property development

[kevt]

Always wanted to do property development/ renovations.

just wondered if anyone is building / renovating an invetment property and how you got started, seems you need a good bit of money behind you and you need to get property or land at a good price to make it worth while.

Also do you sell the property straight away or rent it.

just wanted to hear peoples thoughts and ideas.

thanks
kevin

[smit]

stamp duty is a big killer............................................ ..

[kevt]

i just wondered how people make money from it, as a painter of mostly new houses i paint a lot of investment properties and you see the same people building several house at a time, which makes you think there must be money in it.

someone please tell me how to make some money.

Kevin

[Diane]

There is a company - I think they're called Ironfish? - who hold free seminars talking about investment properties and how to make money from them. A lot of it goes over my head but the term "Negative Gearing" rings a bell! Something about the tax laws here making it beneficial. There are an awful lot of the costs involved with an investment property that are tax deductible, so if you are earning good money and paying lots of tax already, it can reduce that, then the income comes from rent, and the long term investment from the property value rising (I think). As I say, a lot goes over my head, but google Ironfish and see if you can go along to one of their seminars (Property Investment | Ironfish - Sydney Melbourne Brisbane Adelaide Auckland - I did it for you!) and I'm sure all will become clear!

PS Stamp duty means it is beneficial to build a new property I think as you only pay stamp duty on the land value, and depreciation on all the fixtures and fittings is tax deductible from memory so obviously as the depreciation curve is steepest at the start of the life of the asset, if this is a big factor in your financial calculations a new rental property makes sense, not to mention the fact that rents for a newer property can be higher.

By the way, just thought I'd add, go along to the seminar and get the info and find out about all the tax implications and stuff, but then look around and don't necessarily use all the people they suggest - mortgage brokers, realestate agents, property management companies, accountants etc - without checking out alternatives

[Jim Scott]

Hi Kevin,
I would be happy to have a chat with you about this anytime you like. Yes, money can be made from property investment, and there are "lots" of different ways to do it. But, obviously there are risks, and you need to understand them before you jump into anything.

Beware that many property investment advisors are paid referral fees, from developers, for recommending their clients invest in properties the developers are selling. The referral fees can be "a lot", many thousands and really this is included in the price you pay for the property...

In a lot of cases, the properties can be "off the plan" (arguably a high risk investment strategy at the best of times), sold as a straight deal between the developer and the investor. This type of transaction can also be considered "off market" because no real estate agents are involved so the property may not be marketed to the general public...

So, the big question is are you paying a fair price for the property??? I am personally aware of people who previously had advice from so called property investment advisors and the Bank(s) valued the properties they bought 10% or more below the price they paid! What does this tell you about the investment advice you received?

So, caution and research is recommended.

[Andrew Williams]

someone please tell me how to make some money.

Kevin

Paint some more houses KT.



No quick win I'm afraid unless either big risks are taken or you are very lucky.

[kevt]

Thanks everyone for the advice.

I guess if it was easy to make money we would all be doing it. I suppose like a lot of people you take a look at your life and think about how you can improve it.

anyway like you say Andy i better paint some more houses, i guess your'e best to stick with what you know, at least for now anyway.

kevin

[Andrew Williams]

You know I am only joking Kevin.

It's great that you are looking to improve your situation and investing in property is a proven method along with many other things.

Wealth Creation is a marathon not a sprint. :)

Andy

[Rammygirl]

To become more wealthy..........want less and do more!

Someone more eloquent than I said something along those lines - but there is something in it. We want more money to have more stuff........doesn't always make us happier!

[Diane]

I'm always instantly suspicious of anyone that tells you "yeh, do this and you'll make loads of money" - if so, why haven't they done it themselves and gone to live somewhere exotic, rather than slogging around telling everyone else? Call me a cynic but.....