xizzles

That's interesting... I'd better go check on my rental returns statements carefully then! The agent managing them receive all the correspondence, and I get a net amount (after all deductibles/expenses/admin fees) credited into the bank at the end of every month. I was always under the impression that the Strata Fees payable would have covered the land tax - but, I could be wrong!

Thanks for highlighting that

Beoz

Agree. I have seen plenty of strata's which has council rates component on top of water and strata.

NickyC

There's a Land Tax threshold - below which no Land Tax is payable. Currently it's around $550k in NSW.

The Land Tax for an apartment block is split between all owners. So if you own in a small block (i.e. few owners) in an expensive area your share is more likely to be over the threshold and thus payable. Conversely, if you own in a larger block in a cheaper area your Land Tax share is unlikely to be over the threshold.

I own an apartment in a block of 7 in Coogee and don't pay Land Tax. Yet.

Buzzy--Bee

Are people getting land tax and rates confused? Looks like it from some of the above posts.

Swerv-o

It seems so - Land tax (in NSW anyway) is not levied on your PPR, but would be levied on an investment apartment. The threshold is $540k, and you need to register for land tax purposes, based upon the land valuation that the Valuer General sends out every couple of years.

For strata units, the land value for each individual strata lot is calculated on a proportional basis, using the unit entitlement for each lot and the aggregate for the strata scheme.


S

Beoz

Slightly related topic.

I know a couple of people, and heard some stories from real estate agents recently, of people in Sydney who have struggled to get finance from banks after they have signed a contract for an agreed amount or won an auction - because the valuation was well under what signed for.

Chatting with one agent, he made a sale at an auction recently, and the buyer has had all sorts of valuations done and just can't settle because each valuer is saying he over paid. Well its Sydney - everyone over pays.

Not sure how that is possible when its an auction - auctions dictate what the market is prepared to pay.

Interesting times ahead for both buyers and sellers if the banks are putting caps on what you can pay for a property. OR more importantly, what you can sell a property for.

jacknscoob

Hi guys, the posts have been very colourful and interesting. Pls could someone concisely summarise the advice?

Buzzy--Bee

OK. Buy a freehold house, not an apartment or unit. Depreciate it. Don't earn much income but get good CG. Repeat 5 - 10 times. Retire.

verystormy

Simple reality. Times are very uncertain.

We left WA in March, in the suburb we lived in, they built what was billed as some of Australia's most premium apartments. They were selling off plan in the multi million range with rental returns expected in the 20% plus. Land blocks were at a minimum of .5 millions. All about 6-6 years ago. Today, the apartments are mainly empty what they do earn in rent in about $400!- week and we sold a brand new top of the range house on one of the better blocks for under $500k.

Oz has started producing some very worrying economic numbers and it is looking like what has happened in WA is spreading.

I wouldn't trust an Oz bank with cash more than I would trust a drug addicted skunk. Have a look at their debts and nature of them. This is a country that still gives zero deposit mortgages on mass. Oz banks are stuffed.

In essence, keep it in cash.

Buzzy--Bee

Keeping 100% of your investments in cash is risky. Cash reduces in value year on year and so you're not actually investing by keeping it in cash, you're spending. I agree with this policy if you are investing for the short term but if you are investing for 10 years+, retirement etc then a more balanced view would produce better results.

One rule of thumb for cash (not the only one!) is that the % of investments you have in low risk investments (cash/bonds etc) should be equal to your age.

So if you are 35, 35% of your investments should be in cash or bonds and the rest in shares/properties/LICs/REITs etc. Adjust the % once a year or so as you go through life.

Beoz

As always, I need to pull up your propaganda based on your mining crash experience of Perth to deliver the facts about Australia as a whole.

Perth is a little micro climate and mining accounts for less than 10% of the Australian economy.

I think these little images will do it.

not2old

from the other side of the globe, we have been slumlords owning rooming houses as well as buy2let property for income purposes. Started in our mid 20's till late 40's

When possible we managed to successfully leverage close to 100% mortgage (as fast as possible) on what we had & yes its possible for cash flow or a walk away position, especially the walk away if everything goes belly up.

Never cared if the property prices increased ever - our primary investment model was 'cash flow', which if one plans on doing the buy2let on a larger scale works even better. Imagine 5 or more properties all leveraged with a huge cash flow.

We never ever had property where we paid someone to look after them, nor have a property that had extra fees such as management fees or strata fees (condo fees) which is giving away money - we were the property managers.

Every income property was within a short driving distance, renters knowing we were close & not some day distance away

Now right on age 70 we no longer have the hassle of 'income properties' to worry or think about, or have properties in other states, provinces or other countries. 90% of our dollars is in 'cash', 10% gets invested for small monthly income.

I look at it like this

Take one million dollars at age 65 or 70, even older in as close to a zero interest producing inestment banking type account - then from the million (on top of any pension or supperannuation) you draw $1000/wk from the cool million. It would take near 20 years to burn the million dollars.

Now if folks are selfish old buggers who are bent & determined not to leve a legacy, its something to think about

Reverse mortgages/equity release have been used, even though folks will say its foolish.

Different strokes for diferent folks when it comes to investing in 'income producing properties' such as buy to let or holiday home lets

FWIW



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