Property Journey

[AVS]

Hi All,

I would like to thank you all for your advice on this forum. I am happy to say, I started my journey in investing and have scored my first property in Bracken Ridge (Brisbane) which is due for settlement on Friday. I would like to your advice on what should I do to continue my journey. My basic info is as below :

Age : 29
Pay : Above 100k
Deposit : 100k (this will be in offset account)
Current Loan : 320k (Once I settle on the property)
Current cash flow : Expecting current cash flow on my first property to be positive to neutral (I can prepared for negative as well)

The property I have purchased is old so will not have any depreciation\tax benefits on it.

I will be looking to purchase my second property in next 4-5 months. Where should I go next? Should I buy a property around 500k in adelaide or wait for Sydney\Melbourne market to go down and purchase there? Since I have purchased my first property in Brisbane, I am thinking of not having second one there. Also thinking of buying a newish property this time to have some tax benefits. What are your thoughts on my strategy?

 

[J_aco]

Hi AVS,

1. Mind if I ask if you've talked to your mortgage broker about your plan?
If not, or if you don't have 1, since you're in Adelaide, you can contact Corey Batt, who poses here as CJay.

Otherwise Jamie Moore [Jamie_M] can easily discuss things with you over phone and email.

2. Even if the property is old, you might still be able to do something about it. You can contact Scott, who poses as Depreciator here. You might be able to take photos of your IP (or I guess your PM has to do it since it's in Brissy), send over to Scott and he can give you an idea already.

http://www.depreciator.com.au/

Hope all goes well mate!

 

[Michael_X]

You are in a great position! What's your end goal?

Agree on the depreciation. You will be surprised with what you can get back - definitely worth checking with Scott from Depreciator

 

[Brady]

Hi AVS,

1. Mind if I ask if you've talked to your mortgage broker about your plan?
If not, or if you don't have 1, since you're in Adelaide, you can contact Corey Batt, who poses here as CJay.

Otherwise Jamie Moore [Jamie_M] can easily discuss things with you over phone and email.

2. Even if the property is old, you might still be able to do something about it. You can contact Scott, who poses as Depreciator here. You might be able to take photos of your IP (or I guess your PM has to do it since it's in Brissy), send over to Scott and he can give you an idea already.

http://www.depreciator.com.au/

Hope all goes well mate!

Not sure where you're going with this post... Settlement is friday so going to assume the OP has finance sorted.

By the sounds of having funds in the offset sounds like OP has reasonable understanding of correct structuring.

To the OPs questions I wouldnt be buying a property solely for tax benefits, that sounds like salesman talk. You want to buy a property that is going to perform well, CG and reasonable yield.

My suggestion would be to look at buying something that you could add value. With a decent amount of fund/equity available and $500k to spend could get a reasonable property with development/add value potential in Adelaide.

Where is your PPOR?

 

[AVS]

You are in a great position! What's your end goal?

Agree on the depreciation. You will be surprised with what you can get back - definitely worth checking with Scott from Depreciator

I will check with Scott but I dont have much hope as the property is nearly 40 yrs old.

 

[AVS]

You are in a great position! What's your end goal?/QUOTE]

My End goal is to have a good property portfolio with combination of both cash flow positive and capital gain potential property. Cash flow positive supporting the capital gain properties which may be CF-

 

[AVS]

My suggestion would be to look at buying something that you could add value. With a decent amount of fund/equity available and $500k to spend could get a reasonable property with development/add value potential in Adelaide.

Where is your PPOR?

Since I dont have much experience in reno and as hopefully first property will be neutral (Positive with offset funds). I will be looking for property with capital gain potential as I will be able to cope up with some negative gearing if required. I am not looking for property solely for tax benefit but it would be additional.

My PPOR is regional SA, I am currently renting.

 

[J_aco]

Not sure where you're going with this post... Settlement is friday so going to assume the OP has finance sorted.

By the sounds of having funds in the offset sounds like OP has reasonable understanding of correct structuring. ?

Yup sorry if I confused people - I didn't mean to tell AVS to seek your help for the IP that will settle on Fri; was just trying to encourage him/her to seek advice on strategies if he/she plans to build a portfolio.

But as you mentioned, AVS is likely to have an understanding of correct structuring already =)

 

[Jaggannath]

With that kind of money, and if you understand the Adelaide market from living there, why not identify opportunities locally?

 

[AVS]

Hi AVS,

1. Mind if I ask if you've talked to your mortgage broker about your plan?
If not, or if you don't have 1, since you're in Adelaide, you can contact Corey Batt, who poses here as CJay.

http://www.depreciator.com.au/

Hope all goes well mate!

I have some strategy for finance. I havent discussed too much about it with mortage broker but he is aware I am planning to buy another property after few months\ year.

 

[Brady]

Should really be discussed straight away. Some things can't be changed retrospectively, but sounds like you have done ok with having offset.

As mentioned above if you have some knowledge of the Adelaide market $500k will go a long way. From my observations anything with development potential with have the best growth, even if you're not developing yourself. This type of property is the most in demand, families for PPOR and investors.

 

[Corey Batt]

I have some strategy for finance. I havent discussed too much about it with mortage broker but he is aware I am planning to buy another property after few months\ year.

The way your current finance is structured is largely dictated by your future investment goals, so make sure they're well aware of the path you're heading down, and that they understand how to help you achieve the goals you set.

A lot of market commentators are putting Adelaide at the end of it's downturn and ready for an upswing, and Brisbane already in its recovery progress. Sydney/Melbourne has just gone through respective growth spurts, so you may be waiting a while yet to enter the market if you are looking to enter a low point.

If you're looking at new builds in Adelaide, I've had quite a few clients doing well from building on infill development sites, from a CG and yield perspective. In particular around middle ring suburbs (5-10km).

 

[danwatto]

I will check with Scott but I dont have much hope as the property is nearly 40 yrs old.

Get some hope just did 4 reports with Depreciator and every one of them is saving me thousands in tax. 2 houses are even 50 years old.

Ask him about guarantee to make back the money from the report, and deduct the report cost as well.

There are two parts to depreciation and there's always something that can be found you can write off. Also any major repairs, alterations, renovations etc...

 

[AVS]

Thanks Brady and Cjay.

I will discuss this with my mortgage broker soon. As mentioned earlier, I am based in Regional SA hence not fully over Adelaide market yet but I agree, I am familiar with it. I have been thinking about it but wondering if it will take very long for Adelaide to go up.

I agree Sydney\Melbourne are already at its peak so will have to wait for it to cool down before I can enter and since I already bought one in Brisbane, buying second one in Brisbane may not be the best idea so that leaves me with Adelaide as best option.

 

[AVS]

Get some hope just did 4 reports with Depreciator and every one of them is saving me thousands in tax. 2 houses are even 50 years old.

Ask him about guarantee to make back the money from the report, and deduct the report cost as well.

There are two parts to depreciation and there's always something that can be found you can write off. Also any major repairs, alterations, renovations etc...

Thanks mate, I will definitely message him and see if I can have some hope