Oh dear... socialists think that can manipulate the market

[IQS.RLOW]

Na that was hours ago.

Must be time for your meth hit then...

[lisa jones]

2 investment properties bought in Perth back in 1998 @ ~$145K each. Both tenanted and have been constantly
Current value is ~ $1.2M
The only downside has been the negative gearing aspect has shrunk with the increase in rents

Ok I just read back and caught this IQ.

Now tell me again how these properties are gonna be great for you IF and WHEN you sell them.

I'm only asking because I have a property which I bought back in 2000 on a negatively geared basis along with my brothers and sisters. Why was this a joint venture? Because the property in question was purchased for 750K <-- a lot of $$$ back in 2000. Within 10 yrs it has doubled in value. It would easily walk through the market today at 1.5 million. It's on a beautiful position near the water (the house has lovely water views 24/7) and has not been renovated in any way over the past 10 yrs. It's been continuously tenanted .. ie no vacancy rates. You get the picture?

[harvey]

2 investment properties bought in Perth back in 1998 @ ~$145K each. Both tenanted and have been constantly
Current value is ~ $1.2M
The only downside has been the negative gearing aspect has shrunk with the increase in rents

Ok I just read back and caught this IQ.

Now tell me again how these properties are gonna be great for you IF and WHEN you sell them.

I'm only asking because I have a property which I bought back in 2000 on a negatively geared basis along with my brothers and sisters. Why was this a joint venture? Because the property in question was purchased for 750K <-- a lot of $$$ back in 2000. Within 10 yrs it has doubled in value. It would easily walk through the market today at 1.5 million. It's on a beautiful position near the water (the house has lovely water views 24/7) and has not been renovated in any way over the past 10 yrs. It's been continuously tenanted .. ie no vacancy rates. You get the picture?

You've answered your own question

[lisa jones]

IQ??

[IQS.RLOW]

2 investment properties bought in Perth back in 1998 @ ~$145K each. Both tenanted and have been constantly
Current value is ~ $1.2M
The only downside has been the negative gearing aspect has shrunk with the increase in rents

Ok I just read back and caught this IQ.

Now tell me again how these properties are gonna be great for you IF and WHEN you sell them.

I'm only asking because I have a property which I bought back in 2000 on a negatively geared basis along with my brothers and sisters. Why was this a joint venture? Because the property in question was purchased for 750K <-- a lot of $$$ back in 2000. Within 10 yrs it has doubled in value. It would easily walk through the market at 1.5 million today. It's a beautiful position near the water and has water views and has not been renovated in any way over the past 10 yrs. It's been continuously tenanted .. no vacancy rates. You get the picture?

Speaks for itself doesn't it?
One 3x2 and one 4x2 on 1000sqm and 700sqm respectively.
The $1.2M valuation is if I sold the properties as is today.
The 1000sqm title is subdividable and the original house can be retained. I am currently tossing up whether to develop the block, build and sell or sell the battleaxe alone.
Either way, I still keep the rental income for both properties which is above what the mortgage is worth. The block by itself would sell for ~ $320K.

I haven't been tempted to dabble in higher priced property markets because they are typically harder to tenant and maintain and the capital appreciation is less

[lisa jones]

2 investment properties bought in Perth back in 1998 @ ~$145K each. Both tenanted and have been constantly
Current value is ~ $1.2M
The only downside has been the negative gearing aspect has shrunk with the increase in rents

Ok I just read back and caught this IQ.

Now tell me again how these properties are gonna be great for you IF and WHEN you sell them.

I'm only asking because I have a property which I bought back in 2000 on a negatively geared basis along with my brothers and sisters. Why was this a joint venture? Because the property in question was purchased for 750K <-- a lot of $$$ back in 2000. Within 10 yrs it has doubled in value. It would easily walk through the market at 1.5 million today. It's a beautiful position near the water and has water views and has not been renovated in any way over the past 10 yrs. It's been continuously tenanted .. no vacancy rates. You get the picture?

Speaks for itself doesn't it?
One 3x2 and one 4x2 on 1000sqm and 700sqm respectively.
The $1.2M valuation is if I sold the properties as is today.
The 1000sqm title is subdividable and the original house can be retained. I am currently tossing up whether to develop the block, build and sell or sell the battleaxe alone.
Either way, I still keep the rental income for both properties which is above what the mortgage is worth. The block by itself would sell for ~ $320K.

I haven't been tempted to dabble in higher priced property markets because they are typically harder to tenant and maintain and the capital appreciation is less

Ok .. so the Perth real estate market is obviously a very different beast to the Sydney real estate market.

You're basically saying you outlaid 350K some 13 yrs back and that 350K has magically turned into 1.2 mill?

Let's take a closer look at this ..

1) Do you pay land tax over there in WA? If so .. how much have you paid to date on these 2 properties given that you've had them for 13 yrs?

2) Another question .. how the frack can you say you're STILL negatively gearing these properties after 13 yrs given their ridiculous low original purchase prices? I find that hard to believe to be brutally honest.

3) If you were to sell these properties today .. have you calculated how much CGT you're in for?

4) Have you repaid the loans on an interest only basis .. and if so .. have you calculated the overall cost to you in owning the properties after 13 yrs by taking into consideration the costs of the loans, all other property expenses such as repairs, rates, relevant insurances etc?

[lisa jones]

Re : land tax .. I just googled .. your land tax rates are freaking nothing compared to what we have to pay here in NSW.

You would have paid a total of 11K max over the last 13 yrs all up IQ.

Have I read that wrong?

[IQS.RLOW]

Ok .. so the Perth real estate market is obviously a very different beast to the Sydney real estate market.

Very much so. Syd has had nowhere near the capital growth of Perth or any other capital city

You're basically saying you outlaid 350K some 13 yrs back and that 350K has magically turned into 1.2 mill?

No magic about it...Check the median house price in Perth back in 1998 and compare it to today

Let's take a closer look at this ..

1) Do you pay land tax over there in WA? If so .. how much have you paid to date on these 2 properties given that you've had them for 13 yrs?

Yes and no idea. I'd have to dig out the receipts

2) Another question .. how the frack can you say you're STILL negatively gearing these properties after 13 yrs given their ridiculous low original purchase prices? I find that hard to believe to be brutally honest.

The capital growth (and subsequent rises in rental return) has been in the last 5 years so the negative gearing aspect has shrunk as I have mentioned but it still has some component. I generally leave that shit for my accountant to work out. A good accountant is worth his extravagant fee (which is also tax deductible )

3) If you were to sell these properties today .. have you calculated how much CGT you're in for?

Not specifically but it would be the same as anyone elses in my position and it would involve a hefty chunk, IF I were to sell. Instead I use the equity to realise other investments

4) Have you repaid the loans on an interest only basis .. and if so .. have you calculated the overall cost to you in owning the properties after 13 yrs by taking into consideration the costs of the loans, all other property expenses such as repairs, rates, relevant insurances etc?

Yes. That's what property investment is about

[lisa jones]

IQ

1) I always double check what my accountant does. In short I make sure I push him to the limit so that the (tax deductible) fee he charges me is of max benefit to me.

2) I always know the answers to the questions I have asked you on here today (re ALL my properties).

3) If I were you I'd be giving that accountant of yours a call on Monday to ask him why he isn't advising you that your properties are no longer negatively geared (because they are not .. there is no way that they can be).

4) I'd also get relevant legal/accountant advice re family trusts etc. I can already see the potential in providing all your kids with their 1st homes here by further developing the land given they both have awesome size and potential. If you were to sell you'd lose a lot of money in CGT alone.

5) Here in (the decent ie average/above average regions of) Sydney .. blocks of land that size are extinct. Also our land tax here in NSW sucks hard. I pay 10K a yr on just the 1 property I've mentioned. I've paid over 100K already over the past 10 yrs.

6) Negatively gearing is a high risk venture. I have never seen anyone jump for joy after they've sold a negatively geared property .. and esp after they've sat down and calculated all the costs involved. And I am referring to those who have purchased prudently. If anything I am seeing more and more people NOT sell and retain these properties. Those who have purchased decent sized properties in good positions and have retained their properties with further scope to develop or to use the equity to realise other investments are the winners in the high risk negative gearing game.

Which means IQ .. you've done well. You get a gold star from me.

I rarely meet people who know wtf they're doing (when it comes to property).

[IQS.RLOW]

3) If I were you I'd be giving that accountant of yours a call on Monday to ask him why he isn't advising you that your properties are no longer negatively geared (because they are not .. there is no way that they can be).

You do not have enough relevant information regarding the properties to come to that conclusion.

My sis-in-law is a classic case of someone who had no idea what she was doing.
4 investment properties bought in 1997 (units and townhouses in areas I wouldn't even consider), divorced and was forced to sell in 2004- lost money on every single one. If I had sold at the same time, I would have experienced similar results although I would have had a mild capital gain but certainly not enough to offset costs

Which means IQ .. you've done well. You get a gold star from me.

I rarely meet people who do know wtf they're doing (when it comes to property).

Property is a long term investment and one that you need to stick with over the longer period because the market is dynamic. It surges and ebbs in differing cycles but generally, it doesn't drop significantly. It certainly does stagnate which is where the market is at the present.

If your looking at capital growth within the next 5-10 years, then property isn't where it is at.