Hi There,
Recently descided it was time to invest and got my head around negative gearing then a friend sent me Steve McKnights investing book and I changed my strategy. It took me years to pluck up the courage to borrow for investment and finally I did it. SO I am ready to go and have found a property with a three bedroom two bathroom home on the back on the property which is 920 sqm.
My thoughts were to subdivide and sell off the front block and have been told cost for a land surveyor and other expenses would be around 25-30K. Then there is stamp duty on selling the land and CGT to be considered as well as the morgage repayments for the year.
Just wondering if its worth it, the asking price is 350-400K. I am guessing the small block might fetch $130 but thats an assumption. I also think this sale by tender approach will mean our lower end bid wont be accepted.If I wanted to invest 300K would a subvision be a realistic goal?
If you do the numbers and there is a profit then do it …
If you do the numbers and and they show a loss then dont do it …
List ALL the costs … get them checked by an accountant … make a decision then move on …
CGT is a good thing because it means you have made a gain …
If they numbers don't work don't rework the numbers …
Hello Mazstar,
I am like you and my strategy changed a lot after reading Steve’s book (he really slams negative gearing doesn’t he? he he)Now sounds like your ready to go, but might be worth taking a breather and doing some more research, asking yourself questions like:
1. is the local council used to subdivisions or am i going to be coming up against a lot of red tape.
2. Have i got a team ready, should i get a valuer in to give me advise on what it realistically would be worth now and after the sub-division.
3. sounds like you needs to speak to some builders to see how much it costs to build a house out the back, and the separation of utilities etc.doing alittle more research before you buy may just give you alittle peace of mind.
it’s exciting you are thinking doing a subdivision!
Thanks Joanne and wealthforlife for your replys,
I have been researching for 2mths now, everyday, trying to find a positively geared property and am yet to find one I can confidently say this is it. I am not disheartened tho as each new possibility comes closer to what may be suitable.
I dont think this subdividable property will fit the criteria and I just wonder for an investment of 300K if there is any in Melb-Victoria that are, if so where? Thats the big question I guess.
I have started looking at Bendigo which is a bit of drive from my place but its looking more positive than Frankston and closer suburbs.
I think Negative gearing is great if you already love your work and your earing so much you need a good tax deduction, then it makes sence.
Cheers,
Mazstar.
Hi Mazstar,
just wondering how you went/are going with the prop in bendigo I am in almost the same situation as you were back in december and would love an update as to how the experience has been?Thanks
Daneo
You stated you would have stamp duty when you sell, but that is incorrect. Stamp duty is charged on purchase not on sale.
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