[Paul B.Member@paul-b.Join Date: 2013Post Count: 70]

March 25, 2013 - 6:10 am

bnd wrote:

So my question is, do we have to sub-divide first? 

We are going to own both homes on the property anyway, is sub-divison only more important when on selling? 

 

If the zoning allows it then you are allowed to have two dwellings on the one lot of land. They would be considered 'detached dual occupancies' which may be subdivided into two separate lots in the future.

I am currently dealing with a DA for a local Council (NSW) where the owner wants to subdivide their block but they won't meet the minimum area requirements. However if they build a second dwelling, and then subdivide, then this is permissible as the minimum lot requirements are relaxed if there is an existing dwelling on the land.

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March 22, 2013 - 3:05 am

Hi Kara,

Interestingly enough we were engaged by Kempsey Shire Council to write their draft LEP. Unfortunately you just missed the boat with putting in a rezoning application under the exhibition period. This would have saved you alot of time and money.

In a nut shell, a rezoning application requires you to provide justification as to why the land should be rezoned. This is usually in the form of a Town Planning Justification Report which will give Council the necessary information to determine if the submission has strategic merit and can then put in a formal planning submission to the Department of Planning and Infrastructure.

It is not uncommon for fees to be in excess of $20,000. Fees are dependent on individual site merit. Being an industrial site you will require a contamination assessment as a minimum. Timeframe you are looking at 6 months minimum (more likely 12 – 18 months).

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March 13, 2013 - 2:24 am

Shape wrote:

Let them know you want to release some equity to invest into property – they will automatically ask you if you have found a place , as they would want to finance and lock you in for the 2nd mortgage as well

I'll provide you with a general run down that suits 70% of investors…however you should really obtain personalized advice rather than follow a generic general advice.

Baisc Steps

1. Valuation carried out

2. Equity release based on amount, LVR and valuation

3. Make sure they provide you with an SPLIT loan, meaning a "second" loan must be created and not just added on top of your PPOR!!  ( important)

4. Also make sure they provide you with an 2nd 100% offset account so that the newly released funds can sit in this account without occurring any interest and also it keeps it separate from your PPOR offset ( also very important)

^ Sometimes you can skip step 3 and 4 by using an LOC. ( but this can come at a cost and it's not always suitable) 

Thanks Michael. I will ensure that a split loan is set up with a dedicated offset account. I would be looking at borrowing at 90% LVR. What are the (general) pros and cons of a standard loan compared to LOC considering my circumstances.

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March 12, 2013 - 12:20 pm

Catalyst wrote:

Paul B. wrote:

Also grab a tub of spackfilla and fill in any holes before you paint! Well worth the extra couple of minutes effort.

I can't believe how many people neglect to do this. I saw a house once that someone had bought to flip. They hadn't prepared the walls AT ALL. Just painted right over what was there. Chunks out of the wall, and the paint was so thin you could see through it. Sat on the market for many months. All to save a few hours work and an extra hundred dollars in paint.

I would be lying if I said I didn't consider doing the same. Lucky for me I pulled my thumb out.

How good a paint job ends up really is determined during the prep.

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March 12, 2013 - 12:14 pm

Hi Michael,

Apologies for carrying this conversation over two forums haha. For everyone else's information; Regarding my circumstances, my partner and I are currently paying off a PPOR. We have built up some equity and we are looking to get into the investment game ASAP. I am therefore looking for an affordable property that has reasonable yields (to minimise ongoing outlay) and decent capital gain prospects over the next 5 – 10 years.

The reason I am interested in the CC market is outlined in my first post. I know the market has been flat on the CC for some years, but I am aware of some significant projects in the area that indicate increased employment opportunities and improved livability.

Michael, being a mortgage broker, how would you suggest I approach this with my bank (NAB)?

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March 8, 2013 - 12:31 am

Will be watching closely!

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March 5, 2013 - 11:07 am

Also grab a tub of spackfilla and fill in any holes before you paint! Well worth the extra couple of minutes effort.

[Paul B.Member@paul-b.Join Date: 2013Post Count: 70]

March 5, 2013 - 8:10 am

Sounds good ksun. Goodluck!

[Paul B.Member@paul-b.Join Date: 2013Post Count: 70]

March 5, 2013 - 7:44 am

Get on youtube and type in a few key techniques for example: how to cut-in walls, how to paint skirting boards, how to test if paint is water-based or oil-based etc. Just some simple guidance will save you a lot of heart ache.  The painting videos posted by bunnings will also give you a rundown of what supplies you will need.

Blue 3M tape is the way to go. Masking tape will peel the paint right off. Remember not to leave it on the wall for more than 48 hours otherwise it will peel the paint off too.

Another tip is to paint from the ceiling down. Also, paint window frames and door frames before walls.

Get in and give it a go, you can't really go too wrong (and this is coming from someone that struggles to hang a picture up). Crack a beer, crank up the ipod and enjoy!

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March 4, 2013 - 5:20 am

In NSW, generally a QS Certificate is required by Council to verify the development approval pathway. For example, if a project is going to have a capital cost in excess of $30 million, the the project is recognised as a regional development and is to be assessed by the State's Planning Assessment Commission, not Council. I can't see why a residential development of your scale would be required to have a QS Certificate.

I have no problem with an architect project managing a development such as yours. It seems to be a pretty standard residential application that any experienced architect should be able to manage. At my work we have in-house architects that regularly run with the DA process of their projects without referring them to us (planning department).

A word of caution: architects tend to overlook the legislative requirements of policy that might not be applicable to most projects, but are still fairly common none-the-less. That is where planners are worth their weight in gold, they will forsee any road blocks before you submit to Council.

If your project is within NSW, I would be happy to have a quick look at the legislative requirements applicable to your site and offer any advice.

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March 4, 2013 - 5:03 am

You still need to give short-medium term margins fair consideration because they will reduce the liklihood of your investment being a dud in the long term. If the figures don't stack up short-medium term then you are putting all your eggs in the 'long-term capital growth' basket which is risky.

I think when you tighten your figures up you need to consider if your money and effort could be better spent elsewhere. You sound like you are already playing the property development game so I assume this venture won't be your last? If this is correct, then have you considered how this venture will fit into your portfolio down the track?

If you are positioning yourself to have to cover shortfalls out of your own pocket then this will impact your options in the future. Try and look at it objectively and don't get carried away with the emotion of being 'gifted' a block of land.

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March 1, 2013 - 5:55 am

Council will rarely accept a stormwater design where runoff is discharged directly onto adjacent properties. As pointed out by Brazen, a dispertion pit would be an affordable solution.

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February 11, 2013 - 5:51 am

Check out the free suburb report from http://www.residex.com.au – that will give you some background from an investment perspective

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February 6, 2013 - 8:49 am

On the topic of claiming depreciation…

If you renovate an investment property, can you only claim the set depreciation rate per year for the renovations? Also, I assume you are unable to claim depreciation once the property is sold?

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February 6, 2013 - 4:35 am

Terry/Jamie et al.,

If I were to turn my PPOR into an IP does the interest on the loan from that point become tax deductible? I recall you saying that it is only tax deductible if the purpose of the loan was for an investment (which it wasn't, it was to buy our home).

What happens in this situations?

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February 6, 2013 - 12:55 am

Hi Tracee,

Generally speaking investing close to the CBD would be a safer long term option. Regional properties require a little more finesse in timing the market to see strong capital growth. I think all property types (houses, duplex, apartment, units etc) have their place in the market, its a matter of understanding who wants to live there and what would they need. As Steve McKnight said, see it as a problem solving exercise – provide people with affordable accommodation that services their needs.

There are many resources available online that give you a start in understanding residential markets. http://www.residex.com.au provides a free report for any suburb which includes demographic statistics and price trends for units and houses.

Although i am yet to invest in property, through my line of work I have seen first hand the benefits of government expenditure in regional areas and the impact that has on local prices. I am not familiar with Victorian government processes but in NSW I keep an eye on major project applications, ear marked land for future employment lands and State and local land use strategies. These give you a fair indication on where public money will be spent, leading to increased desireability and ultimately increasing house prices!

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February 5, 2013 - 1:04 am

Hi Kat,

Since no one has taken the time to help you Ill have a stab. Please take my advice with a grain of salt.

Regarding you loan on your PPOR (soon to be IP) – from what I have read it is best to convert the loan to IO with an offset account attached. The difference in repayments (between a P&I loan and a IO loan) should be placed into the offset account to reduce your repayments. The benefits of this are:

– The money in the offset account is readily available should you need it.

– You reduce the amount needed each month for repayments (through offsetting the interest).

– You are maximising the amount you can claim on tax.

I guess this strategy helps keep cash available to reinvest. 

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February 4, 2013 - 3:38 am

Keep us posted Shane! Some before, during and after photos would be great.

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February 2, 2013 - 3:31 am

JacM,

I got through a quote through AAMI for house and contents ($30000) + landlord protection for $1500. Does this sound reasonable?

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February 2, 2013 - 12:57 am

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