Forum Replies Created
Hi Budgy, I was interested to read your post as one of my co-workers told me this week that she would like to start investing but can't do so until the (3) kids are off her hands. I didn't stop to try and convince her otherwise as I've come to the opinion that if you you want it enough, you will find a way. To make my point let's use me and my co-worker as an example. Similar age, both have 3 kids. We both earn about the same money. Her hubby workers full-time, my wife works 2 days per week. She says that at the end of every month, every cent they earn has been spent to either pay their morgage, bills or fund life style. Thankfully my situation is a little different. Our family can save an average $2000 per month, from the money we earn as employees. In addition to this, (using last financial years figures) we had investment income of $4,500 per month. Our outgoings (interest, land tax, repairs etc) to earn this$4,500 per month were $1750 per month. We only started investing 5 years ago. The 5 years prior to this we did everything we could to pay down the morgage on the house we built 10 years ago. I might add that all of our 3 children have been born in the last 10 years and my wife didn't work for a whole year following the birth of each. Our investments are a mix of property and managed funds. From my experience, yes it is possible. Then again, my co-worker may tell otherwise???? All the best
Hallg
Hi Jim, nice problem. Not sure if this suggestion is too much out of left field but is it possible to build a house some where on the property with out reducing its value? If it is, it maybe worth considering doing this and moving into it as your PPOR. My understanding is that you can sell a PPOR on up to 5 acres of land with out it being subject to CGT?? Not sure if there are other rules that may negate this possibility? Just a thought. Best of luck.
Hallg
LA Aussie your comments about the present high demand for housing appear to be correct. Was having a chat to a sales manager for one of the local project builders today when he called at my place to pick up his son who had stayed over night (when do the school holidays end!!!). Asked him how things were travelling at work and expected to hear something like “boy these interest rate rises are making it tough”. Instead he told me that December was their biggest month ever. I’m sure that things must slow a little sooner or later due to a range of economic reasons but there is still this apparently inescapable reality that more housing is required in many part of Aust. In the same conversation he told me that they have recently lifted their average house price by $3000 due to increased costs. I would have thought these increased costs for new homes also helps to underpin the value of existing houses (if not increase them).
Hallg
Hi AngB, I know the main focus on this site is property, but have you done any home work on things that could help your mum improve her position besides property?
Hallg
Housing affordability was mentioned more than once by Mr Rudd as an issue in this election. Must confess i cannot recall what his solutions were? Could we see alterations to tax law such as depreciation rates and CGT?? I guess time will tell.
Hallg
Hi, I’m sure there must be some one out there who could answer this from an informed position but my experience tells me that whether you pay gst on a commercial property is dependent on the position of the seller. I purchased a commercial property 4 years ago and did not pay gst. The previous owner had owned the property for 20 years which meant he had purchased it prior to the days of gst and i assume had not registered for gst after its introductionn?? I’m also have not registered for gst which means I don’t add gst to the current rent. I assume I could sell it with out adding gst but I guess I need to ask my accountant that one.
I’ve been to a couple of rate recovery auctions (conduct on behalf of the local council). The properties for sale were residential but I noted gst was applicable in these case which again makes me think it is the status of the seller which determines whether gst needs to be applied.
Not too sure what you’re asking about the rent? If your asking how do you determine what you would actually charge per year, the best bet would be to talk to an agent or do some home work on like properties.hallg
For me the main issue here is “how will the current climate conditions impact the economics of an area?” I live in central Vic and like most places water is a big issue around here. Yes they have just connected places like Bendigo and Ballarat to a ” Super pipe” but the pipe is only any good if there is water to run through it?? From what I see there is no certainity of this going forward!! At some point this lack of certainity must have an impact as those within Industry and with dollars to invest, are unlikely to choose this area. If it was my money I’m certain I ‘d look else where. Present industries are finding it tough enough. In the past couple of weeks over 100 people around here have lost their jobs due to the lack of rain.And I’m sure there are others that have not been in the media. Apple growers in the Harcourt Valley are trying to keep their trees alive and productive on 30% of their entitlements. I could mention many other examples. I hope I’m wrong but areas with issues such as these may not be the best places to buy an IP???
Hallg
Have you tried Bendigo Real Estate? The Property Manager there is Ray Carrington
Hallg
Hi Millions, I would buy in Bendigo Vic if any where, but my post was more a theoritical question. In my own way I was trying to say that house prices in most areas really can’t fall (crash) very far because the cost of producing them has risen considerably over tha past few years. I read some comments suggesting doom and gloom (I assume that means large drops in property prices) but i pose the question, if the cost of building the average house is, let’s say $250,000, that means that when no one is willing to offer $250,000 for the average house, production will cease. These basic economics therefore put some type of floor under the value of exist house stock? Sorry if I’m not explaining myself very well.
Hallg
Hi all, I read all comments on this subject with interest. Each contribution in isolation appears to make sense. However the one thing I cannot reconcile is how far can house prices really fall when the cost to replace them continues to grow? When I talk to my tradie friends they all tell me about increased expenses such as materials, labour, vehicles, fuel and compliance (OH+S etc). Then on top of this there are gov't charges, land cost and many other development expenses (eg where I live the council has just lifted all its charges by 6%). The way I see it, if I'm in the market to buy a home I have 2 choices. Firstly I can have one built (or buy new) or I can buy from older housing stock. Sure i would like to buy new but when I do my sums I find that I can buy from existing housing stock cheaper than what I can build for. Only problem is every one else has realised the same therefore there is a high level of competition for the houses I'm interested in buying so the price gets pushed up to just below that of a new one. I guess in short, my question is, how far below the cost of replacment can an item fall? Particularly when then is demand for the product (every one keeps saying more homes are needed) I'm sure not to many investors/builders will continue to build new ones if they are worth less than what they actually cost to put there???
HallgHi Tools, I know a couple of the guys at Curnow Dyett real estate (03 54430733) are valuers. I don’t know how many real estate agents are certified valuers, but I would think that a valuer who actually sells property would have a pretty good perspective on things. Other this, Woodland valuers are spoken well of.
Hallg
Hi, I managed a renovation project in my role at work early this year. We had a report done prior to starting and it showed up Asbestos in 2 places in the building. As we didn’t have to do any demolition in the areas that contained Asbestos, we just left it in place and painted it. I’m in Vic and I’m not sure what the law actually says here, but I would have thought our building inspector would have made us remove it if we had to. So I assume a report here only becomes an issue if you start to disturb the asbestos in its current position? Others may know better and about NSW.
Hallg
Hi Longroad, I don’t have precise numbers but Bendigo has experienced good population growth over the past few year. About 2000 per annum I think. One thing I see on the upside is the completion of the freeway to Melb. Final stage is now well under way. I was talking to a business consultant the other day who moved to Bendigo from Sydney. Time wise he is now closer to the airport than what he was living in metro Sydney and it will only improve once the road is finished. On the business front the big success story is the Bendigo Bank. This has been great for employment in the town.There was also big hope that mining would return to its glory days but this does not now look likley. Yes water is an issue but I think the impact of the dry conditions on the rural sector in the region is a bigger one.
Hallg
Hi, if you looking to inspire people I hope you don’t mind me sharing one story which is not about myself. In 2001 a house and 20 acres was offered for sale. It was purchased by a couple I know very well. They paid $286,000. In 2006 they sold the property to developers for $2.7 million. The amazing thing about this deal is that it happened right under my nose (200 metres from my front gate). I didn’t even consider the property when it was offered for sale??? Often I hear people say that good deals are hard to find. Well I can tell you from experience that the deal of a life time can stare you in the face, but unless your’re looking at with the right attitude, you may not even see it??
Hallg
Hi Orien, here are a couple of names that I hold in good regard.
1) Jason Westcott ph 0409951012
2) Wings Properties ph 03 54461699 (speak to Mark Kemp)If none of these can help, they may suggest some one who can. Both are a good honest businesses who will try and do the right thing by you.
Hallg
Hi Chefman, sounds like it’s time to compromise a little. My guess is the wife as has been supportive up to this stage by watching her spending habits and the such? I know what you mean about “my life style” as she also needs to understand what makes you tick. I had a similar issue last year when my dearest decided we needed a tennis court (lights the lot). Sure I had plenty of places to invest the $50,000 (and it hurt a little at the time) but in the end I’m glad I did something whcih was important to her. Sorry but you need to hear a little of what she is saying.
Regards Hallg
PS: shoot the accountant
Hi Wayne, no residential investments other than PPOR. Have managed funds & shares that have done well. I’m on the look out for my next commercial property but i would prefer to have a tenat lined up before I make the move. In my job I get the opportunity to interact with Managers of businesses and often I quiz them on their current & future accommodation requirements. Currently I have 3 different businesses who have invited me to present them with optiions. The trick with this is to get the timing right as my option will need to marry up with the end of their leases. One owns his site so that’s a little easier as he said he would lease out his current premises if and when I can provide him an option that suits.
Hallg
Hi Wayne, if I look at return on money spent I’ve been getting 9.6%. However in saying this I was able to pull in some favours from tradie friends for reno works which meant I saved considerable dollars. I have not had the building revalued since the reno, but if I did, I suspect I’d be getting a tick over 7% on the value.
Hallg
Hi wayne, yes I own one Commercial property which is in a business zone. Business zone here means office/retail. Don’t have a Commercial zone here so don’t know what is permitted in such zones?
Don’t use a Property Manager but that’s only because everything fell into place (finding a tenant and the like) when I purchased the property. Have a great tenant but if they leave at the end of their current lease I think I would more than likely use one.Hallg
Hi bjb007, I note in your original post that you plan to use a company/trust structure. There are probably plenty of good reasons to do this but on Friday I encounted my first negative of doing this. You see I just recieved my first ever Land Tax Assessment for a property in Vic and if you ask me they appear to have targetted properties held in a trust by introducing a “new” land tax scale for such properties.
My Vic example
1) Unimproved value of land held in a trust = $199,000
Annual land tax assessment = $746
vs
2) Unimproved value of land not held in a trust = $199,000
Annual land tax assessment = Nil
My Vic property is now receiving the same treatment as a property with an unimproved value of $536,000 just because its held in a trust????
bjb007 I “trust” (no pun intended) your investment property is not in Vic? Not sure if any other states have done the same?
Hallg
