澳洲Australia property very Very Confused?? Need Opinions | Sydn


在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m


All,

I am currently unsure as to what is the best outcome for me at this stage.

Current Situation:

PPOR:Loan $$415K
Value: $540K (Land component $499K)
Loan Type: Principal & Interest
Description: It's a run-down house on a 600sq m land

I am currently confused about 7 different options:

(A) Take a construction loan of $270K and build a house so add $270K to my PPOR Loan ( $270K = $220K (Fixed contract with builder + $10K demolition + $20 fencing/driveways/landscaping + chopping tree ($2K) + Carpets ($3K) +$15K ( reestablishment survey costs e.g soil tests/slabs etc)

On Completion Value: $800K from the bank

(B) Rent my PPOR and knock it down later ( when???) and get the tax deductions

(C) Knock down and build 2 townhouse for $600K ( Rent 1 and live in 1)

(D) Knock down and build 2 townhouse for $600K ( Sell 1 and live in 1)
Townhouses are going for $600K - $700K in our area

E) Knock down and build 2 townhouse for $600K- Construction Cost ( Rent both and rent myself)

(F) Sell it with/without plans & permits & keep the profit ( don't know how to calculate: If it sells for $575K and I have a loan of $415K, how much will I effectively get into my pocket)

(G) Sell it as it is put that towards another investment & rent myself

I am really stressing out as I would like to make a decision which I won't regret at a later stage. I need some opinions before i sit down with my wife to make an informd decision


Your opinions/feedback will be appreciated

Meanwhile if you need any additional info, please let me know  

评论
What are you wanting to achieve?

Are you wanting a new PPOR on the same land either as standalone or one of two townhouses?

Are you wanting to keep the property as an investment?

what are your goals?  

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Thanks for your response.

At this stage, i'm very unsure as to what i would like to achieve out of this. The key thing I'm looking at is to understand what is best for me Financially keeping my emotions aside.

jrc said: ↑
What are you wanting to achieve?

Are you wanting a new PPOR on the same land either as standalone or one of two townhouses?

Are you wanting to keep the property as an investment?

what are your goals?Click to expand...
 

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(b).

And keep buying other IPS in the meantime, or make a significant dent in the debt.

Dont attempt subdivision until you have some experience or JV who does, and dont build a big house to live in with a whole whack more non deductable debt..  

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Hi

Until u have a better idea of what u want to achieve it will be hard to put a plan in place to make that happen.........

As part of ur research have u yet worked out that all ur options are implementable with your current resources ?

ta
rolf  

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Begin with the end in mind

RE rocks said: ↑
All,

I am currently unsure as to what is the best outcome for me at this stage.

Spend some time thinking about where you want to be in 10 years time. Chunk down the actions you will need to do in five years, then the next five years to be where you want in that decade.

Looking at things short term sometimes fries our brains and we can become over-whelmed. There is some truth in the saying that.......people over-estimate what they can achieve in one year, however completely under-estimate what they can achieve in a decade.


Current Situation:

PPOR:Loan $$415K
Value: $540K (Land component $499K)
Loan Type: Principal & Interest
Description: It's a run-down house on a 600sq m land

I am currently confused about 7 different options:

(A) Take a construction loan of $270K and build a house so add $270K to my PPOR Loan ( $270K = $220K (Fixed contract with builder + $10K demolition + $20 fencing/driveways/landscaping + chopping tree ($2K) + Carpets ($3K) +$15K ( reestablishment survey costs e.g soil tests/slabs etc)

On Completion Value: $800K from the bank

IMO $270 K won't get you very much house and if as you state the land is actually worth circa $500 K, you are likely under-capitalising on the dirt. Care to share what suburb your PPOR is in?

(B) Rent my PPOR and knock it down later ( when???) and get the tax deductions

Could be a good short term initiative to get some tax deductibility to your loan and it is generally cheaper to rent in the area you wish to live in that to buy (and have a mortgage) there. In the interim you can then take some time to clarify which path of the others you include below may appeal to you and get some knowledge on the process involved in doing the development. Do some reading...ask more questions, etc.

(C) Knock down and build 2 townhouse for $600K ( Rent 1 and live in 1)

Some inconsistencies here. A house will cost $270 K yet a town house will costs 300 K apiece to build. :confused:

(D) Knock down and build 2 townhouse for $600K ( Sell 1 and live in 1)
Townhouses are going for $600K - $700K in our area

E) Knock down and build 2 townhouse for $600K- Construction Cost ( Rent both and rent myself)

If you are comfortable with renting, this is what I would do to maximise your deductions and capture the instant equity you establish by adding such value ;)

(F) Sell it with/without plans & permits & keep the profit ( don't know how to calculate: If it sells for $575K and I have a loan of $415K, how much will I effectively get into my pocket)

(G) Sell it as it is put that towards another investment & rent myself

I wouldn't do this as you will have higher entry costs into the nxt investment. Building two new boxes as well as commanding a premium rent for the newness of them, you will have a motza of depreciation to claim as well.

I am really stressing out as I would like to make a decision which I won't regret at a later stage. I need some opinions before i sit down with my wife to make an informd decision

Don't stress. In the scheme of things we aren't dodging bullets, have hot/cold running clean water and all the amenity, safety and freedom that living in this great land entails.

You really need to spend some time, working out what you both want as I indicated earlier.

No one can make you decisions or give you advice here. It is merely opinions that we can offer to help you along the path you wish to take.



Your opinions/feedback will be appreciated

Meanwhile if you need any additional info, please let me knowClick to expand...

You mention in another post that keeping emotions aside (a little hard when a PPOR is involved), the best thing you seek is a prudent financial decision. Again I would ask.....to what end?

Clarify this with your wife and don't rush. Work out what you both want and work backwards to plan the necessary steps.

Good Luck RE :)
 

评论
Player

(C) Knock down and build 2 townhouse for $600K ( Rent 1 and live in 1)

Some inconsistencies here. A house will cost $270 K yet a town house will costs 300 K apiece to build.Click to expand...
Townhouses would be dearer because of Council section fees 20K, higher architect fees eg. 2 buildings instead of one, may have to be double storey instead of single story, and strata costs up to 10K :D

Sorry couldn't help myself :p


Sheryn  

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My advise for what its worth. (well this is what we did).

1. Over the next few years pay off what you can on your PPOR mortgage. Over this period, loan goes down and value of PPOR increases.
2. If your wife is open to the idea, don’t spend any money on the PPOR.
3. Then buy an investment property (preferably similar to what you currently have) with 110% loan and interest only. Again concentrate on reducing the PPOR loan.
4. Over the next few years then evaluate what you can do with the PPOR. If your ok with the area and want to raise a family there, then renovate or build new.
5. You can then buy another investment property or develop the other one.
6. Anyway over a 15 year period, we have had two children who are 10 and 11. A PPOR that is paid off, a holiday home in the high country (we live bayside) and 3 two bedroom units and a development site with an old house that could be developed into two townhouses later. We started with $10k and have built it to about $1.5m in equity. It takes time and you need to enjoy the journey as well. We have taken the kids around the world twice as the missus is from Nth America. Rome was not built in a day.
7. My rules (much credit goes to folks here) – buy when you can afford it, time in the market is more important than timing the market, inflation is your friend, have a buffer by having redraw facilities at your disposal (ie, revalue to increase loan facilities), live within your means, buy bayside metro and don’t underestimate the benefits of compounding.

Good Luck  

评论
Sheryn said: ↑
Townhouses would be dearer because of Council section fees 20K, higher architect fees eg. 2 buildings instead of one, may have to be double storey instead of single story, and strata costs up to 10K :D

Sorry couldn't help myself :p


SherynClick to expand...
Hi ya Sheryn,

Heh heh! .....you should always help yourself :p On costs, duly noted ;) however bearing in mind they (townies) would likely be smaller than a house, it is the initial "new house/home" figure that I reckon is under-estimated and, probably under-capitalised if that the true value of the block alone (if one were to use same quality fittings for the house and townies alike), hence the inconsistency :)

RE Rocks, you also need to keep in mind the tax implications of the various methodologies you have mentioned above and how they may erode your CGT exemption(s) in future, and the GST implications of selling brand new stock if you elect to go down that path. Get expert tax advice from your accountant.  

评论
Hi Player

I have highlighted my responses to your questions. I really appreciate your detailed response. My responses in RED

Current Situation:

PPOR:Loan $$415K
Value: $540K (Land component $499K)
Loan Type: Principal & Interest
Description: It's a run-down house on a 600sq m land

I am currently confused about 7 different options:

(A) Take a construction loan of $270K and build a house so add $270K to my PPOR Loan ( $270K = $220K (Fixed contract with builder + $10K demolition + $20 fencing/driveways/landscaping + chopping tree ($2K) + Carpets ($3K) +$15K ( reestablishment survey costs e.g soil tests/slabs etc)

On Completion Value: $800K from the bank

IMO $270 K won't get you very much house and if as you state the land is actually worth circa $500 K, you are likely under-capitalising on the dirt. Care to share what suburb your PPOR is in?

PPOR is in Mentone $ 230K with Metricon or Henley will get you a 30 sq house

(B) Rent my PPOR and knock it down later ( when???) and get the tax deductions

Could be a good short term initiative to get some tax deductibility to your loan and it is generally cheaper to rent in the area you wish to live in that to buy (and have a mortgage) there. In the interim you can then take some time to clarify which path of the others you include below may appeal to you and get some knowledge on the process involved in doing the development. Do some reading...ask more questions, etc.

There will hardly be any tax deductions on depreciation side of things as its a run down house.


(C) Knock down and build 2 townhouse for $600K ( Rent 1 and live in 1)

Some inconsistencies here. A house will cost $270 K yet a town house will costs 300 K apiece to build.

Yes $270 for a house and $ 600 for 2 townhouses Quotes from builders..

(D) Knock down and build 2 townhouse for $600K ( Sell 1 and live in 1)
Townhouses are going for $600K - $700K in our area

E) Knock down and build 2 townhouse for $600K- Construction Cost ( Rent both and rent myself)

If you are comfortable with renting, this is what I would do to maximise your deductions and capture the instant equity you establish by adding such value

(F) Sell it with/without plans & permits & keep the profit ( don't know how to calculate: If it sells for $575K and I have a loan of $415K, how much will I effectively get into my pocket)

(G) Sell it as it is put that towards another investment & rent myself

I wouldn't do this as you will have higher entry costs into the nxt investment. Building two new boxes as well as commanding a premium rent for the newness of them, you will have a motza of depreciation to claim as well.

I am really stressing out as I would like to make a decision which I won't regret at a later stage. I need some opinions before i sit down with my wife to make an informd decision

Don't stress. In the scheme of things we aren't dodging bullets, have hot/cold running clean water and all the amenity, safety and freedom that living in this great land entails.

You really need to spend some time, working out what you both want as I indicated earlier.

No one can make you decisions or give you advice here. It is merely opinions that we can offer to help you along the path you wish to take.


Your opinions/feedback will be appreciated

Meanwhile if you need any additional info, please let me know





Player said: ↑
You mention in another post that keeping emotions aside (a little hard when a PPOR is involved), the best thing you seek is a prudent financial decision. Again I would ask.....to what end?

Clarify this with your wife and don't rush. Work out what you both want and work backwards to plan the necessary steps.

Good Luck RE :)
Click to expand...
How do i know which is the best options in terms of value for money// the house cannot be renovated as it is in a complete mess and knock down seems to be the good option....  

评论
toony said: ↑
My advise for what its worth. (well this is what we did).

My responses in RED
1. Over the next few years pay off what you can on your PPOR mortgage. Over this period, loan goes down and value of PPOR increases.
Sounds like a great idea but wife wants to get out of this run down house sooner. It has already gone up in value to approx $600K and i bought it fot $410K
2. If your wife is open to the idea, don’t spend any money on the PPOR.
3. Then buy an investment property (preferably similar to what you currently have) with 110% loan and interest only. Again concentrate on reducing the PPOR loan.

4. Over the next few years then evaluate what you can do with the PPOR. If your ok with the area and want to raise a family there, then renovate or build new. Build new Townhouse or a family home???? We love the location in Bayside Melbourne
5. You can then buy another investment property or develop the other one.
6. Anyway over a 15 year period, we have had two children who are 10 and 11. A PPOR that is paid off, a holiday home in the high country (we live bayside) and 3 two bedroom units and a development site with an old house that could be developed into two townhouses later. We started with $10k and have built it to about $1.5m in equity. It takes time and you need to enjoy the journey as well. We have taken the kids around the world twice as the missus is from Nth America. Rome was not built in a day.
7. My rules (much credit goes to folks here) – buy when you can afford it, time in the market is more important than timing the market, inflation is your friend, have a buffer by having redraw facilities at your disposal (ie, revalue to increase loan facilities), live within your means, buy bayside metro and don’t underestimate the benefits of compounding.

Good LuckClick to expand...
Me and my wife are confused whether to Build a house now or 2 townhouses.  

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You sound a bit like we were 10-15 yrs ago. I grew up in Mentone on the racecourse estate. Prior to kids we had a 2 bed unit on beach rd between Parkdale and Mordialloc. We then moved to and still live in Aspendale, 5 mins walk to station and 6 mins to beach. Kids at St Louis and Kilbreda and St bedes in a few yrs time.

I love it here and to me its a very underrated part of Melbourne. I suppose you need to decide what you want to do lifestyle wise. We probably could have bought in beaumaris but i did not want a large mortgage when upgrading from a unit to a house.

We too face a similar situation as well. Our development site is in Edithvale, again 3 mins walk to station and 4 mins to beach. We could build a $400k metricon home or 2 double storey townhouses. Our current home is a 1970's renovated home with no ensuite or garage. But we are comfortable and my wife is ok with it. I am more than happy with a confortable bed and would rather invest in real estate than the PPOR. But its a balancing act.

Focus on your family situation and look at investing down the track.  

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How run-down is the house? Could you try a new option...

H) 'Slide' the old house if necessary to create the most space ($10k ish), renovate old house like new and tenant. Cost <$70k, rent $380pw. Reval, then build one new townhouse PPOR, ($300k), in style appropriate for existing house. Structure finance so most debt is over old house (investment).

Saves $220k, but values up closer to two townies.
Increase in mortgage payments $550pw at 7.5% I/O.
Plus claim depreciation on your reno.  

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The house structure has underpinning issues. We cannot slide the house as if & when we plan to build townhouses, it'll be side-by-side. The dimensions of the land are 15.5 X 38.5.

Can you suggest another option ;->


.toe said: ↑
How run-down is the house? Could you try a new option...

H) 'Slide' the old house if necessary to create the most space ($10k ish), renovate old house like new and tenant. Cost <$70k, rent $380pw. Reval, then build one new townhouse PPOR, ($300k), in style appropriate for existing house. Structure finance so most debt is over old house (investment).

Saves $220k, but values up closer to two townies.
Increase in mortgage payments $550pw at 7.5% I/O.
Plus claim depreciation on your reno.Click to expand...
 

评论
Toony

Appreciate you sharing ur circumstances. But at the moment I am really unsure whats lifestyle would townhouse give as oppose to a house on a full block of land. Yes I know it'll increase my mortgage but i guess I'm still not over-capitalising if i build a new house


toony said: ↑
You sound a bit like we were 10-15 yrs ago. I grew up in Mentone on the racecourse estate. Prior to kids we had a 2 bed unit on beach rd between Parkdale and Mordialloc. We then moved to and still live in Aspendale, 5 mins walk to station and 6 mins to beach. Kids at St Louis and Kilbreda and St bedes in a few yrs time.

I love it here and to me its a very underrated part of Melbourne. I suppose you need to decide what you want to do lifestyle wise. We probably could have bought in beaumaris but i did not want a large mortgage when upgrading from a unit to a house.

We too face a similar situation as well. Our development site is in Edithvale, again 3 mins walk to station and 4 mins to beach. We could build a $400k metricon home or 2 double storey townhouses. Our current home is a 1970's renovated home with no ensuite or garage. But we are comfortable and my wife is ok with it. I am more than happy with a confortable bed and would rather invest in real estate than the PPOR. But its a balancing act.

Focus on your family situation and look at investing down the track.Click to expand...
 

评论
RE rocks said: ↑
The house structure has underpinning issues. We cannot slide the house as if & when we plan to build townhouses, it'll be side-by-side. The dimensions of the land are 15.5 X 38.5.

Can you suggest another option ;->Click to expand...
Can you not subdivide the block in two with the house as is? Then build something new on the remaining 450 m2, cheaper than two townhouse, so more profitable.

If not, is the house non brick, and on stumps? Then you might be able to slide it to the edge of the block. It'll require new foundation anyway, but much cheaper than building a new second house.

Your current house owes you $40k, plus 10k to demolish. So the cost of the second townhouse is 350k. Even if it cost 200k to refurb the old house you'd still be 150k better off. That's if it can be done, and if your priorities are financial.  

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