additionally, holding costs may incur some utility costs plus rates etc.
Not sure if you have included conveyancing fees in your selling and purchasing costs, am assuming so.Haha, time to do a little spruiking
Our Financial Planning firm charges no commission at all on super and managed funds etc. Nil upfront, and nil ongoing. We only charge for the advice that we give. So, you pay for what you get, you don't have to worry about paying 0.8% for the next 10,20, 30 yrs and not getting any service or advice.
Eventually, we expect the industry to move this way, we're just starting a little earlier. For mortgages, the same thing may happen, but it's going to take a lot longer. I already know of some mortgage brokers that charge an hourly rate for the work they do, and then rebate some or all of the commission. At least you know there are no conflicts of interest!
FS
Are we right to assume that you're not self employed? Fletcher Tax is right, you should be conservative and leave some room. If you do go hard and trying and get as much back, just be prepared if you get wrong, as you'll need to come up with more money. Don't hinge your future cash flows (and gearing levels) on the additional cash flow, as that can change in a heartbeat.
We've managed to put a few loans through of that size recently at the 1% discount mark, however we have not been able to do anything more than 1% for a while now – the banks are just not as competitive as they used to be.
Loan quality also plays a role in the discount that you can get now.
Keep trying, it's possible to do it !!! If you keep hitting a brick wall, let me know (Message me) and I'll point you in the right direction.FS
You really just have to weigh up the options and look at things mathematically – if you pump money into something else, what will be the potential financial reward over the same period of time, and will it be superior to owning the block of land? If it is, then you're better off doing something else, then using the proceeds from that to buy the dream house – then you'll have less debt, or maybe own it outright.
On the flip side, if it works out that you'll be financially better off in the future because you expect the property to significaly increase in value over that period of time, then you have your answer.On top of all of that is the emotional aspect – sometimes, you just can't live without something, regardless of the financial reality, so sometimes, that can override the whole thing. Time to open up an excel spreadsheet!
I know the guys at C&N very well, and they are great at what they do. However, if you're after something basic, like a SMSF, you can get the same things are lower rates elsewhere.
They're great at some of the more complex trust issues, however keep in mind that if you can find someone else with the same IP, they'll probably do it for less.
You can just google SMSF setup, and you'll get 100+ sites with prices to compare off the bat!
FS
