Forum Replies Created
If the builder offers the services, then I would take them up on it. Most of the time they don’t offer things like painting, landscaping, fencing etc so you have to sort those things yourself anyway. Like you eluded to – time is money, get things done in the least amount of time, instead of trying to pinch a few pennies.
Stop looking for ‘bargains’ as they don’t exist – instead, look at ways you can add value and invest for the long term, as that is where the real results exist.
Costs start from around $70,000 and yes it needs approval and you will technically only be able to use it for family members associated with the main dwelling – ie your granny.
Hi Karen, shame it didn’t work out, but yes certainly you can contact me – I’m in WA.
I’m not sure why you think that once your home is paid off it will only be then an asset? Is this because it is no longer subject to loan repayments? You will still have expenses without any income – hence the liability label. But saying that, you do need to live somewhere. However in the meantime the interest on you repayments and expenses are not tax effective.
Renting your existing home may be beneficial (other than paying a lower net rent) as you can tap into a host of available tax deductions and it may be possible to improve your cash flow, facilitating further investment property.
I’m not an accountant nor is this advice, DYOR!
Not sure where you are located, but I should make sure that you are aware this is for Western Australia – it may be different in other states.
You might be able to reduce that timeframe by a few months, but I like to play it safe and not risk your investment unnecessarily, so I always build in a contingency timeframe to allow for any delays and if it happens earlier – bonus!
The reason it takes so long is due to the number of government agencies involved and the sequential nature of the steps. Generally speaking, it takes on average three months to obtain a conditional approval, another 6 months to satisfy the conditions that are imposed and another 3 months to obtain titles once you have satisfied conditions. It is the satisfaction of conditions that can make it short and sweet or long and painful. This is where experience pays to know what conditions are appropriate and how they can best be satisfied. I have seen many developing owners fall over big time because they underestimate the importance of this part of the process.
To get a title (the rights to specific land and the thing you need to sell) you need to provide all services – water/sewer and power are standard on every subdivision, there might be other requirements such as constructing access leg, geotechnical reports, retaining and earthworks, demolition, contributions towards common infrastructure arrangements and/or public open space and other aspects that come up depending on your location. Ie – it must be ready to build for either you or a new owner.
Lot sizes all depend on what the local government stipulates in their planning scheme – different for every Council. If you want help on a specific property you may email me [email protected]
Cheers
RyanTry thinking of your home as a liability as opposed to an asset.
In WA, you can always obtain a retrospective approval, I’m sure this is the case for other states.
Each Council is different when it comes to the need for various types of approvals – always best to check first and comply.
Refer to 6.5.3 A3.2, this states that car parking spaces be in accordance with AS2890.1 (Australian Standards for design of car parking and the like).
I can tell you that the minimum internal dimensions are 5.4m x 5.4m for a double garage.
If the ‘Acceptable Development’ provisions don’t result in the best outcome, go for the ‘Performance Criteria’ which is based on the outcome of the specific application, rather than prescribed provisions which apply otherwise.
For example, see 6.10.3 ‘Essential Facilities’, you will see that A3.1 contains the provision for 1.5m, where P3 contains the performance criteria which doesn’t require a minimum dimension, rather it requires an adequate, suitable area for storage – you can then put your case forward to your friendly local government planning officer to assess.
Ryan
Covenants do not control land use in Australia – the planning system does.
Generally covenants are made by the original subdivider because they would like a certain type of development outcome and they try to get around the planning system. This helps their marketing because they can say to prospective purchases that all future development has to be carried out in accordance with the covenant.
In WA, there are cases where covenants have been made on properties that are inconsistent with local planning schemes. There are legal provisions that allow covenants to be modified to make them consistent with the local planning scheme provisions.
I’m not sure about NSW, just check with the local government.
I’m in for the Perth gig
There are no guarantees in life. Medina is one of the worst suburbs in Perth and if you paid over the top because you wanted to cash in on the boom like everyone else and reap the benefits but paid too much in the process, well then you have no choice but to accept the consequences. Having said that, I’m 100% sure that if the people who bought property in 2006/7 held their property for the long term and were sensible with their expenses, they would still make money.
As for the income point you mention, people who apply for finance are made aware they are taking on a commitment for 25+ years…. take responsibility.
Yes all very good stuff thanks T!
So what you are saying is to limit directors exposure to guarantee as this will avoid surplus capacity being chewed up unnecessarily – like having your loans cross collateralised.
In regards to developing property with others who are not family (ie syndicate style), could you have your beneficiaries as directors in the company acting as trustee which would allow a discretionary trust (based on your previous post, its safer) but at the same time giving certainty to each beneficiary that they will get an equal distribution because it requires their approval as a director in the company who is acting as the trustee.
Or, is it just easier to setup a UT?
I would have thought that limiting the directors (whether the number of them or their ‘calibre of credit’) could mean that the financial institution will refuse to accept the guarantor and therefore refusing to give finance?
Thanks again for your informative response Terry. In regards to your first paragraph – if the trustee is a company and gets sued – is the director personally liable and his/her assets? Or is liability limited to company owned assets only?
In regard to second paragraph, first point – can you explain what a guarantee is? I saw a thread about guarantee vs debt (you and Steve McKnight positing) It seems that giving a guarantee will/can affect borrowing ability – is that right? My second part of my question really relates to why does the trustee give the guarantee? Do the beneficiaries of the trust form part of that guarantee?
Cheers
RyanThanks guys, appreciate the response. So just to confirm – this would apply to Unit Trusts as well? And I guess if the trustee was a company, that company should also be created prior to making an offer?
Can the Unit Trust allocated units be easily transferred amongst the unit holders after it has been setup?
Thanks Terryw for the information.
Cheers
RyanBrisbaneAndy wrote:Going with this setup it's unlikely I will own anything again in my own name except for future primary residences.When purchasing a property do you use a new trust each time? And do you create a trust prior to making an offer or once an offer has been accepted? In that case, what name do you specify on the contract?
