"The Week That Was: 23-29/2, 2000"

From: Mike .

Hi Folks,

A record this week for most threads: 13, which is 3 more than the previous best of 10. All the threads, however, were fairly short.

Topics Included: PIA, DHA, Peter Spann (Wealth Magic), GST, Price Data, Build IP, Capital Growth, LOC, Company Structure.

Quotable Quotes:

From Brett: "The second piece of information, which I can't find on the internet, would be a prognosis on the Australian Property Market by one of the leading banks or financial institutions."

Me: Brett, doctors usually make a prognosis, not bankers. However, I can say as a layperson, that the market is recovering well after some anxious moments. Has got a few more years of life left as long as it stays off the booze and smokes, diets sensibly and exercises in moderation.

From David Y: "Hi everyone, I am seeking some advice as to whether or not my daughter and her boyfriend are legally able to purchase their first home as an investment property (maybe through a company, which the boyfriend is soon to set up for his trade) and then live in it themselves, and pay rent at the market rate, to their company."

Reply from Deborah G: "I recently requested comments on this idea from a consultant at a reputable company in Sydney though, and he dumped me as a client. I'm hoping it was because it meant I wouldn't be buying anything from him (although he says they don't push their own properties ). I would be very interested in hearing more about this.

Me: No response from the Forum to Deborah. How does that song go...silence is golden...

Research & Links:

From EAB: Hi James. Try looking at this site for a program called RENT WRITE as an alternative to PIA, I think you will find Jan & Ian's software is great value (don't know if they have a trial ware version) however PIA does not have a management component. How about it Ian?

From Wishus: Most of the documents (re GST) I refer to below can be obtained by calling the ATO or looking at the special tax reform site:

From Ian: Ian's comments can be accessed via the News page on the web site or directly by http://www.somersoft.com.au/gst.htm

From Les: I stumbled over the Quartile Property website ( http://www.quartile.com.au ) which advertises the fact that they can supply 30 years of Historical data for each of the major cities in Australia.

Only one catch - you must subscribe to their services to obtain it. But could be well worth the $100 (approx.) for a year. Shorter timeframes available (3 months for ~$40, I think).

From Mark: I went to the shire for stats and this is what I got: population growth of 1.7% over last ten years, median sale price of properties from 1990 to 1998 compound growth p.a of 1.4%. The rental market is snowed under and real estate can't get enough houses. We have a large tourist and farming industry as well as factorys.

Classic Post:

Short-listed this week were Wishus, Les, Richard, and Ian (NSW). Very difficult to split these, all deserved the gong. Since the maximum I can file attach is 2, I'll give the nod to Richard and Ian (NSW), based purely on subject matter. Richard makes some interesting points on Building loans and Ian (NSW) comments on LOC loans.

Michael's question:

Hi, My wife & I own one IP and are looking to grow our portfolio. We are currently trying to decide whether to by an established property or take the plunge and purchase a block to build a couple of villas on. We aren't sure of the pitfalls of this or how to structure a loan to achieve it. Our bank loaned us 100% for our 1st property and expect the same second time around. Any advice???

John's question:

I spoke to a financier yesterday as I have never had a mortgage, and I am looking for a place of my own and a property investment. He showed me about using a line of credit as I have some money saved to put down on my 1st property. A lot of these figures went over my head.... Is Line Of Credit a good and secured way of buying a property and what are the pitfalls. Does anyone know of any recommended reading on this. Thanks John
Last edited by a moderator: