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An old suburb near new ones does inherently get pushed up in price.. not to the same amount. It takes a while for the older suburb to have renovs done, new buildings built in it so their new products can be similar to the new suburb. There is some kind of critical mass that needs to be reached before the price is drawn ever upwards towards the new suburb.
Inherently a new suburb will always be worth more as the “materials” used to build are worth more than the shacks on land in the old suburb…. New homes can be between $100K to 300K in addition to land value. The older suburb cant compete with this economically until development and upgrading occurs in the older suburb. Tjhis older suburb will do better than a group of older suburbs together.
Look at the areas surrounding Canning Vale as it grew.
Gosnells has had lots of new development over past 5 yrs. MAddington, Kenwick etc.. have been propelled upward but land there is still at a discount of 20% or so to Gosnells.
A large reason why this happens is econimics.. the multiplier effect of income/money. That is why money spent in building, roads, new public buildings make a huge difference as the people working on these projects have a % of income spent in the community which makes the community wealthier. These people then reno thier homes, buy plasma screens, pools etc.. which moves a suburb from below average to a Claremont, Mt lawley or Freo.
Location factors of water etc.. do make a difference but the economics is a way to predict new growth areas.
I would say your property would have a greater than average chance to grow howeve it may not happen straight away. Another issue for you is that sales evidence at the higher level needs tobe attained to get a genereal jump in price. E.g 4X 2 needs say 5-10 sales at the higher level for valuers and agents to icnrease their value of the area. It takes a while for people to talk up the value… each home talks to friends, banks agent and valuers trying to increase value. Part of the lag is due to the fact not everyone sells they refinance at higher valuation but banks dont like revaluing 4 times a year. Therefore a time lag occurs all along the chain.
PArt of the challenge is to work out how long public works/ development approvals will take place. A Town pLanning Scheme can take 2-6 years to be approved so a suburb can be on hold during this time. IT will increase at some point but you couldbe wating a while. Understanding the policitcal factors and public sentiment in an area can make a big difference to the timing of these events as well as manpower. E.G gosnells council at the moment is overworked and all projects are being put back and back as not enough staff. In 2006 they are implemneting a new computer system across the board which has drained a lot of hours from staff.
I recommend even if you do not develop to find out information relevant to this strategy as if gives you more insight into what is happening in a suburb and you gain better idea of how long new roads, schools, shops (and new business to fill them) takes.
Taking a regular drive through Ellenbrook since it started would be a good idea to see how an area develops… it now has a Dominos, Shopping Centre etc.. and lots more shops to come but intially these did not exist. The company’s who provide franchises etc.. in these new areas wait until there is sufficient population and income to support X sales of pizzas etc.. to support a franchise. Let these companies do all the marketing research for you.
Good luck
Ryan
Hi
In WA at least the fee is a % as the settlement agent takes out insurance for the completion of the settlement. Now as an owner you can self insure this risk but you have no recourse is somehting goes wrong. In WA approx 50% of the fee charged is the insurance premium alone.I would suggest you speak to a settlement agent in your city to ask a fe more details to give you peace of mind.
From a purely investment point of view a company is a seperate entity. This means it has its own borrowing power seperate to the directors and shareholders. When low doc loans.. LMI are invloved you can effectively double your borrowing capacity before you need to source private finance or higher rate non-LMi low doc loans.
Your maximum tax rate is 30%. If you are doing sub-div, flips or reno with purchase to sale under 12 months you are paying only 30% as opposed to most likely 48.5% tax in individual name. So you use the company for short term projects and personal or trusts for longer term to enable the 50% CGT saving.
Another benefit is a company does not need to pay its tax bill unti March the following year after end of tax year. So you get an extra 6 months to utilise the “tax” money for investment and make more profit just for the fact you have a company versus personal or trust.
If you make 40-100% per annum on your money that equates to big dollars.
Please note: Something people don’t tell you about Family Trusts is they are not aseperate legal entity for borrowing. A company as a trusttee is but people don’t normally use these companies for business or investment so therefore can’t borrow as how can they say a $2 company earns $200,000 to put on a low doc declaration.
“Legal protection” as Family Trusts are touted as the bees knees for is only worthwhile if you have assets to protect.
If you can have $2m in property with a company but only $1m with a Family Trust which situation do you want if your property goes up 10%.
Unfortunately it takes many hours or rading and talking to advisros, legal, accountant etc.. to sift through the legal jargon to get to what works for your investment strategy.
At the end of the say you need to have the good knowledge about money, finance, tax, legal protection, property law, contract law etc.. because as the saying goes a fool is easily parted with his money. People are to advise you… only… not tell you what to do. however how can you decide what to do without the correct information.
That is why investing is not for the faint hearted it takes hard work.
Even if your income is reduced due to one person not working you still have options whereby you can borrow against the property (asset lending) or called a no doc loan. You do not need to provide income details and can easily borrow up to 70% of the value of your house. So you borrow on your own house and use those proceeds as deposit for the next house plus purchase costs. You keep a portion in reserve for loan repayments just in case your partner does not return to work in the short term
Its not just where you ad is but how your property is presented. Reading your description is difficult as too much detail.
The presentation of the text on the site… e.g layout is also important. Just because the info is displayed does not mean it makes any difference.I suggest you try a number of sites and call ads and ask them how they have found the response and also reveiw your ad. See what other ads seem to sell quick.
Seach for the most successful agents in your city and reveiw their ads on their company site or realestate.com.au
Also, you could consider spending some money to advertise in a major newspaper. What is the cost of $200 ad bill for a $600K property…. very little outlay.
An effective marketing presentation will not only attract interest but will enable you to receive a higher price for the property. When people are “wooed” they will pay any price.
Good luck
