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This is interesting as I am considering buying the GC before the commonwealth games too.
Some things I am considering:
– With all the new properties going in to house the athlete will this create a over-supply?
– Is surfer's still oversupplied and does that or will that affect southport?
– What areas will increase in value due to access to new public transport (the tram)
– Will population in the GC grow after the games?
A lot of things to consider. Sorry I don't have an answer for you.
Looks like it could be a good opportunity and would bring more people into the area, but will that simply be countered by an over supply of the new housing being built?
Ryan McLean | On Property
http://onproperty.com.au
Email MeYou can calculate it yourself but it is going to be a PAIN IN THE ASS if you don't know what you are doing.
This is because a lot of things are depreciated at different rates.
For example, floorboards are going to depreciate slower than a whitegood like a dishwasher or a fabric like curtains (they get dirty quickly!).
Depcreciation is generally based on how long the item is likely to last for and there are tax laws around how quickly you can depreciate items.
There are also two types of depreciation. The is a fixed depreciation (not the real name sorry) where you can claim the same % of the purchase price each year (eg. 5% on $5,000 in year 1, 5% of $5,000 in year 2 etc) and then there is accumulative depreciation (again the wrong name sorry).
So year 1 might be 20% of $5,000, but then in year 2 the item is now only worth $4,000…so you would claim 20% of $4,000.
A scrapping schedule is a one off event that is recorded when you destroy something to replace it with something new. If there is remaining value greater than that you have already depreciated then you can most often claim it as a loss.
Hope this helps. For further clarification I have created some articles on these topics
Depreciation – http://positivecashflowaustralia.com.au/claim-depreciation-investment-property/
Scrapping Schedule – http://cashflowinvestor.com.au/blog/what-is-a-scrapping-schedule-and-why-should-i-get-one-done/
You can get a "quantity surveyor" to create both a depreciation schedule and scrapping schedule for you. Some even give you a guarantee that you will save more in tax than you pay them in fees. It isn't super expensive to get done.
Ryan McLean | On Property
http://onproperty.com.au
Email MeAs Terry said my general understand is that Capital Gains Tax is paid of the increase in value on the property minus associated costs (eg. selling expenses).
What you pay depends on
1. What percentage of time it was an investment
2. What tax bracket you are in.
So if (as Terry said) you profit $34k after associated costs then you next need to look at how long it was an investment for
100% of the time – Then the full $34k is added to you annual income
75% of the time – $25.5k is added to your annual income
50% of the time – $17k is added to you annual income
25% of the time – $8.5k is added to your annual income.
Next you need to look at what tax bracket you are in.
The first $18k you earn in a year is generally tax free and any income over $180k is usually taxed at the highest rate (I think 45% + medicare levy etc).
So now its time for you to go away and do the figures.
Hope that helps.
ps. Always get professional financial and taxation advice. This is not to be consider 'advice'
Ryan McLean | On Property
http://onproperty.com.au
Email MeI would also meet a couple of other agents and get their quotes as well.
Different agents believe properties are valued at different prices. Their fees also vary widely.
If I was you I would interview
1. Someone that was recommended to you
2. A top performing agent from the primary real estate business in the area
3. A top performing agent from the 2nd best real estate business in the area
Ryan McLean | On Property
http://onproperty.com.au
Email MeHave you considered a subdivision and then simply sell the parcel of land instead of constructing a house yourself?
You could potentially use the profit from the sale of the land to buy another property (as long as it doesn't devalue your existing property as there will be less land).
That way you could avoid all the construction costs and headaches and just buy another property with subdivision potential?
Food for thought.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHey Luisafur (is that a play on Lucifer?…apologies if it isn't),
There are so many things you can do to get started
– Read property magazines
– Read property books
– Save your deposit
– Visit a mortgage broker to find out how much you can borrow
– Visit open for inspections to get a feel for property investing
– Join a mastermind or visit a property group
The biggest thing (I think) is setting a goal. For me that is financial freedom before my 35th birthday (10 years). Work out how much you need and start to work backwards.
I am a big fan of having an investment plans and not just investing willy-nilly.
That may be positive cash flow properties, it may be development, it may be capital growth or subdivision. Up to you and what you think suits you best.
Ryan McLean | On Property
http://onproperty.com.au
Email MeIt sounds like a ridiculous cost because you could get a house built for so much cheaper in a capital city.
Some reasons for high cost:
– High costs in transportation of materials
– Labour more expensive as less people willing to work out there
– Higher margins…they can charge it because there is no one else
– Subcontractors – Harder to get subcontractors at late notice as there are less of them. So they may cost more.
A kit home could be a good solution. Did you know you can also buy old pre-built homes.
Like if someone wants to demo the home to build a new one they might just sell it off instead. You can buy them really cheap sometimes and then you just have to pay for transportation and installation.
Would be worth looking at buying one as close to the location as possible. Or in the closest capital city (eg. Perth or Darwin). You wouldn't want to buy one from Sydney.
Ryan McLean | On Property
http://onproperty.com.au
Email MeI look at Bitcoin like it's the latest "hot stock".
The fact that it has hit the mainstream potentially means that the rich people have already made their money in it.
Bit coin is a very interested currency and hard to predict what global demand for it will be unless you know a lot about it.
Truthfully, if you want to learn about Bitcoin in detail and become a savvy bitcoin investor then I think it makes sense to sell your property for Bitcoins. But if you don't understand the currency then I think it would be better to sell for cash and focus on making money the way you know how.
There are so many 'get rich quick' stories at the moment about people who's bit coins are worth millions. If it sounds too good to be true it probably is.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThanks i-smsf for the recommend
I have a podcast called Positive CashFlow Australia. There is about 15 mp3's up there now (ranging from 5-20 minutes) but the idea is that every single blog post we create will also be turned into a YouTube video AND a podcast.
just search for "positive cashflow Australia" in iTunes.
there is also "CashFlow investor" which is my old one and you can listen to those too (audio quality not the best, but bearable)
If you don't have iTunes I should be on Sticher Radio soon or you can stream the MP3's directly from the site http://positivecashflowaustralia.com.au/blog
hope that helps
Ryan McLean | On Property
http://onproperty.com.au
Email MeRobbieP wrote:Thanks Ryan, i agree, it is very good..Did you end up taking a monthly subscription after the inital 14 day free trial?
Their system has changed now. There is a 7 day trail period before they start billing you. But you really only get 6 days because if you sign up at 10pm on Wednesday night then they count that as 1 day even though it was only 2 hours. So be careful of that
WHAT THE TOOLS DOES
The tool acts like Google for the property market. By that I mean it indexes all the listings and then allows you to search for keywords within the property listing. This is where the value of the tool is derived.
So if you want a property with a granny flat you can search for "granny flat" and it will show you all listings in Australia that use the term granny flat.
You search for positive cash flow terms like "11% rental yield" or other stuff. Or you can search for discounted property by using terms like "discounted" "recently reduced" "all offers considered" etc.
OTHER STUFF
It also gives you access to analysis data of the site. Stuff like previous sales history, previous rental history, previous listings, comparable sales etc.
TRAINING
They also have training modules but I never got into them, so can't comment on whether they are good or not.
Hope that helps
Ryan McLean | On Property
http://onproperty.com.au
Email MeCreasy23 wrote:- what is the optimum amount you should have in your super before looking into this?
There is no "optimum amount" that you should have in your super. It is about balancing the rewards of managing your own super with the extra costs of running your own super.
Because costs are higher people without much money in their super will often lose any gains they may have received through the increase in expenses
Creasy23 wrote:- If over time that property is paid off by rental and additional super, are you able to sell this property and using this cash purchase a property of higher value? (we are both 30 so still have at least 30 years in the workplace)
I don't see why this would be an issue. I don't believe there are any laws that state that if you buy a property in your super you have to own it forever. Just as you might sell and buy different stocks the same can go for property in your super.
Obviously the numbers need to weigh up though.
I'll leave the more technical questions to someone else to answer.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThe art of negotiation is that each side needs to feel they have gained some ground in negotiations.
Going in at $225k means you are unlikely to get it for $225k.
If you are making a lowball offer I suggest making it and then providing justification for your lowball offer.
Discuss comparible sales, issues with the property that need fixing ect. Don't just make a lowball offer and hope for the best.
Then when making a counter offer perhaps discuss your financial situation and that you are willing to stretch a little bit further.
Would you pay $240k for it or is $235k your absolute max? Would you pay $236k? It's important to know these things before negotiations so you know when to walk away. Some sellers just won't budge.
It is hard to say exactly how much to offer to begin with as I am not familiar with the property or the area or the agent.
Good Luck
Ryan McLean | On Property
http://onproperty.com.au
Email MeI like Mark's idea how the carpet isn't all connected so you can easily upgrade one room if you need to.
I have young kids and have lived in many rentals and while lighter carpet tends to look better to begin with (says my wife) it gets dirty pretty quickly and therefore needs to be replaced quicker.
Turns about carpet isn't meant to have baby food smeared all over it
Ryan McLean | On Property
http://onproperty.com.au
Email MeIf you don't want to buy positive cash flow property in rural areas why not look for property in capital cities either with a granny flat or that you can build a granny flat on. This tends to spike your rental yield and can push you into a cash flow neutral or cash flow positive position if done correctly.
The key is to understand your own financial goals. What you want now and in the future.
Can you afford to negatively gear and live off beans for the next 10 years until you can cash in on your properties? I know I could but my wife would kill me if we were super poor for a long time and thus I wouldn't be around to enjoy the profits anyway.
It's about balancing now with tomorrow and being proactive. Work smarter not harder
Ryan McLean | On Property
http://onproperty.com.au
Email MeI am in agreeance with what most people have said. If you are a one income family you are going to put yourself in a lot of danger by buying a $700k house in Melbourne. My guesses are your mortgage would be much more than you are currently paying in rent.
Speaking with a broker like Jamie and see what your options are. You might want to look at trying to get into a cash flow neutral zone where the properties aren't costing you any money.
As someone has already said "you don't want to be a forced seller".
ps. There is always the option later down the line to sell off some of the smaller properties to buy the big house in Melbourne if that is what you really want
Ryan McLean | On Property
http://onproperty.com.au
Email MeIf you are new to this I would definitely advise getting strong professional help.
It may be worth speaking to a broker (there are many great ones on these forums) about your financing options because it seems that is the part you are most concerned about.
Hard to make any decisions without first understand how much money you can borrow.
You might have to go with option #1 if you can't secure financing for the H+Ls yourself…which almost makes your decision for you.
Ryan McLean | On Property
http://onproperty.com.au
Email MeAs long as the purpose of the loan is for investment purposes it should be tax deductible even though the loan will technically be secured using a different IP to the new one you are buying.
If your borrowing money to go on a holiday then you might have some issues
Ryan McLean | On Property
http://onproperty.com.au
Email Mejmsrachel wrote:You would be better off roughing in plumbing and electrical in week 2 well before painting and patching.Agreed much better to do electrical and plumbing work done before you patch up all the walls. Just incase new holes need to be made.
The easier the access for the plumbers and sparkies the easier it is to get done.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHere's Nathan Birch's video on how to buy 10 properties quickly. Hope it helps
http://www.youtube.com/watch?v=PetqrCQqAg0&feature=share&list=TL3HGzMuz0yFL_6nwbfXR8UU_vCqT7bgOF
Ryan McLean | On Property
http://onproperty.com.au
Email MeHopefully things will go through for you at 95%. I know how it feels when you aren't getting much information back and you don't know exactly what's going on.
My fingers are crossed for you also and I hope it will be a good investment for you.
Will it be positively geared?
Ryan McLean | On Property
http://onproperty.com.au
Email Me
