Did you build something when you invested?

[yieldmatters]

I voted reno 10-15k and knock down for higher use.

Any reno we do are in the 10-15k spend but this is hardly a minor reno as its a full kitchen, bathroom generally a partial re plumb and also full tiles throughout. This is in units, houses are different but still follow the basic formula.

So hardly a minor reno but just careful with my costs and also we do a lot of the work ourselves.

Just this week we finished a kitchen reno (strata unit) because the kitchen was about to collapse due to the water heater being under the sink. Job was to move the water heater from under the bench into the laundry, level of the kitchen floor (sand/cement) 1/2 ton of sand and then tile floor 7 m2 install kitchen with pearl black granite top, new sink and mixer tap. then finally a new electric switch ppanel with safety switch. Total cost

Kitchen cupboards (delivered) $1800
Sink $120
Mixer $50
New 50l water heater $400
Granite top $260
tiles (leftovers) $120
Glues $100
electrical cable & copper pipe and fittings $200
Stove remaining (have to draw the line somewhere) $0
3 weeks rent $600
Labour ???????

total excluding our own labour -- $3650

My point is that although the cost isn't great the result is substantial.

Cheers

Nice work - guess thats where the handyandy tag comes from.

 

[dave99]

I don't think it's anyone's personal responsibility to build a new house if buying an existing one makes more sense financially. With the cost of planning, council charges and such, it's often much more expensive to build new, it doesn't make sense to do it. That's bad news for our housing supply, but we as individuals shouldn't feel guilty for that, it's a free system.

The government should change incentives to make building new relatively cheaper - either through a discount on charges for new, or removing some of the current benefits on buying existing (e.g. remove negative gearing, CGT concession for purchases of existing properties after date X).

This would address to some degree the current supply imbalances and moderate price and rent rises.

 

[Nth Brisbanite]

All builds for instant equity, top rents and top depreciations and only one ready built but bought from brand new as it was in Mandurah during the boom. We weren't even looking so it was an impulse buy for $295,000 which was bank valued at $450,000 approx 6 months later so we got some quick equity out to help with our developing plans!

Initially none of them were builds but now follow sparky23's above method. In every case, I have had instant and substantial equity. So many people are too lazy to buy land and build in this "instant" society. Building initially is a bit of a hassle but you can used to it once you have done a couple.

It's basically the Fitzgerald method with top rents and top depreciation as long as you buy land in the right location.

 

[silversands]

Fitzgerald method??

We are currently building our third i.p ( holding all of them ) Please Nth Brisbanite would you kindly forgive my ignorance and enlighten me... Please???

What is the Fitzgerald method? Feel free to direct me to another thread or link if it's easier.

Regards Jodie

 

[Nth Brisbanite]

We are currently building our third i.p ( holding all of them ) Please Nth Brisbanite would you kindly forgive my ignorance and enlighten me... Please???

What is the Fitzgerald method? Feel free to direct me to another thread or link if it's easier.

Regards Jodie

John Fitzgerald has put out a book called "7 steps to wealth". A quick summary of his principles are as follows:

1. Buy and hold
2. Buy land and build but it must be in a good location
3. Build average type properites
4. He is against cross collatirisation
5. He is against units

He has a website - I think that it is custodianwealth.com.au (do a google if you can't find it). A lot of the members of our Nth Brisbane social group are using his method with great results. And no, none of us work for him or even know him. We've discussed his investing strategy at length and most of us have decided to follow it.

Hope that this helps you.

 

[Ausprop]

just some food for thought...


[*]Buy - his land - and hold
[*]Buy - his land - land and build - his houses - but it must be in a good location - like this estate we prepared earlier
[*]Build average type properites - like this plan here
[*]He is against cross collatirisation
[*]He is against units - too hard to list, easier to sell houses

 

[mitta]

Done or doing all but not as yet No. 4 " redeveloped an existing site ".

Mark

 

[Nth Brisbanite]

just some food for thought...


[*]Buy - his land - and hold
[*]Buy - his land - land and build - his houses - but it must be in a good location - like this estate we prepared earlier
[*]Build average type properites - like this plan here
[*]He is against cross collatirisation
[*]He is against units - too hard to list, easier to sell houses

Not too sure what you are getting at although I detect a tone of cynicism.

Two of our group bought his land and built with one of his recommended builders. They have been very happy with the substantial equity that they made out of it. They rented out for top dollar and have a virtually maintenance free investment property for quite a number of years.

A number of others didn't buy through his organisation but basically follow his principles We were pleasantly surprised with the result.

 

[VYBerlinaV8]

I've never built an IP, but built my PPOR, which was our first home.

At this stage, I doubt I'll build in the short to medium term, but will instead continue to acquire well yielding IPs in high demand locations.

I figure that the tax I pay (more than most people due to high combined incomes) helps the govt to provide services it deems necessary. I also contribute substantially to my favourite charity.

At the end of the day, our combined govts need to decide that more supply is the solution to the housing 'crisis' (ha!). When that happens, and they pull the roadblocks of slow approvals and high fees/taxes out of the way, I'll consider it. Fundamentally, my plan is all about building wealth steadily while minimising risk. Building doesn't fit that plan at the moment.

I have no doubt that there are people who make good progress wealth-wise by building and/or improving properties. More power to them. But it's not for me at the moment.

 

[silversands]

Thx Nth Brisbanite, I have checked out his web site. Sound ideas, but I don't think I'll be buying any of his offerings, but I appreciate your response to my question. I don't like being ignorant as to what others advocate. Knowledge = empowerment!
Also I get the gist of your words of caution Ausprop. Thx for looking out for the newby!

 

[THEHEATH]

Is there are thread on here discussing Rudd's new tax concessions for people building IP's??? I can't seem to find one

 

[dave99]

http://www.somersoft.com/forums/showthread.php?t=40051

 

[THEHEATH]

Cheers mate