The New Build – Part 1

Yarra1Yarra2So it’s been a while since I’ve posted a blog about what’s been happening in my world with regards to property. Whilst the major activity for 2014 may have appeared to be the renovation rescue, there was something else going on in the background that had started well before I signed on the dotted line for the reno property; a new place, built from scratch! In late 2013 a new and exciting part of the property journey commenced with contracts signed to build a new 2 bedroom townhouse in a suburb of Ballarat called Sebastopol. All of the properties purchased so far have all been established homes aged between 10 and 40 years old and although they have all been very successful there are certain benefits (and some drawbacks) to buying off the plan and building something new.

  • Firstly, you get everything brand new and one would hope that it means things work, it looks modern, attracts good rent and requires minimal maintenance as it has new appliances and services.
  • Secondly, a new property brings with it substantial depreciation benefits at tax time. With the older properties you can claim depreciation on the fixtures and fittings within the property (carpets, curtains, heaters etc) but if a property is built after July 1985 then you can also claim depreciation on the actual building itself. This can make a significant difference with your tax return and subsequently how you manage the cash flow on your investment. (Check out this previous post for an overview of depreciation).
  • Thirdly, you can manage to save significant money with a reduction in the stamp duty that you pay on the purchase of the property. When purchasing off the plan the stamp duty is calculated on the property value when the contracts are signed. For a property such as this it’s based on a vacant block of land with nothing built on it so is a lot less than if it was an already established home.
  • On the flip side, a major drawback with a new build is the amount of time that it takes. The contacts were finalised in December of 2013 for this property and with a scheduled start date of Feb 2014 for building it ended up being pushed into the second half of the year due to demolition issues with a house that was already on the land. The anticipated settlement is April/ May of this year (I’m expecting May).
  • Another thing that would work for some and not others is that you have little (practically none at all) scope to make any alterations to the design of the property itself. I certainly don’t mind though as it’s a good design and a build for investment, not to live in. That said, you do get a selection of interior options regarding cabinetry, paint, carpets etc.

So activity started in the second half of 2014 and I’ve been regularly stalking the builders to track progress. Keep an eye on future posts to see how the build progressed and if it looks anything like the pictures above!


What’s on the horizon for negative gearing?

symbol-upward-arrow-house_002So it’s federal budget night in Australia and there have been rumblings for some time now that the government might be looking to reform their negative gearing policy for property investors. The most frequent suggestion that I have heard is regarding the possibility of introducing grandfathering arrangements for current property investors whilst restricting any future negative gearing to newly constructed properties. Whilst this has the potential to save the government billions of dollars, there is still plenty of debate as to the flow-on effects that it might have. Whilst on one hand there are those stating that negative gearing has done nothing but escalate property prices for those wanting to purchase their own home (Check out the beer coasters here that encourage abolishing negative gearing), others view it as a key strategy in encouraging investment and maintaining a healthy supply of rental properties on the market. Time will tell after the budget announcement tonight and you can rest assured that whatever happens it won’t please everyone. Check out the links below to read some of the recent commentary on the potential impact on negative gearing in the 2014 budget. Stay tuned!

Negative gearing is on the chopping-block

Budget Night: What’s Going To Happen To Negative Gearing?

4 Ways Your Brain Tricks You Into Losing Money -Don’t fall into these mental money traps.


Money symbol in a thought bubble

4 Ways Your Brain Tricks You Into Losing Money

Don’t fall into these mental money traps.

Money symbol in a thought bubble


Your brain may be to blame for some of your bad money choices. 

By Meg FavreauMarch 20, 2014Leave a Comment SHARE

Our brains are capable of great things – unfortunately, they’re also capable of some mental tricks that can lose us serious money. The good news? Once you’re aware of these biases, it’s easier to not fall into their traps.

Here are four money-losing brain tricks you should watch out for.

1. Your brain treats the same amount of money differently in different situations.

Which of these will save you more money – a coupon for $25 off a $50 clothing purchase, or a voucher for $25 off a $2,000 couch?

They both save you the exact same amount of money – $25. But according to financial journalist Gary Belsky and Cornell University psychology professor Thomas Gilovich…

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The Golden Rules to buying Property

The Golden Rules to buying Property Investing in property is a preferred investment strategy in Australia and it’s unlikely to change anytime soon.

There are some ‘golden rules’ to follow when buying an investment property, rules that have stood the test of time.

Before we jump into those rules, you need to look at the investment and decide if you have a short-term focus for the property or a long-term one. A short-term focus would likely mean that you would purchase it, renovate it and sell it as fast as possible – making the biggest profit possible in the shortest amount of time.  A long-term perspective means that you would purchase the property to hold it, possibly add some upgrades, then rent it out for the highest rent possible.

So what are the golden rules:

1 – Set your rules and know the market: That means know what sort of properties you are after and how…

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Garage Doors — What can go wrong?

Garage Doors -- What can go wrong? With an investment property you need to create a balance between having amenities that appeal to tenants, while eliminating the ones that can create headaches – such as having a pool.

Having an automatic garage door isn’t really a ‘must have’, it’s a ‘nice to have’. But if you have a garage, the chances are it will not be manual and therefore has a high probability of creating issues. When there are issues, they usually need to be corrected immediately, this is especially true if the garage has internal access.

So what can go wrong?

  • Lost remotes are a common occurrence and are usually easy to replace. You need to consider if you will replace them on your dime, or if you are going to make your tenant pay for the loss.
  • Door opener when they jam half way or doesn’t work, they need to be fixed.
  • Broken springs  and…

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Your Investment Property questions answered

I can’t resist re-blogging something when I”m on the front cover!