Another one down

From: Dale Gatherum-Goss


Hi

I'm excited to say that we bought another property yesterday after many hassles and walking away from the deal once, and threatening to do so again at the death knell.

It's a beautiful thing!!

Have fun and keep in there

Dale
 
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Reply: 1
From: Michael Croft


Well done Dale!

Any chance of you sharing some numbers like; purchase price, rental return, valuation, historic cap growth, etc? And if its not too much to ask; approx location, property type/potential, reasons for the purchase, etc?

Well, if you don't ask..... ;-)

Michael Croft
 
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Reply: 1.1
From: Dale Gatherum-Goss


Hi Michael!

Sure. The property is in Kilsyth South which is about 35klms from melbourne CBD. This is one of the nicer areas around here and has reasonably good growth (where hasn't!) with more potential.

The house is in a street where similar houses have sold for $270k and thereabouts.

We paid $225k with only a $1,000 deposit and settlement in 60 days. The vendor is moving to the country and wanted to sell.

We estimate that we could spend about $1,500 to $2,000 on cosmetic changes to its street appeal and easily add another $20k at a minimum.

We bought because of it's potential and because it met every one of the criteria that we set when we were looking.

The rent is not that impressive at $230 to $250 per week but because it is 9 nine years old and has had a lot of money spent on it, we will get good depreciation allowances which will help.

The house is to be added to our long term investments through my family trust.

I hope that this helps and good luck all.

Dale
 
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Reply: 1.2
From: Ian Redman


Hi Dale,

Congrats on the good news. Could you please if possible give us some indication of your search criteria. ie. rental return, no. of bedrooms, age, depreciation etc. I would be interested if anybody else has search criteria that they regularly use that works well.

Thanks

Ian Redman
 
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Reply: 1.2.1
From: Dale Gatherum-Goss


Hi Ian

We were looking for a house, not a unit, on a minimum of 700 metres. We wanted something under 15 years old for tax purposes and something that had a minimum of 3 bedrooms and 2 bathrooms.

We also wanted something that was below market value and this is harder to define because it is a moving target and one where everyone's opinion is different.

Does this help, I hope so.

Dale
 
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Reply: 1.2.1.1
From: Rixter ®


Hi Dale,

Congrats on the new addition.

I understand why you buy under 15 years of age for the building depreciation but can you please explain the fittings & fixtures depreciation. My understanding of it is as long as you buy after 1987 you can depreciate the fittings/fixtures as if they were new at the time of property purchase , then depreciate each item for 40 years from the purchase date? CAn you clarfiy this please
Happy Investing,
Rixter :)
 
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Reply: 1.2.1.1.1
From: Dale Gatherum-Goss


G'day!

Not sure about your advice on this one. Fixtures are depreciated from the date of installation at a prescribed rate set by the tax office which is meant to reflect their useful working life. You should only be able to claim depreciation on what is left at the time of purchase.

And, a QS is the person who will determine what, if any, is left to depreciate. I have already booked my report at $440.

Have fun and I hope that this helps.

Dale
 
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Reply: 1.2.1.1.1.1
From: Dirk Diggler


Sorry to spoil the party, but that is a very very average deal!
I would recommend that you go buy a copy of Rich Dad Poor Dad and ask yourself the question, how many of those deals can I realistically afford?
5% return. Please! You could buy three houses in Geelong for the price of the Kilysth one and receive $22,000 per annum and you even may get some capital growth to boot!
Last week I saw a renovators delight in Hampton Park for 115k that with a coat of paint would reappraise for $140k and rent at $180 per week straight away. Hampton park is the same distance as Kilsyth. I discounted the deal, because the return on investment wasnt up to my standards. There are better deals out there. I would say, keep looking and walk away if you can.
 
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Reply: 1.2.1.1.1.1.1
From: Dale Gatherum-Goss


Hi Dirk!

Thanks for the thoughts and advice. I have read RDPD and Kiyosaki's other books. I've been to one of his 2 day seminars when there was 30 of us in the room as opposed to his current seminars where there is 2000. I understand the concepts.

We bought this house knowing that there were better deals cashflow available if we were prepared to venture far and wide.

Time is my biggest enemy. . . .

However, Kiyosaki is not the be all and end all of investing and other "gurus" have other thoughts and concepts equally as valid.

Most importantly for us, this deal is quite reasonable and will provide very good capital growth. Something that Geelong and Hampton Park may or may not provide.

This deal met our objectives of what we were looking for.

Dirk, have you heard of a concept called a wealth wheel? If so, you will understand what I mean. If not, may I respectfully suggest that you read up on this concept to add another string to your own bow?

Good luck, thanks for the feedback and have fun!

Dale
 
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Reply: 1.2.1.1.1.1.1.1
From: Dirk Diggler


I wasnt trying to be smart, I believe it is a very very average deal.
What sort of capital growth are you expecting in Kilsyth. Its not exactly an inner suburb. All I was saying their are better deals out their, even within 1 hour away. You could buy 2 houses in Werribee for example for the same price which is closer to the CBD than Kilsth and you would probably get better capital appreciation anyway.
 
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Reply: 1.2.1.1.1.1.1.1.1
From: Dale Gatherum-Goss


Hi

Kilsyth South is where we bought which is a different class of area to the rest of the surrounding suburbs.

There is ALWAYS a better deal.

However, this one met our needs and expectations and we are very content with it.

Still, I appreciate the feedback and understand your comments were meant well.

Thank you

Dale
 
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Reply: 1.2.1.1.1.1.2
From: Fredo J


You will get a lot better capital appreciation from Kilsyth than Hampton park or Geelong

Especially with the freeway looming

Good luck
 
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Reply: 1.2.1.1.1.1.2.1
From: Dirk Diggler


Rubbish. This is Johnny come lately advise. I'll remind you that most homes in Kilsth, were 130-140k less than 2 years ago! How much more can a house 35klms from the CBD appreciate?
 
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