Investment property

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Cheers for response - finalising an IP purchase + refi of collateral security now (settlement a few weeks, yes there are typical issues with the lender forgetting to request one of the valuations), borrowing well less than finance limits so cautiously looking around at other options now in cluding international property (although I tend to focus slightly more on and enjoy equities a little more than IP).

Some commercial property looking interesting now, have a bit of space in the margin loan that covers any entry-level purchase for that
 
A lot of interesting thoughts here.

I'm certainly a novice from the perspective of choosing a property, but from a tax perspective make sure you get a quantity surveyors report on the investment property. Not cheap (around $600 mark), but would generally make that in your first tax return from cashless deductions (depreciation and capital allowances). The cost of the report can be deducted as well.

Other than that interest-only is good, especially where you have your own private home loan. Better off paying private debt where the interest can't be deducted.
 
Mofra said:
Cheers for response - finalising an IP purchase + refi of collateral security now (settlement a few weeks, yes there are typical issues with the lender forgetting to request one of the valuations), borrowing well less than finance limits so cautiously looking around at other options now in cluding international property (although I tend to focus slightly more on and enjoy equities a little more than IP).

Some commercial property looking interesting now, have a bit of space in the margin loan that covers any entry-level purchase for that
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Same

I prefer businesses over bricks and mortar but that "over" bias has cost me at times. I also have a negative view on gold but the few times I have gone there I have made $. Samantha, Equigold and Regis have been stellar and I have backed a private play in the Philippines which was bought for circa $500k looks like it will deliver 6m-8m oz au and at grades eq of 100+g/t.
 

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Yellow Feathers said:
The value of a property is subjective. It's someones opinion on what it's worth. The real value of a property is what someone will actually give you for it on the day. You know what is a tangible value of a property? The guaranteed rent coming in every week. $500 in your pocket is $500 in your pocket, not some make believe number that the property valuer gives you.
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The opening of this paragraph is correct; valuations are a subjective opinion (supported by a forensic analysis of comparable sales).

The rest of your paragraph is garbage. If the 'real value' of the property is what someone will give you for it on the day, then I, as a valuer, will lose a truckload of work in not valuing contracts of sale.

Your statement suggests that a new 63 sqm 2-bedroom CBD apartment that sold for $785,000 without a car park is its "real value" because some dude in China actually signed a contract for it. This is an actual example.

You might also suggest that the guaranteed rental is all that matters, but again, if you were to roll into a seminar and get naively seduced into buying a serviced apartment off a developer for a guaranteed rental income, at a yield of 5.75%, then don't start crying when they start re-selling at 7.5% and you've lost a hundred grand.

Subjective opinion, yes, but based on objective evidence and years of experience.
 
FIGJAM said:
You might also suggest that the guaranteed rental is all that matters, but again, if you were to roll into a seminar and get naively seduced into buying a serviced apartment off a developer for a guaranteed rental income, at a yield of 5.75%, then don't start crying when they start re-selling at 7.5% and you've lost a hundred grand.
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Looked at some student apartments last year, with an "8%+ yield" notice on the website.
One property was going for an 8.2% gross yield, I ask for documents - a massive 4.2% in strata/management outgoings!

The differences between gross & net yields can be staggering, without looking at restrictions on property use/upgrades etc.
 
Oops forget investing in Indo, it has just run 40% in 6 months.

Are we now facing the potential of another Asian crisis driven by a property bubble? Or do we have a few more years of grace ?
 
Wanted to start my own thread about how to become a millionaire through real estate investing but can't as i'm a newbie.

Wanted to know about investing/buying with loans against already owned property, which is being rented out. Also, getting those loans against that property with no deposit, keeping your already available money free to yourself to spend as you wish. Then, getting rental returns to pay the loan repayments, rates, and other general outgoings without touching your own spending money. How often does this really work?
 
alexkidd16 said:
Wanted to start my own thread about how to become a millionaire through real estate investing but can't as i'm a newbie.

Wanted to know about investing/buying with loans against already owned property, which is being rented out. Also, getting those loans against that property with no deposit, keeping your already available money free to yourself to spend as you wish. Then, getting rental returns to pay the loan repayments, rates, and other general outgoings without touching your own spending money. How often does this really work?
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if you know what you are doing you should be able to net 10% on rental meaning you should be positively geared.

most people are lazy and buy on a 2-4% rental yield.
 
Power Raid said:
if you know what you are doing you should be able to net 10% on rental meaning you should be positively geared.

most people are lazy and buy on a 2-4% rental yield.
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I'm seeing the average offering is 6% for the lazy and haven't really found any better.

But bringing it back to my main question, i don't see any way that these properties are going to cover your loan repayments and outgoings, nowhere near it. Yet there's so many schemes out there selling the idea that you don't have to pay a cent and every average Jo can do it, property on top of property on top of property.
 
alexkidd16 said:
I'm seeing the average offering is 6% for the lazy and haven't really found any better.

But bringing it back to my main question, i don't see any way that these properties are going to cover your loan repayments and outgoings, nowhere near it. Yet there's so many schemes out there selling the idea that you don't have to pay a cent and every average Jo can do it, property on top of property on top of property.
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One of the best performing investment portfolios is managed by a guy who went "near" bankrupt in 2008 backing property developments that got caught by tightening financing regimes.

The guy recovered and bought in a suburb in WA that is being rezoned from residential to 20 story developments. He targeted quality properties in the low $1m and "slaps" on extensions or divides rooms turning the properties into 7 bedroom homes. Further, rather than renting out the property he rents out the rooms at $300 a week which have a communal weekly cleaner.

I would not be comfortable with the amount of debt he has taken on but being positively geared is impressive
 

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Scotland said:
I don't mind the idea of building/buying a house to rent out and sell at a later date to make money.

The fact that our tax system encourages it is just ridiculous, though.
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worse

our tax system discourages investment thus most the appreciation on property is the land rather than improvements.
 
Power Raid said:
The guy recovered and bought in a suburb in WA that is being rezoned from residential to 20 story developments.
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Applecross/Mt Pleasant by any chance?
 
Lyyynnnchy said:
Thought it would have been Scarborough. Wouldn't have thought there was the demand in Applecross or Mt Pleasant for "rooms"
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Didn't think of scarbs. $300 a room sounds ridiculous. The Canning Bridge precinct is going to be unrecognisable in 5 years though.
 
Beerfish said:
Didn't think of scarbs. $300 a room sounds ridiculous. The Canning Bridge precinct is going to be unrecognisable in 5 years though.
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Yeah any property near that precinct that is development viable would have set you back millions even 10 years ago years ago. Scarboroughs a different story. You could have picked up 1000sqm blocks for under a million 5/10 years ago that now have development potential for 20+ storys
 
Lyyynnnchy said:
Thought it would have been Scarborough. Wouldn't have thought there was the demand in Applecross or Mt Pleasant for "rooms"
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500m from the train station to the city and close to curtin uni.

I don't know who he leases out to, but given it is such a full house and the price, I would suggest it is Chinese students. From a website in Beijing a place by the river would sound fantastic. They are also happy to pay a bomb and be crammed in.
 
Power Raid said:
500m from the train station to the city and close to curtin uni.

I don't know who he leases out to, but given it is such a full house and the price, I would suggest it is Chinese students. From a website in Beijing a place by the river would sound fantastic. They are also happy to pay a bomb and be crammed in.
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That's what I was thinking.

Norupwilson are building about 23 storeys on the corner where Thai Corner is as stage 2 of the building that's popped up on Ogilvie. I've also heard they've bought up the opposite corner as well..
 
Power Raid said:
500m from the train station to the city and close to curtin uni.

I don't know who he leases out to, but given it is such a full house and the price, I would suggest it is Chinese students. From a website in Beijing a place by the river would sound fantastic. They are also happy to pay a bomb and be crammed in.
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The problem with that is the Applecross and Mt Pleasant communities voice their concerns regularly to council. Combine that with a large percentage of them being people that are either retired, work from home or are a stay at home/mum dad means that houses can't be overcrowded without coming to the attention of authorities. If there's even the slightest raised level of consistent noise from the house or a tiny bit of clutter on the front verge then council will know about it.

That and it's not really that close to Curtain, or any other Unis for that matter.
 
Lyyynnnchy said:
The problem with that is the Applecross and Mt Pleasant communities voice their concerns regularly to council. Combine that with a large percentage of them being people that are either retired, work from home or are a stay at home/mum dad means that houses can't be overcrowded without coming to the attention of authorities. If there's even the slightest raised level of consistent noise from the house or a tiny bit of clutter on the front verge then council will know about it.

That and it's not really that close to Curtain, or any other Unis for that matter.
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Your right but he seems to get away with it.

Shipping containers as extensions, converting the garages into two room, splitting the master bedrooms into two rooms.

but hey, it works for him and it works for the tenants.
 
Beerfish said:
That's what I was thinking.

Norupwilson are building about 23 storeys on the corner where Thai Corner is as stage 2 of the building that's popped up on Ogilvie. I've also heard they've bought up the opposite corner as well..
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I don't know the streets very well but the IGA block all bar one building is owned by one consortium but under a few names. The Monadelphous building is another foot holding.

Moreau Mews is apparently the street to be on as this is going to be the "mall"
 
Power Raid said:
Your right but he seems to get away with it.

Shipping containers as extensions, converting the garages into two room, splitting the master bedrooms into two rooms.

but hey, it works for him and it works for the tenants.
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i hardly think he got approval for that. If you're worried about it tell council and they'll be on to it straight away
 
Power Raid said:
I don't know the streets very well but the IGA block all bar one building is owned by one consortium but under a few names. The Monadelphous building is another foot holding.

Moreau Mews is apparently the street to be on as this is going to be the "mall"
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Yep. I'm talking about the other end of that block towards Freo. Opposite Maccas.
 

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