This quoting of returns on property comes up a lot, and it is not a relevant figure anyway. Here’s why:

If I put $20k in a Term Deposit and get back 6% return per year (good luck), then my return is $1,200 per year. Over 10 years my total return is $12,000 on my $20,000.

This is as much as I can get for my $20k in the Bank, unless I re-invest…[Read more]

Given your building expertise and available equity, I reckon a good strategy would be to –
a) buy houses that need doing up and have enough land for subdivision,
b) do up old house then rent out while applying for subdivision and building permits,
c) subdivide, build and then sell renovated house and keep the new one as a rental with all the great…[Read more]

you wanna see overpriced? come over here to LaLa Land!

Melb is all right Jack.

To answer the question Hook, I reckon not a lot going on this year unless you are in the top end of the market; seems to be going nicely despite the boom but of course the entry level is a killer, or look for the ugly, cheap areas where no-one used to want to live,…[Read more]

The body corporate really only controls all the ‘common areas’ of the complex such as driveways, bin area, front of unit gardens and of course the exterior of the buildings.
There should be a map of the areas it controls somewhere in the body corp minutes – ring the body corp manager and ask for a copy.

As for interior and back yard – should be…[Read more]

These sorts of organisations are usually a marketing company for a developer/s.

They will try to get you to buy overpriced properties that they want to sell, by telling you about how you can ‘secure your future’ with neg geared property (theirs).

The cost of the marketing and the commissions for salespeople who will be coming to see you for the…[Read more]

“That has to weighed up against capital gains tax. If he rents the place out even for 1 day as I under stand it, he waves his right to no capital gains tax when he sells the unit”.

The C.G.T on your PPoR if you rent it out is pro-rated, and you can rent it out for up to 6 years without being liable for C.G.T (there was considerable discussion…[Read more]

The problem with selling all the I.P’s to buy a better/bigger PPoR, and then using the equity in the new PPoR to buy new I.P’s is that you will pay an absolute fortune in C.G.T, buying and selling costs.

Do you NEED an upgrade or do you just WANT an upgrade?

If it’s just a WANT, then I think it is financially unintelligent to go down the path…[Read more]

In a word – affordability.

At the moment most areas are at very low affordability rates. Another interest rate rise or two will slow things down even more.

I have heard that the higher end of the market is flying along nicely, so obviously the more well off aren’t as affected by all the property value increases or interest rates.

Mr and Mrs…[Read more]

I.M.H.O,

to buy a PPoR at this stage of life (trying to retire) and having any mortgage on it is going to impact on your lifestyle severely.

You will have to sell the I.P’s, which cuts out the income from the rent, then fork out for non-tax deductible interest every month. Or, if you sell both I.p’s and are able to buy a PPoR outright and debt…[Read more]

Originally posted by russell13:
Thanks for your reply Marc, you brought up some good points. Over the next two years do you think we should just pump all our money into this loan or try to save 10 or 20 thousand as well?

Russell

I would be blasting away at that loan as hard as you can. The sooner you can pay it off, the more interest you will…[Read more]

My preferred option would be Idea no.1.

If you don’t mind renting a place for yourself, this option will accelerate your wealth much faster I believe. It’s just a matter of getting past the mental block of renting. Once you’ve done that you’re on your way.

The interest on you PPoR is not tax deductible, and it is normally much cheaper to rent…[Read more]

Welcome to the forum Russell.

If you are able to service a loan on a unit and on the block of land when you return to Aus then this is probably the best long-term scenario as you then have 2 properties increasing in value, but you may find that owning a unit and a block of land might restrict your ability to borrow more for the building on the…[Read more]

There was a bit of discussion just the other day about “how do these people buy so many in so little time?”

Those scenarios aren’t happening now I would suspect.

Here’s how it happens:
– during a boom,
– in places where the properties are very cheap – under $100k ,
– the rent returns are up around 10% (or more),
– the people are probably earning…[Read more]

Originally posted by wilrose:
The views expressed thus far seem to cover the spectrum, except to add that perhaps some new cars are really a very good option in certain circumstances: eg, In the range of $17500 to $28000 (which will cover 1.6 litre Hyundai to 4 litre Falcon/Commodore, all ex gst) , should you have self employment status and…[Read more]

Originally posted by dacium:
What I mean is that if people have debts already they struggle really badly.

$39k per year is about $576 per week. $200 rent. $125 car payment. $80 other car costs (fuel, insurnace, rego). $40 bills (elec. phone. etc). Food $100. HECS $30. That leaves $0. Maybe $100 if you used share accomidation and paid $100 a week…[Read more]

A cheaper interest rate with no flexibility is not as good as a slightly more expensive rate with lots of flexibility. Saving a few grand per year on the interest now could cost 100’s of grand over your life time.

Also, the interest is tax deductible, so by the time you factor in tax claims the difference is 3/5th’s of not much and as Richard…[Read more]

Any car is a liability – costs you money.

The less you pay out for one the better. The rest is is just “stuff” and will interfere with your ability to create more wealth.

Leasing a car can be a tax deduction, but you still need to come up with the monthly payments first. And, the tax deduction is still on a depreciating liability – it’s…[Read more]

Speaking of Dande-thong, I just received this email from my brother-in-law;

DANDENONGSECONDARYCOLLEGE-CITYOFGREATERDANDENONG MATHEMATICSEXAM
C:JD MillsJCDandenong Mathematics Exam.doc Page 1 Of 2
NAME
GANG
Youse Time allowed is 1 hour
1. If Mohamed lowers his WRX 2 inches front and back and puts on stolen
18-inch Auscar slotted wheels, how many…[Read more]

Thanks for that WorldChanger,

quite a surprise to hear the majority a really just ‘treading water’ so to speak.

So if that is the majority of cases, where does the real money making come from? Is it through multi-family dwellings such as blocks of apartments, subdivisions, flips – what?

Cheers,
Marc.
erardent@hotmail.com

“we get sent lemons;…[Read more]

Thanks Richard. You beat me to it.

I was going to explain it this way;
the ‘useable’ equity is what you can actually borrow after the exisiting loans have been deducted from the 80% of the house value.

For example; you have a house worth $400k.
80% of this is $320k. The Bank will let you borrow this amount, less any existing loans. You have an…[Read more]