[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 19, 2012 - 2:37 am

Looks like this information is not available yet.

This week was the first time the new parliment sat in QLD so hopefully they do something about implementing this policy in the next few weeks.

I will keep my ear to the ground and post back here if I hear of anything.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 19, 2012 - 2:33 am

Hi QM,

I would personally use the $100k to invest in a different area that has a better chance of getting good capital gains in the short term.

The northern beaches may be a great area to live, but it is expensive.  Having two properties in the same region also increases your risk because if prices stagnate or go down in that area then you are going nowhere fast.

You may also be eligible to pay land tax if you have a combined land value in one state exceeding a certain threshold.  You would want to avoid this where possible because it is just a blatant money grab out of your pocket (much like stamp duty).

$100k could get you a $500k investment property (at 80% LVR, avoiding mortgage insurance).  If you can find such a property that provides a good rental return, it may cost you nothing to hold the property.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 19, 2012 - 2:26 am

You definately do NOT need to sell your property through your current property manager.  You can use whatever agent you want.

I sold my first property south of Brisbane 2 years ago and negotiated a flat 2.5% commission, which is about average I think.

You may pay some discharge costs on your mortgage (if you have one) as well.  I had 3 mortgages on my property and because 2 of them were less than 5 years old, I paid a few hundred dollars for discharge fees.  The federal government recently overhauled discharge fees so I think if you are taking out a new mortgage, you are not liable for the discharge fees.

You may also be liable for capital gains tax if you made a capital gain.  Say you made $100k gain, half of that ($50k) would be added to your taxable income for this financial year and taxed at income tax rates.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 19, 2012 - 2:18 am

I recently asked my broker about a 97% loan because I had seen them advertised by RAMS and some other lenders.

My broker said (like the other replies above) that these are not genuine 97% loans, they are actually 95% loans with a 2% lenders mortgage insurance added to the loan amount.

So, you actually need the 5% deposit but you end up with 3% equity in the property due to the capitalising of the LMI.

I am hoping to get a 95% loan soon for a PPOR, hopefully it won't be too difficult.

Btw, I can definately recommend my broker, but he is Brisbane based (aussie home loans).

Cheers.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 5, 2012 - 12:20 am

Hi Richard, thanks for the info, I will use 1% as a rule of thumb for now.

I also should have mentioned that I am not a first home buyer.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

May 3, 2012 - 11:56 pm

Your figures look reasonable, and there certainly are opportunities out there to make a profit in properpty development.

I think you just have to evaluate the risks and work out whether you're willing to go with them.

What happens if bad weather blows out the project by 6 months?

What happens if you can't sell the vacant blocks in a reasonable time?

I think if it's your first time doing such a development, aim to make a profit but be prepared to make nothing and learn a lot of lessons.  Then you can carry that experience into your next venture.

Good luck.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

December 18, 2011 - 8:21 am

Hi,

You can get some good free data from Home Price Guide (data from Australian Property Monitors).  If you search on a suburb and then click on the demographics tab, you can see lots of info such as age group, birthplace, type of properties in the area etc as well as seeing some recent sales prices and median values.

I have also purchased a hotspotting report (Terry Ryder) previously for around $90 which I thought had some pretty good research in it and good ideas of where to invest.  The report I purchased was actually based on regional NSW hotspots (such as hunter valley region).

Hope that helps,

Darren.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 20, 2011 - 6:28 am

Invest where the jobs are, to put it simply.  If you're buying property near where people are earning good incomes, you will always have a supply of tenants and there should also be demand for sales.

If interest rates go up sharply then this will hurt affordability and possibly see a longer period of stagnant prices.

But current view is for interest rates to go down in the short term.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 19, 2011 - 12:06 am

I'm looking to buy in Brisbane next year, hopefully within about 9 months.

If prices stay flat or fall a bit further, that will be great for me.  However, I'm a little nervous they will shoot up in that time.  From what others have been saying, they don't expect that to happen. 

But if the anticipated rate cut happens on melbourne cup day, that might just be the straw that breaks and gets people buying again.

Brisbane is in the top 3 most affordable capital cities in Australia now.

Does anyone know, besides the river flooding, what is driving Brisbane's prices down?  Is it simply an excess of stock…or is there some other reason why demand is soft?

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 18, 2011 - 11:54 pm

Catalyst wrote:

lifestylez wrote:

As a first home buyer, I would go for buying your own home and claim the FHOG.

See how you go living in it for 6 months and if you decide you want to live somewhere else, then you can rent it out.

If you think that is likely, then try and buy somewhere you can live for a while but with a view to making it an IP.  So you will need to focus more on it's capital growth potential and income potential (yield) so when you rent it out, it is still a reasonable investment.

If you go straight for the IP, you won't get the FHOG. That's $7,000 you miss out on.

Sounds like guesswork to me. Buy a place, see if you like it, if you don't move out. That's just plain craz and will not lead to a property portfolio. But granted you will save $7,000. THINK BIG. You can make more than $7,000 on your first purchase but you can lose a hell of a lot more than that by buying in the wrong place JUST to save $7,000.

Purchasing a PPOR is VERY different to purchasing an IP. Decide which you are buying BEFORE you buy it. Even if you do decide to live in it for 6 months. You still need to know where you are going with it.

Read my signature.

I'm probably biased, because that method worked for me.  You are right, if you go for the PPOR you will probably have to sacrifice investment factors because you need to buy where you can live too.

I didn't know you could buy an IP first and then use the FHOG later on a PPOR.  It's been over 7 years since I claimed the FHOG so the rules must have changed (or I was ignorant in the first place).

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 16, 2011 - 1:21 am

I've heard of the Olympic Dam project, but I don't know the area at all.

Are there other industries around to help support the employed population?

It's just risky if you are betting it all on the project coming to fruition (which I think will take a few years anyway?).

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 16, 2011 - 1:04 am

[email protected] wrote:

Its a long block, and putting one house behind the other. $140 is all included, fixed price. The house wont be an extension as it will be subdivided…such as 5a and 5b… Have you built before? haha your right I haven't built before but im trying to come up with win win scenario's as my partner wants to buy PPOR and I want to buy an investment property haha. I dont want to buy PPOR with a new home as then all our deposit is gone and we only have a PPOR and no investment…AS it'd be a new home…there wouldnt be much to do in order to add equity – so we'd have to wait until we repay off a lot or housing prices increase… Only when equity is below LVR of say 80% then we could look at investment property as the interest on that equity loan would be tax deductible… BUt your right the accountant may agree with you that we cannot claim some expenses as its a extension…hopefully not though!

Ok then, $140k all included is a great price.  I haven't built before but my parents are building at the moment and their costs are going to be around $240k, all included.  Not sure why there is such a large gap.  I was going to build at one stage and my costs were going to be over $200k as well (but I ended up not going through with the project).

You did say you were planning to subdivide down the track, which is why I recommended against it.  But if you subdivide and split itno 2 blocks before building, then that would be different.  You could quite easily seperate it out as a PPOR and an IP.

Maybe, you go just for the PPOR for now (and position it so that there is room for the subdivision later)…see how that pans out…re-visit your finances…and then look into getting the subdivision done.

It would be less stressful than trying to 2 both projects at the same time.

Good luck, whichever way you go

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 16, 2011 - 12:54 am

Good advice from Meg.  I can't add much to that.

I can recommend a really good mortgage broker if you need one.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 16, 2011 - 12:52 am

matthew.f wrote:

lifestylez wrote:

I'm not buying right now because I plan on getting back into a PPOR in Brisbane next year.

I basically do not have enough spare cash or equity to buy an IP at the moment.

Wish I did though, because there's some good buys out there.

Is that link to Logan City your site… Great post.

Yeah, that's my site I started about 4 months ago.  Thanks for the compliment!  And thanks for commenting on the post too, I approved it.  I don't get very many genuine comments related to the content of the post (lots of spam though!)

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 16, 2011 - 12:49 am

As a first home buyer, I would go for buying your own home and claim the FHOG.

See how you go living in it for 6 months and if you decide you want to live somewhere else, then you can rent it out.

If you think that is likely, then try and buy somewhere you can live for a while but with a view to making it an IP.  So you will need to focus more on it's capital growth potential and income potential (yield) so when you rent it out, it is still a reasonable investment.

If you go straight for the IP, you won't get the FHOG. That's $7,000 you miss out on.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 15, 2011 - 5:30 am

dcwwood wrote:

I'm not a fan of Roger Montgomery – if he is so good and follows Buffett's way of investing, why isn't he Australia's riches person! Best thing you can do is (like for property investing) learn for yourself – books, seminars, search the web and asx.com.au, mentors, financial planners etc. Another share tip I can give you is research http://www.argoinvestments.com.au/ – they are a listed investment company, learn what they do, what companies they are buying and then buy them and follow their lead – they've been around for 100 years and continue to grow and pay a dividend – I'm a massive fan plus I follow their lead in investing in quality companies.

That's a bit of a lame reason to not be a fan!  So you only ever take advice from the richest person in Australia?  Buffet's been investing about 40 years longer too…Hmmm….

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 15, 2011 - 5:26 am

Hi Johk,

Your numbers look mostly correct to me.  Don't forget you can claim depreciation on newer properties which will increase your after-tax cashflow.  For example, if your gross cashflow on the property is -$15,000/year:

Tax Saving @ 30% tax rate: $4,500
$10,000 Depreciation @ 30% tax rate: $3,000

Therefore your after-tax cashflow is actually -$7,500 and not -$15,000/year.

I have made a big assumption with the $10k depreciation for the example, that is something you should get a quantity surveyor to estimate for you.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 15, 2011 - 2:36 am

That's an interesting concept.

Obviously, buyer's agents are looking to get property below market value for their clients.

But since you won't be paying any commissions to the buyer's agent, you can probably afford to come down below market value.

However, if you won't the absolute best price for your properties, a sellers agent works to get that.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 15, 2011 - 2:27 am

If you've got a renovating forumla that works and makes you profit, just try replicating that in Brisbane.  For example, do you renovate apartments for young professionals?  Do you renovate houses for families?  Do you renovate luxury houses for executives? What type of properties are making you the good returns?

Obviously we are in a down market, and it could be a challenge to not over-capitalise.  I doubt there would be much money in renovating cheaper first home buyers places because these buyers usually have a strict limit on how much they can spend.  On the other hand, upgraders and high income earners are more likely to compete for that well finished property and pay more than is required to get what they are looking for.

[lifestylezParticipant@lifestylezJoin Date: 2011Post Count: 61]

October 15, 2011 - 2:22 am

Hi Chazz,

Some areas that are expected to be good buying (based on some of my own research and hearing other proprerty commentators):

– Hunter Valley NSW (Maitland, Muswellbrook, Cessnock)
– Northern Adelaide suburbs
– Port Lincoln (used by new mines in the SA area)
– Gladestone area (although already risen alot, may not be much left in it)
– Ipswich, Logan City, Brisbane (look for undervalued suburbs, you can still buy houses mid $300k less than 10kms from Bris CBD)
– Perth, one of the biggest declines along with Brisbane, but should still be in good demand in the future
– Western Sydney

Areas to Avoid:

– Gold Coast Apartments (huge oversupply at the moment)
– Melbourne (for the short term, it's already seen big gains last year)

Of course this is just an overview, and really, you can find opportunities in most cities or towns as long as you follow the infrastructure, make sure there is a wide spread of industries to support jobs in the area and the population growth is significant.

Oh, if you're into shares as well, I would recommend taking a look at Roger Montgomery's "Value.able" book which teaches you how to identify high quality companies and buy them for below what they're worth (intrinsic value).  RogerMontgomery.com.  Before reading that book, I was investing blindly and even though my portfolio is down in the past 12 months (who's isn't right?) my losses could be alot worse if I had not of start using his advice.

Cheers.