Are you still buying IP's?

How have interest rate rises effected your IP buying?

  • Not feeling it at all, full steam ahead.

    Votes: 47 46.5%
  • Slowing down.

    Votes: 22 21.8%
  • Stopped buying.

    Votes: 27 26.7%
  • Feeling the pinch, am selling some IP's.

    Votes: 4 4.0%
  • HELP I'm about to go broke!

    Votes: 1 1.0%

  • Total voters
    101
  • Poll closed .
We will be looking around for #2 IP towards the middle of this year. Let the rate rises have an effect first *thought to self: need to find out where are those 350k people are who are struggling under mortgage stress!*

Our plan has always been to buy #2 midway through this year, the rate rises might just put more choice on the shelves for our shopping $.

Cheers
Stella
 
Nope; we are in consolidation mode right now.

We settled on the next PPoR block of Land last Aug, so the hip pocket is taking a hit from that.

The LVR is still below 60% though, so later in the year when the rate rises start to have an effect and the booms slow down, I'll get ready to go shopping.
 
Buying mode: Yes..

Using equity off one of the earlier built IP's and shopping again, after some more land for another build...I think it might be my first crack at an auction too.

Should be fun.:)
 
Im personally holding back and saving a larger deposit for now until the market dips, if the market actually does move at all due to rate hikes,
I dont feel Ill be losing anything in the mean time and I might just score a better buy than I otherwise would have, at a lower LVR,
I dont intend to use any equity I may have in IP 1 just yet, only cash.
 
Got a call from one of my PMs this weekend asking to put up my rents! Looks like this is now a very common theme in Sydney.

Look llike I will have to buy more property to reduced the level of positive gearing on my property holdings! ;)

Hoping to pick up some bargains in mortgage stress suburbs of Sydney and Brisbane....market here I come. The rents are now really escalating in Sydney! :D
 
Finishing renovation which started off as a simple paint & carpet job, but has now turned into a full blown renovation. :eek: Hopefully should be done by April. The increased equity should be worth the wait however.

I start a new job in mid-March, so after my probation period is finished, I will prepare myself for a spring purchase, either another reno job or land to develop on.
 
Hi Michael, can you please explain "section 221d withholding tax variation form" or direct me in the right way.

Regards,

Simon
 
Michael

I would like to comment on your statement below that your costs to develop should not rise by more than CPI.

I think this is a large risk area you might be overlooking. I worked and owned a business in the building industry for a long time (20 years).

As you might know the building industry (material and labor) is cyclical and the cycles depend on things like the economy, demand and supply equation of material and labor among others.

Eg: Government policies do not encourage employment of apprentices (decreasing subsidies to employers), 4 - 6 years later theres a shortage of tradesman. If that coincides with even a small spike in demand, prices will go through the roof.

This has happened in the few years previous but i've seen it more pronounced over my time in the industry. (which i'm not part of these days)

A similar thing can happen with material. Eg: Price of copper has increased substantially in the last couple of years with the resource boom and there fore electricians and plumbers quotes have risen accordingly. (as you can imagine they use a lot of copper)

These are just a couple examples of many that can affect cycles in the building industry and you should be aware that it has nothing to do with the CPI.

If peak building industry prices coincide with depressed property market it could be a very dangerous time for you to develop. Especially considering the development/building time frame can be up to 2 years (or more).

BTW: I used to know a small developer (attached duplexes) that operated in Western Sydney that was caught out exactly this way and went under.

His margins were too skinny to handle the increase in tradesmans rates and material prices. But the margins were considered standard for a spec builder/developer.

Mate, hope it all works out for you and there are that many variables hiding risk in the development world you cant cover them all. Just something to keep in mind.





The cost to develop it shouldn't rise above inflation, so I'm happy to sit on my DA for a while and not rush it.
 
Off to the Sunshine Coast this weekend for next IP purchase :))), but not too close to the beach (know of other IP owners who have maintenance problems with salt air corrosion :eek:).
 
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