Forum Replies Created
Normally people would access enough money from equity release to fund a 20% deposit, stamp duty and buying costs on a new investment property purchase. The balance (80% of purchase price) would come from a new and separate loan.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Out of interest…. which conveyancer/solicitor are you using?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Tread with caution… I’ve heard a few brokers mention that a lot of the bank valuations for purchases in Tarneit are not stacking up against purchase price.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hmmm.
There are two questions here really. The first is deductibility. I would imagine from a taxation perspective your “hired help” would be tax deductible. Check with your accountant. Note that if any of these properties are held in a SMSF you’ll probably run into strife employing yourself or a related party.
However the more important issue is you not being represented by a (real estate) licensed PM that is up to speed with tenancy laws etc.
I think it would be fine if you were using your cousin to just do admin (eg pay bills). However I do not think it is a good idea to have your cousin do anything relating to the tenancy itself. I don’t see tribunal looking favourably upon your case with no licensed PM in the equation, and also your insurance premium is likely to be higher due to the fact insurers deem it a higher likelihood of there being tenancy problems (and thus a claim) if no licensed PM is in the equation.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Shirley… time you got yourself a new accountant I think !
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I’m going to say it. I think this property is a bad idea for a SMSF. A big part of the value of acquiring property is the power of leverage (borrowing). If you cannot borrow and have to pay extra for specialist legal advice about the complexity of a property that is still only going to give you normal residential returns, then what is the point?
That’s my opinion…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Welcome to the forums !
The question of whether it is worth hiring a BA is rather a big question.
Depending on the service offerings that are included in a particular BA’s service, they may be of value to you in a number of ways including:
– Putting an end to analysis paralysis by doing analysis for you and getting on with acquiring a property
– Leveraging knowledge they already have about an area to move swiftly for you
– Targeting the kind of property that is possible for you to secure finance for, and with the right numbers for you to hang onto the property easily
– Walking you through little things you might not understand or even know about with respect to the purchasing process and becoming a landlordSome BAs charge by percentage of sale price and others a flat-rate fee. Remember that GST may apply so it is important to check if GST is included in the fee quoted, and be clear on the services provided within the fee as this can be quite different from one agent to the next. For instance, normally, you will be required to nominate where you wish to buy and the agent will either take you on since your nominated suburb(s) are within their area of expertise, or indicate they cannot take you on since they do not cover your nominated suburb(s).
I find that a lot of clients are keen to do their own research/hunting and come to the realisation there is physically not enough time in their busy lives to do so. Or that they continually allow nerves to get in the way and thus never actually take the step of purchasing. These are a couple of examples of people that use BAs to take them forward more quickly than they could move alone.
Normally a BA is located local to their service area thus enabling them to be extremely familiar with the area and the market.
You probably need to work out where you are trying to get to with investing, and whether you think you can get there on your own or whether you would like a hand, whether it be only for the first purchase till you know how things work, or whether you then find that it really works for you and you feel like you can move forward quicker with the help. If you aren’t sure what sort of thing to buy or where, then a BA that includes suburb selection in their service might suit you really well.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The definition of “rich” depends on your value system.
To one person “rich” might mean having enough money to cover the bills, eat well, socialize etc without worrying whether you can pay the bills.
To another person “rich” might mean not being happy unless there is an overseas holiday each year.
To another person “rich” might mean being surrounded by people that care about you and to be in good health.
You get the idea.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi @brockman
Firstly check the PM is doing a decent job. Are they advertising opens at sensible times when most people can attend? Are the photos showing what the property has to offer? Have a friend contact the PM as a prospective tenant and see how the contact is handled. For example, did the receptionist take a message that nobody responded to ? Or did the PM come on the phone but fail to offer a sensible viewing timeslot?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi @lenkat
As the others have pointed out, the answer is usually no. However if you really want it staged just for pics, one option is using one of those virtual staging mobs. They superimpose furniture etc into the pics. Some companies appear to do the photography with the staging as an extra, and some do just the staging. Here is one ; http://www.virtualfurniture.com.au
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Pleasure. The nitti gritti proper “numbers” involve having more experience with development, but it’s easy to rule out a lot of deals just on high level numbers as they don’t come anywhere near stacking up.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I would say spread your risk rather than put all your eggs in one basket. Your other option doesn’t have to be Newcastle though…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi there @nicemum
Firstly take a look at high-level costings such as :
Purchase price of land
Stamp duty
Legal costs of acquisition
Cost of getting permits finalised
Costs of demolition permit and demolition itself
Cost of mortgage interest during this time
Cost of the build
Cost of mortgage interest for the build
Cost of subdivision
Selling agent costs
Capital gains taxThen look at likely resale value of the units
If the numbers are close together, don’t bother. You also need a buffer for inevitable cost blow-outs. Best to discuss the idea with your accountant if this is your first attempt. Don’t go buying it without being sure of your numbers.
On the surface of things, unless the existing house doesn’t have to be demolished to make way for the units, this looks like a guaranteed loss-maker.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
This issue comes up often.
Laws in each state are different, but generally an agent is not required to pass on offers that fall outside a certain set of parameters if the vendor has instructed them not to bother them with such offers.
For instance, in Victoria, regulations 16 and 24 of the Estate Agents Professional Conduct Regulations 2008 state;
“Unless otherwise instructed in writing by his or her principal, an agent or agent’s representative must communicate to the principal all offers to purchase, sell or lease real estate or a business, made to the agent or agent’s representative, whether those offers were made verbally or in writing, as soon as possible after the offer has been made.”
The definition of “principal” is the person who engages the services of the estate agent or agent’s representative to act on the person’s behalf. In other words, principal means the vendor, or person legally allowed to arrange the sale of the property and as such recruit an agent to sell it for them (eg Power of Attorney, executor of estate etc).
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Kristy
Richard Taylor operates in the Brisbane area and specializes in that budget range.
https://www.propertyinvesting.com/members/qlds007/
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hmm, sounds like your bathroom has the toilet in the same room, and that the floorboards need replacing. Dilemma.
For just a week the tenants might find it a hassle to move out and prefer alternate options.
If you were dealing with a concrete slab I would say replace with a nice lino. However it sounds like that is not the case.
Check with your property manager as to whether you can have people residing in the home at all if there is literally no floor in the bathroom. Even though you may tell them it is unsafe to go into that room the law might say you cannot take the risk of them being silly and going in there anyway.
If the room only had the shower, bath and sink I’d be suggesting looking at options such as a week’s free passes to the local swimming pool or gym that has shower facilities (in fact the tenant could probably get a free week’s trial at a local gym). There is also the option of temporary showers and toilets… cubicles that go in the backyard. If it went on for weeks on end it’s a bit unfair, but for only a week people can manage.
Another option is to ask your property manager if they have properties nearby on the books that are having trouble getting tenants and see if you can lease one for a week or two. It’ll be cheaper than a hotel.
In summary the options, depending on circumstances, and how flexible the tenant is, are;
– Choose a quick-replace solution such as lino over concrete
– Go with budget options such as utilisation of shower facilities in nearby gym or swimmingpool. Doesn’t solve the problem if the only toilet is in your bathroom though.
– Temporary shower and toilet solutions (cubicle in backyard)
Hotel/shortstay
– See if tenants have friends/relatives they can stay with for a week until the works are finished, in exchange for some rent exemption/rebate
– Leasing a regular residential rental for a week or two
– Wait till lease ends to do the repairs … somewhat irrelevant though if the tenant plans to renew the lease.Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
+1 for Sam at Qura
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I don’t have a huge beef with titles with sewer pipes within the boundary lines, but running underneath the house wouldn’t be my cup of tea. Could be real messy if that pipe is suddenly deemed to need a repair. Snuggled along a fence-line is a different story.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi @robmc
The thing you’ll definitely need is a good mortgage broker who knows how to approach financing deals like this (presuming you require borrowings).
Last I checked, expats pay 30% in every dollar of profits in tax.
You’d also need to consider how you will select an appropriate property and be confident of the condition of the property if you’re not here to see it. ie will you pluck something off the internet and hope it’s ok or organise a Buyers Agent to assist. Many of my clients are expats that need a person in the know on the ground to organise everything for them.
Buyers Agents normally have a network of mortgage brokers that they work with.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi @zen007
Glad you found the forums so we can keep you out of strife. Can’t say this “opportunity” is particularly appealing.
Take a step back and try not to focus on a particular property but rather work out what financial goal you are working towards and how much capital (money) you have saved to get you started. That should keep you focused on facts and figures rather than distracting glossy brochures :)
Can you tell us a bit about your circumstances… age, married/not kids/not, how much you’ve saved etc. That should helps us make more useful comments.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
