does this sound like a plan ?

[deano 59]

hi this is my first post so a big hello to everyone and please be gentle on me . .
im 54 and never been one to get too involved in the world of finance and ive done ok paid house off no loans no bills ect .I don't work due too injury any more but no pension because my wife works full time .
my wife is 48 and works for the govt here in SA dept of health and is on a tad over $ 80g a year ..ok her family has a 1/2 block of land in the prestige's suburb of Auldana her mum wants to sell it and give all the proceeds to my wife bit like a early inheritance . I have been given the task to try and sell the block as a private sale as her mum has a dislike to real estate agents due to a bad experience recently when the family home got sold .

so the block is worth around mid $750.000 to $800.000 so when sold it will be quite a windfall for us . we have been bouncing around a few idea's and obviously will be seeing a financial advisor .

we have been thinking for sometime even before been gifted the block basically that we wanted to move to a small acreage up near cockatoo valley but we would have had to sell our house we have at the moment to do so.. we owe nothing on it and its worth around the $ 450.000 mark .

but now that all changes plan is too buy new house on acerage with some of the proceeds around $550.000 rent out our current house around $420 a week throw another 100g into the wifes super fund currently sitting at $250.000 . then use the equity of the rental to buy another ip property or more in the future . does this sound like a solid plan or am I thinking it cant be this easy ?

I was a mechanic not money guru lol any feedback for and against the idea greatly appreciated .

regards deano 59 sorry for the epic post but I thought some background my be of use ..

 

[jackbak]

First of all, I think that's a terrible idea to sell the property yourself. You used to be a mechanic, it's like me trying to replace the motor in my car - I wouldn't have a clue what to do. As you've outlined you have almost zero experience in property - you need an agent.

 

[deano 59]

First of all, I think that's a terrible idea to sell the property yourself. You used to be a mechanic, it's like me trying to replace the motor in my car - I wouldn't have a clue what to do. As you've outlined you have almost zero experience in property - you need an agent.

thanks for the reply

it's only a vacant block contracts would be drawn up thru the family solicitor and arrange a appointment with a convancer ? I have a friend who makes real estate signs so putting a sign up is no problem .and I can place adds in the paper as well as the next guy there are some real estate sites that allow private sales I was going to put some adds on those .

trouble is getting the mother in law to agree to a agent after a recent bad experience is the issue . I sold my first house many yrs ago by private sale and maybe things have changed somewhat I don't know ?.

im guessing if we don't get any bites for a while then I maybe able to convince her to put it in the hands of a agent . but she got stung recently and it's left a real bitter taste in her mouth and she is as stubborn as lol ..

keep the advice coming good or bad I will take it all onboard .
cheers deano

 

[TMNT]

i too dont like agents but they will do a better job then 90% of us non real estate people.

if you do sell privately you might be able to save the say $10k in fees, however, an agent may get you $10k extra! or more

plus the only way you can advertise is word of mouth, cardboard signs, gumtree, local paper, which you may get lucky but ultimately, an agent is going to have a huge audience compared to yours

 

[deano 59]

i too dont like agents but they will do a better job then 90% of us non real estate people.

if you do sell privately you might be able to save the say $10k in fees, however, an agent may get you $10k extra! or more

plus the only way you can advertise is word of mouth, cardboard signs, gumtree, local paper, which you may get lucky but ultimately, an agent is going to have a huge audience compared to yours

I agree with the agent having a wider audience that was one of my arguments to the mother in law but too no avail . sign would be a professional job not a piece of cardboard he makes these as a living .

nor sure on what % a agent would charge on $750.000 or more ? anyone help me out there so I can use that as ammo with her .

personally I would have preferred a agent but I opened my mouth and said I sold one of my houses as a private sale yrs ago she jumped on that like a cop on a dounut ..

 

[FelixL]

Its mainly a mindset thing for having agents. A lot of inexperience buyers will only look at properties for sale through agent, and unfortunately its those buyers that will tend to offer higher money based on emotion

 

[deano 59]

Its mainly a mindset thing for having agents. A lot of inexperience buyers will only look at properties for sale through agent, and unfortunately its those buyers that will tend to offer higher money based on emotion

I tend to agree with the mindset of it . personally im hoping if no interest in the short term she may have a change of mind .

ok so any advice on the rest of the plan . it was suggested to sell the house we are in as well rather than rent it out as it would be positively geared and use the funds to purchase more ip propertys . but ive always been a bit of a believer as in keeping your assets .

cheers deano

 

[underdev]

I tend to agree with the mindset of it . personally im hoping if no interest in the short term she may have a change of mind .

ok so any advice on the rest of the plan . it was suggested to sell the house we are in as well rather than rent it out as it would be positively geared and use the funds to purchase more ip propertys . but ive always been a bit of a believer as in keeping your assets .

cheers deano

Be careful of tax implications, talk to your accountant first about receiving gifts of such value. I imagine you would have to pay stamp duty which may be around $35,000 if valued at 750,000 on transfer.

Be aware that if you purchase a large high value parcel of land your regular costs such as council rates and maintenance may be much higher, even though you own the property outright.

 

[perthguy]

i too dont like agents but they will do a better job then 90% of us non real estate people.

That's probably true by not necessarily true. I have been to some sale by owners recently. Some were brilliant, some were lousy. But the lousy ones were no worse than a bad agent. I have seen too many of them too.

if you do sell privately you might be able to save the say $10k in fees, however, an agent may get you $10k extra! or more

This is quite possible. When I sold my unit last year, the agent got me more than I wanted, which more than covered the fee.

plus the only way you can advertise is word of mouth, cardboard signs, gumtree, local paper, which you may get lucky but ultimately, an agent is going to have a huge audience compared to yours

This is simply not true. Companies such as www.forsalebyowner.com.au, forsaleforlease.com.au and propertynow.com.au and others allow people to list on realestate.com.au for a fee.

Whether the OP wants to try to sell privately is up to them. One strategy might be to list the property and see what the response is and then list with an agent if they can't sell. It depends on the market really. I have found in WA that purchasers are reluctant to put an offer in writing without an agent, which I find quite odd but that's the way it is.

 

[Singo]

Selling privately without using an agent? Fantastic. Some good investor may make lots of money from it.

I know a property recently listed at gumtree. The owner was ready to accept 270k. It is worth more than 300k and the owner didn't even knew its zoning. Somebody made a good purchase I reckon. Yes, he hated agents and didn't want to pay 2.5% to agents and probably lost 10%.

 

[deano 59]

Selling privately without using an agent? Fantastic. Some good investor may make lots of money from it.

I know a property recently listed at gumtree. The owner was ready to accept 270k. It is worth more than 300k and the owner didn't even knew its zoning. Somebody made a good purchase I reckon. Yes, he hated agents and didn't want to pay 2.5% to agents and probably lost 10%.

ive done a fair bit or research on the property's in the area and vacant blocks are far and few . it's in one of Adelaide's most prestige's suburbs think the Toorak of Adelaide we wont be giving it away but it's priced fairly .. we haven't just plucked a fig out of the air its been valued professionally . its been in the family 30 yrs another bit longer is of no consequence .

cheers dean

 

[deano 59]

thanks for the links perthguy much appreciated

 

[Brady]

My suggestions are

- Run with the for sale by owner if you must, but likely missing out on people paying a premium. If it's in a exclusive suburb where land is rare why wouldn't you employ a professional to extract maximum results? As mentioned before you are a mechanic just think if everyone stopped using mechanics due to bad experiences....

- Speak to a accountant/professional before doing anything, many issues... family gifting funds of that amount will it affect them? Also keep your existing property is great, but could potential miss out on CGT exemption benefits

- Speak to a good banker or broker about the next purchase, because no doubt if you're trying to sell the vacant lot your going to be on realestate.com and I'm sure you will start looking at potential new places yourself... don't want to fall in love with something and miss out because you weren't prepared.

 

[Corey Batt]

Hi Dean, welcome to the forum.

Best advice is to talk to a professional! With the larger figures being used and asset sales, its best an accountant looks over your situation to minimise any potential taxation liability.

With regards to selling, I'd sooner go with an agent to sell the property than selling by yourself. At this price I should think you would be paying sub 10k in fees, depending on the agency and advertising requirements.

Over all, it looks like you have great potential moving forward, just use it to the greatest advantage.

 

[westminster]

There are a number of different things going on and I think you need to do some steps at a time then work out the future. Trying to solve everything may get you into knots.

Firstly. Fantastic news about the block BUT be careful! If your MIL is on a pension (or soon to be) then gifting large amount of money/property can affect that. It needs to be done xx years before pension is needed etc.

Is your wife an only child? If not then it's complicated if one child is given the property and not others.

So
1. Sort out implications to yourselves and MIL as to gifting cash from sale.
2. Do you due diligence on the block. Could it be subdivided into 2 and even more money made?
3. Put it up for sale. Sell it yourself if you want - there are some companies pointed out above that let you advertise the property on the mainstream sites for a fee.
4. Work out what you want to do with the money, your house and future housing. Talk to an accountant about the best way to do this.

 

[deano 59]

thanks for the reply westminister

mil is a self funded retiree so no pension to worry about .there are two sisters one is receiving equal amount from the proceeds of the family home while my wife opted for the block of land . mil has bought into a retirement village and has enough tucked away in shares /bonds and a super fund set up donkeys yrs ago . she wishers to help her daughters out while she is still alive and can see the joy it brings " her words not mine".

my wife and I had been thinking of selling and moving onto acreage for some time as it would suit our lifestyle and more room for our 3 german shepherds to run around on this will just give us the option of keeping our house and renting it out instead of selling it .

will make a appointment to see a accountant for more advise
thanks all for the advice so far much appreciated deano

 

[westminster]

my wife and I had been thinking of selling and moving onto acreage for some time as it would suit our lifestyle and more room for our 3 german shepherds to run around on this will just give us the option of keeping our house and renting it out instead of selling it .

will make a appointment to see a accountant for more advise
thanks all for the advice so far much appreciated deano

I understand the need to roam - we are looking for acreage too.

The issue at hand in turning your PPOR (principle residence) into a IP is that it will lose it's CGT free status. If you sell it to move to then there is no Capital Gains Tax. If you turn it into an IP then there will be CGT.

You want your debt on IPs not your PPOR as IP debt is a tax deduction, PPOR debt is not. You could borrow money to fund 1-2 IPs

 

[CHAOS]

Be careful of tax implications, talk to your accountant first about receiving gifts of such value. I imagine you would have to pay stamp duty which may be around $35,000 if valued at 750,000 on transfer.

The purchaser of the land pays the stamp duty. The OP would receive the $ from the sale of mil's land as a gift.