PROPERTY INVESTMENT

Yes... do it!

Ed

It has it's risks and benefits.

You should enjoy reading this article which I printed out this morning.

http://www.realestate.com.au/review/jun ... rowth.html?

Steve

Without capital I used the equity in my home. Interest only mortgage, fixed rate.

Just make sure you can afford the net outflow after tax savings. If you are going to renovate you have that lead time (plus costs) until it's complete while your new property is not generating income.

Now is a great time to buy... just make sure you buy above the high water mark after the poles melt!

And I mean it - the only barrier is yourself... after you make the move it is really easy.

I have no regrets - except I should have done it sooner.

I hope that helps.

BTW - I live in Melbourne and bought in Robina on the Gold Coast.

Ed

Yes we saw the property first. At the time I was doing a lot of work there. I looked at what area appreciate more and Gold Coast seemed ready to boom... well I missed the early part of the boom but got in for the aftershock and it has done well.

We only bought for investment, and a purchase in another state spreads the risk... Also allowable as travel on the tax

I guess renovating would not work well in another state - but maybe it would work for you in Italy!

I would be happy to do it again.

Ed

Be very-very careful with budgeting!!!

The paradox in Sydney at the moment is that you are getting in loss by renovating!!!
You pay about 60K extra for the privilege to renovate a house!!! Don’t believe me – go and check yourself.

Just because it’s a run down house or the worth house on the best street it does not mean you will make money by fixing it. Anything that is called ‘renovators delight’ in brings so much attention from prospective buyers – the prices just skyrocketing. People probably watching TV too much.

I’m doing interstate projects at the moment - one in regional WA and I just about to settle on another in SA. This is a booming area and problem that I’m facing – it’s very hard to find a traders. Prices are quite high too. But when you see the property prices claming up the way they do – it calms you down a lot.


My tips for reno:

Spent lots of time researching the area

Don’t do what you like – do what market wants. Ask real estate agent what sort of renos are the easiest to sell in the area – and then just make a prepay like that.

Try to look for bad or tasteless renovations rather then “renovator’s delights”. They are priced modestly and they got very little attention on the market.

Work backwards – decide what margin, how quick and what cash-on-cash return you want to achieve then work out the target property price range.

Spend lots of time budgeting, planning & scheduling the project. Ask someone who was successful with renos to help you to crunch numbers.

I’m usually asking for a long settlement period – 2-3 month. This gives me time to prepare the project and select the traders before settlement and I'm not charger any interest on it.

Hi Michelle,

Heard that if it's not your residential property, you need to pay capital gain tax when you sell it. So you might also need to consider owning it for at least 12 months before selling it to save some tax. That's for NSW, not sure about your state, might want to check with your accountant first.

EDIT:> spammer was removed by mods. Thanks guys.



Please remove this spammer & delete their account.

This is the 2nd time they have spammed their marketing scheme.

thanks CN!!

Yes Ofcourse, the first and one of the most important things in this system is to ensure that one makes profits, it is essential the purchase price is massively under market value. This means some 50% to 70% under market value.
The first thing that one asks in this case is, "Who on earth will sell you such a cheap property?"
Well we are speaking of rehabilitating a property, which in turn means that the property is not in a very good state in the first place and this is the reason that one would sell for far below value. Some of these properties are literality dilapidating, derelict or have been neglected or abandoned for so long that re-habilitation of the property and the sale of such at market value is where the profits are made.
In simple words, this would mean that the purchase price is not low enough. When you add to that the costs of improvement and then try to sell at an even higher price, you may not be able to attain the selling price needed to make a profit, which may put the investment at risk

with capital gains in victoria if you live in the property for 3 months you dont pay any taxes so worth changing your address.
if you sell as an investment property then you pay 50% tax on your profits if you sell in the 1st 12 mths but only 17% tax if you sell after 12 mths.
keep in mind if you buy and plan on renovating it pays to move your address and make this your principle place of residence. it is a loophole in the system and a bit of a hassle changing drivers licences ect... but to be able to sell on very quick it is totally worth the effort.
keep your renovations simple dont put in any gadgets you might like treat it as a buisness not personal. personal touches cost money and will cut into your bottom dollar,redo kitchen and bathroom but just paint bedrooms and lounge new carpets are only a necessity if the old ones are really bad you may get away with a steam clean.
clearing gardens and making them low maintenance is a must and so is a garage if there isnt one.
good luck michelle we made 41 grand on our 1st reno and only spent 7 grand so it can be done but its very messy and we done all the work ourselves.
we are now building with the profit from the reno so hopefully in 5 years we will be millionaires thats the plan anyway it will happen