Bix

Hi Donna,

We were at the stage where a lot of our main pieces were due for renewal if not immediately then in the next year or two. We had looked after it (in spite of having 2 boys!) but really did not want to pay for it to go to Aus.
Therefore as we could not sell the house and were going the rental route we thought rent furnished.

We discussed this with the rental agents who would do what we wanted but pointed out the implications which are far wide. Did we fancy disputes on damage against normal wear and tear ? Did we have everything fire certified ?
Did we want to be responsible for repairing every little thing that went wrong ? The list goes on.

The answer was no, we wanted it to be as easy as possible allowing us to concentrate on settling in Aus; very much "forgetting" our UK property. We therefore disposed of it all, that is selling what we could and giving away what we couldn't sell. The only bits we ended up shipping were dining table and chairs and two single beds.

If we could do it again we would do the same thing except not ship the beds. They are a different size in Aus and the local ones are longer for my lanky sons who are 6' 2" and 6' 4" and still growing.

So really you have to weigh up the risk of renting furnished against paying to ship it, against selling it, against indefinate storage, against replacement cost in Aus. Age and condition of your stuff comes into play of course.

DIMO8

Thanks Bix....very useful information........like you it would probably be some dining room furniture that is relatively new......Just another quick question....your rented accomadation in Oz, are they of good standards?, and what contract terms do they usually prefer?, and are there any agents that you could recommend to me?.
Donna

Bix

Donna,

How can I concentrate when your avatar is flashing at me like that ?

Mmmmmm.......difficult question as it is so subjective.

I can only really comment on Cairns from my own experience and in that case there are properties to meet all standards and all price brackets.

The usual rental term asked for is 6 months minimum.
Large majority are unfurnished but they include cooker / hobs and maybe dishwasher.

Generally the further out from the CBD the more you get for your money but remember the need for transport.

I would recommend staying in an apartment or motel for a few weeks to give yourself time to look around the district. The Saturday post has a list of rental properties in it so we would just drive around each week getting used to the areas.

Don't rely on write-ups or property pictures. Do a drive by and see them. We liked lots until we physically saw where they were ie an "unpleasant" area or just next to something undesirable.

The very large majority are single storey. Quality seemed fine. The Aus floorplans are what we do not like. Not exactly condusive with multi function family activities but more of the newer properties were better in this respect. Open plan is the order of the day due to the heat and looks lovely but is not practicle in many ways. ie bedrooms surrounding living areas.

A rule of thumb here is that rental cost is AUD1 per thousand. So a property valued at AUD 300,000 would rent for AUD 300 per week.

It would be unfair of me to comment on any agents as we had very little contact with any. We obtained our rental through chatting to the gardner at our apartment. His wife worked in real estate and looked out for one for us.
They are called O'Connor & Gay and have been very efficient but they maybe just a local firm.

DIMO8

Thanks again Bix....will let you know how i get on.
Donna

Ps..as for not concentrating..........just concentrate on her head only... forget the rest..... ...

jonshep

Bix

Rental yeilds are very low now, Most repayment morgages will not cover the costs involved.

Convert your mortgage to a buy to let. Change to an interest only morgage over say 10 years. You will still only just about break even( £100 per month tucked away for boilers, etc)

You will need to leave between 20 -30%(cash) equity in the property. The rest you can take with you to Oz.

This way you still have a little stake in the UK property market and your investment is based on capital growth. Stats over the last few years show that most property values double every 7 years.

Hope this gives an angle, and no I am not a estate agent.

Jon

Bix

Marc,
Send a message to one of the moderators.
They can have your request "pinned" to the top of the forum page as a Read Me for all to see.

ABCDiamond

Morning Bix
Is that still the current average for rents up in Cairns ? It used to be that down in Sydney and here in Brisbane, but it changed a bit when the prices took off.

Around here a $300k house now gets about $250pw in rent.
And for anyone interested in the cost effectiveness of renting out. A $300k property with 100% mortgage and other costs, would end up costing $450 per week to own it, but bringing in a net rental return of $226pw after agents costs etc.

donna paul

Where would you get a $300k 100% buy to let mortgage from? Surely there must be some tax advantages to taking a loss on the rental income? There seem to be so many people buying into the investment market here.

BTW we are renting a 4 bed lowset in Forest Lake open plan and very much as described. value approx $265k costs us $260 pw. will be looking to buy our first residential home in the next few months but also want to buy an investment property too. any advice would be welcome.

Thanks

Donna

ABCDiamond

Some banks have been doing 106% mortgages, but you often need other security to give to the bank.
eg: Say you own your own house valued at $400k, with a $200k mortgage, and you wish to buy another at $300k. The bank will say $400k + $300k = $700k x 80% = $560k less $200k existing mortgage = $360k available to borrow. And that's without mortgage insurance !! Other banks will go much higher but charge you a few $k for insurance.

However, as prices have stabilised in many areasd, and some have dropped, the lenders are less likely to offer the same terms.

Advice on Investment property ? It depends very much on the property, and the area. Some areas could still drop, others may rise more, but not with the same rate that we have had over the last few years.

Tax. Yes, any loss that is made is adjusted in your income tax. eg: in my first example with a loss of $224 per week, there would be a basic net tax reduction of between $67 and $108 per week, to be offset against that loss, bring your net cost down to as little as $116pw. (depending on your tax rate)
This tax reduction can also be increased by use of depreciation claims.

The main reason people have been buying investments, was for the capital gains recently. I can see that the numbers of "mums & dads" investors will drop off now, leaving the investments again mainly for the long term serious Property Investors.

I have had to advise a few people recently to seriously consider buying or not, as they planned to sell again with 3-4 years. With costs such as Stamp duty, Agents Selling fees etc, it seriously trims down a normal capital growth, and may not be worth it in the short term.