Thread: Investment Property Advice

No matter how hard I try I can't think of a better use for that 70k than a new shed for me.

Originally Posted by Toolin Around

Could I PM you and go through it also.

Of course

Originally Posted by coastie

$70k wouldnt buy you a telegraph pole, let alone a property in Sydeny or environs (incl ACT)

It's not supposed to. I think you should read the post above yours regarding leverage. Nobody I know ever waited until they saved the entire purchase price before buying an investment property.

Originally Posted by rhancock

The best advice I'll offer is to take your time. Put your cash in a 6%+ bank account for a year and spend the time talking to as many people as possible, including here, but also including as many financial advisors as you can find. Find experts in your locality - real estate agents, property managers, mortgage brokers, tax accountants. You need to be able to get expert advice from people you know well enough to trust. Also read as much as you can - At least your local paper, the Australian, and if you can, the Financial Review too. Remember, your're already earning 6%, so you can afford to spend time learning, rather than risk your financial future by rushing into something.
Your best weapon is the knowledge you have in your head. !

Just be a little careful here. There is such a thing as getting too much independant advice, taking too long and buying the wrong thing. I've seen it many times. People come into the office who have been looking for a year ! What a waste of time. They often end up buying the wrong thing in my experience. A mate of mine did that. He ended up with the only real estate in Melbourne which went down in price over the past few years - an inner city apartment. He couldn't get a regular tenant while many others were still being built and for sale. He got out of it but lost over $100,000 in the process. I advised him to buy locally, at an affordable price where it was easy to rent out but he got all the good oil elsewhere. The one home I did show him has doubled in value since.

Everybody's an expert when it comes to real estate. If you want to buy a property keep it simple. Find the area you want (usually based on what you want to spend), check out the homes for sale and those which have been sold so that you have an understanding of the value in that area.

Originally Posted by kiwigeo

15% on the way in. 15% on fund earnings plus capital gains tax. From July 1st this year 0% on money taken out of fund providing you meet age criteria.

I don't think this is right.
For non-concessional contributions (personal after tax stuff like Doughboy's 70k) there is no entry tax. At least that's what I can work out from a number of fund sites I've looked at.
http://www.firststatesuper.com.au/Gr...eContributions

Originally Posted by Gumby

Everybody's an expert when it comes to real estate. If you want to buy a property keep it simple. Find the area you want (usually based on what you want to spend), check out the homes for sale and those which have been sold so that you have an understanding of the value in that area.

Advice doesn't come any better than that, and this is coming from someone who reckons free advice is worth what you pay for it!

cheers,

P

Originally Posted by Dan

I don't think this is right.
For non-concessional contributions (personal after tax stuff like Doughboy's 70k) there is no entry tax. At least that's what I can work out from a number of fund sites I've looked at.
http://www.firststatesuper.com.au/Gr...eContributions

But Dan, that means you've already PAID 30% or more on it in income tax! There just isn't the free ride that I keep reading about!!

Cheers,

P

Buy into a managed fund from here

Easier to get your money out if need be, and you dont have to worry about tenants breaking up your house.

Al

Originally Posted by Dan

I don't think this is right.
For non-concessional contributions (personal after tax stuff like Doughboy's 70k) there is no entry tax. At least that's what I can work out from a number of fund sites I've looked at.
http://www.firststatesuper.com.au/Gr...eContributions

I think you're right but super is definitely an area for financial advice. There are lots of other issues like concessions you can claim against any capital gains tax liabilities by plonking a certain amount into super. It's a minefield and best discussed with a good accountant, not in here.

Besides, I think he's too young to be putting that much into super. You can't touch it until you are 60 so it's a long way off to be locking it away.

Originally Posted by Gumby

Besides, I think he's too young to be putting that much into super. You can't touch it until you are 60 so it's a long way off to be locking it away.

Especially when he could be giving it to me. I am 60 and will be glad to touch it for him.

[Doughboy, please PM me your bank details. ]

Originally Posted by Gumby

Just be a little careful here. There is such a thing as getting too much independant advice, taking too long and buying the wrong thing. I've seen it many times. People come into the office who have been looking for a year ! What a waste of time. They often end up buying the wrong thing in my experience. (Annecdotal story about Gumby's mate deleted...)

Hmm... I do agree and I don't.... I think a year looking for property is a waste of time. I think a year spent researching investment options, finding experts, finding a real estate agent whose expertise you are willing to trust with your financial future...etc... is time well spent. It may not take that long, but I don't think it should be rushed.

Everybody's an expert when it comes to real estate. If you want to buy a property keep it simple. Find the area you want (usually based on what you want to spend), check out the homes for sale and those which have been sold so that you have an understanding of the value in that area.

Definitely, everybody's an expert, and their advice is worth what you paid for it, and often less than that. I agree that finding an area and sticking to it is a good idea, because then you can become an expert. Your choice should be based on forecast growth in property prices (from a trusty crystal ball) combined with low rental vacancy rates. - often inner city, but also fringe areas about to explode - in Brisbane, Logan, Redcliffe and Deception Bay and Springfield are good options at the moment. Another good thing is good public transport - train stations especially. Remember you have two requirements - a good supply of tenants, and high growth in property values.

All of the above is worth about 8% less than you paid for it.

See this is what I was lookong for... not a you should or a this would be best for you just some good ol' fashioned advice and thoughts.

Those of you who want a piece of the 70K can wait till I reach that millionaires row.

I would rather not tie it up in super at this stage as I want to be able to access the money if needed. Shares are not really an interest to me..... I just have not considered it that is all. I would like to go down the real estate line. I just feel that property is a 'real' investment. Race horses break down and shares are volatile.

I know the area I would like and I think 450K is a fairly realistic ballpark figure. DHA interests me but I am not sure if that is really what we want.

When I went through Uni, a demographics lecturer and an economics lecturer both strongly suggested property investment for my generation, and it's worked pretty well for me.

However, if I'd bought shares, I wouldn't have to pay:
* council rates
* insurance
* land tax (wipes out the entire income from one house, in my case)

My tenants have generally been pretty good, but there was one set I passed over to a managing agent after they got way behind, and wouldn't respond to letters, phone calls, faxes etc.

Cheers,
Andrew

There is nothing new in this advice, but here it goes.

The land is the appreciating part, the building the depreciating part. Just keep that in mind when you are buying that house you are going to rent out and not live in. I've seen people live in hovels, so dont buy based on what you would like to live in.

Originally Posted by Dan

I don't think this is right.
For non-concessional contributions (personal after tax stuff like Doughboy's 70k) there is no entry tax. At least that's what I can work out from a number of fund sites I've looked at.
http://www.firststatesuper.com.au/Gr...eContributions

Youre right. Sorry I should have specified this. I was referring to pre tax contributions. Post tax contributions don't attract 15% entry tax but earnings within fund are still taxed 15% plus Cap Gains Tax.

The most effective way for people on medium to high tax bracket to save for retirement using a super fund is by salary sacrificing into same.

As someone has already posted, if considering the super route then get some advice from a financial advisor on same. The rules can be quite complex and theyre constantly changing. For those considering a self managed super fund do your homework, be aware of the costs involved and be ready to become an unpaid employee of the ATO.

My son is a mortgage broker and he is working seven days a week refinancing smart arses who thought they could afford properties,then fell over when something happens to them eg marriage break up,redundancy etc etc