building surveyor

Trevor in Berick 97072179; building surveyor who might do inspection

 

A building permit cannot be issued after it's built.

Mildura college lease

http://www.abc.net.au/news/stories/2008/10/24/2400015.htm
Posted Fri Oct 24, 2008 9:50am AEDT
Map: Mildura 3500
The Mildura Rural City Council will push for an overhaul of the city's college lease scheme.
The scheme was set up by the region's founders, the Chaffeys, 100 years ago, and consists of 184 commercial and residential properties that are subject to college lease fees.
A review has found it is showing a return of only 2 per cent a year to assist the region's schools.
An assessment by a Sydney consultant commissioned by the Mildura Rural City Council has found returns averaging 6 per cent could be achieved if the land was sold and the proceeds reinvested.

http://www.mildura.vic.gov.au/page/PagePrint.asp?Page_Id=2581
Community Loses On College Lease: Report - 23/10/2008


A Mildura Rural City Council-commissioned report has found the region’s college lease land is returning only 2.1% per annum to local schools.
There are 184 properties in Mildura Rural City that are subject to college lease and an independent assessment conducted by Sydney firm AG Private Advisory has found that higher returns on this level of investment could be brought forward to local schools through more conventional financial means.Upon receiving the report at its October meeting, Council has committed itself to proactively facilitate a change to the Mildura College Lands Act (1916) enabling the College Lease Trust to sell leased land and reinvest proceeds in secure investments, generating improved returns and opening up leased land for development.A 2004 Ernst and Young report found the value of College Lease holdings was $39,338,000.Councillor for Community and Economic Development Vernon Knight said College Lease agreements were causing financial hardships to many leaseholders.“The financial imposts imposed by increasing college lease rentals are significant for many families who lease land from the College Lease Trustees,” Councillor Knight said.“The report shows that a conservative cash investment strategy implemented since 1990 would have earned an average of 6.6% annually. It is thus clear that there are potentially many more effective investment options that could deliver great benefits to the region’s schools while relieving land owners, many of them families, of the financial impost imposed by college lease agreements.“This report confirms that current college lease arrangements are an anachronism that is holding our community back and not delivering true value for our education sector.”

http://www.mildura.vic.gov.au/page/page.asp?page_id=2031

Council Campaigns On College Lease - 27/7/2007
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Mildura Rural City Council will be lobbying the Victorian Government to help ease the squeeze on some owners of land covered by College Lease.The move follows a recommendation Councillor Vernon Knight put to the July Ordinary Council meeting held yesterday.
Current Victorian legislation requires Council’s valuers to consider College Lease property to be sub-divisible land in the event that its zoning would make this possible as if the property was unencumbered freehold.This is in spite of the fact that subdividing College Lease land is generally unprofitable.This discrepancy can have significant effects on the rates some college lease holders are required to pay. In line with college lease rental land owners pay to the College Lease trust annually, the requirement that college lease restrictions are not considered in the valuation of properties can have significant financial implications.While adopting its Hardship Policy which aims to assist people who are experiencing difficulty paying Council rates at its Ordinary July meeting on Thursday, Council also adopted the following:“Council make representations to the Planning Minister in relation to the provisions of the Valuation of Land Act which requires Council Valuers to consider College Lease property to be sub-divisible land in the event that its zoning would enable sub-division were it not College Lease.”Following the adoption of the recommendation, Council will be seeking to amend the Valuation of Land Act (1960) to ensure the definition of Capital Improved Value takes into account the fact that College Lease land cannot be subdivided profitably and should be valued on that basis.The act states:"Capital Improved Value means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realise at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require." Councillor Knight said he understood there is a situation which has affected a number of people in Mildura. “It’s clear that the whole concept of College Lease would not have been considered when the Valuation of Land Act (1960) was framed,” Councillor Knight said.“Given the residential development that often adjoins such properties, Council valuers are required to consider the capital improved value on the basis of its potential value for subdivision in spite of the restrictions on subdivision that College Lease places.“Anomalies such as this again raise questions about the appropriateness of College Lease in its present form and the need to review the nature of the trust.”

Better building price

betterbuildingprices.com.au
1800833956

Process:

pay 50% Design report, bal. 50% on completion of the report. The report needs to comply to council regulations. BBC then find the best builder tender, Design report fee is then refunded. Builder pays BBC fee.

single story design $4500; double story $6000
check with Archicenter what their design concept costs.

Reno tips

to paint bathtub and bathroom tile: use white knight tub-tile paint
to paint cupboard doors and benchtop: use white knight laminate paint
to paint splash b ack: use white knight tile paint

use new chrome handles
use heavy duty cleaner for stove and rangehood

Port Hedland: major mining town. building cost at premium if you hire local builders as the mines pay overprice.

shop online at harvey normal commercial arm and have a/c etc delivered to hedland, then pay a Sunshine coast builder to go to Port Hedland to build it. Total cost is 60% of hiring port hedland local builders.

 

Ecobuilding systems - cheaper building and energy efficient, std 3 br house can be erected in a week,

 

Moree, an agricultural town in northen NSW, cotton brings in lots money - it's got a good foundation. It's never going to be a ghost town, and never going to be a huge flyer. It brings cashflow but not to get excited over units - sb. else already made money. Towns like Moree are generally pretty good with dividing up. A typical little chunkers, they will become more and more positive as the years go on, so you can have more growth properties elsewhere. There are a lot of termites there, do the building and pest, make sure the building is low maint.

 

Ballarat is another nice chunker town. It's a number of rural industry around it. Look for value adding oppurtunities.

 

 

Deed vs Agreement

1. there is no need for consideration for a Deed to be a binding contract.

2. Deeds have a number of execution requirements. The term "signed, sealed and delivered" is a requirement for a Deed. 

3. Limitation period for which a claim can be brought for breaching an obligation is different for Deed and Agreement. In Queensland, a claim for a breach of an Agreement must be commenced within six (6) years. However, with a Deed, the period is twelve (12) years.

ripple effect

Nov 07: Middle Park and Port Melb had 50% and 30% growth in the previous 12 months to Nov 06?

Nov 08: The adjoing suburbs on the bay Elwood, St Kilda and Elsternwick  had 18.2%, 35.3%, and 24.2% growth in the 12 months to Nov 08. All 2 suburbs's 10 year growth rate lie between 10-12%.

 

Sought after public school:

 

McKinon secondary college

Frankston high school

 

Reno value add tips:

 

 

1. Extra storage space:  BIR (double height hanging space and to get as compartmentalised as possible), vanity with cupboard, drawers into bathroom, cupboards under stairs, storage in attics, loft in garages,

2. put laundry in cupboard or under bench, and convert existing laundries into bathrooms with all the plumbing in place 

3. substitue or create a wall with shelving to separate two spaces

4 Shed: blend the shed in with the home and create a concrete based floor while installing suspended platforms in the ceiling for better storage and to keep as much off the floor as possible

5. The lighter the house feels, the more spacious and applealing it will seem to prospective buyers and renters (add skylight, or open up the back of the propert on the backyard with French or Sliding doors)

 

 

 

 

 

 

 

 

Room by room rental agent for Croydon

Benchmark Real Estate
03 9877 0555

I found a rental ad from them for a room by room leasing in Croydon.

sound proof walls

We are looking at a property that backs into a railway line. Apart from the concern for noise, everything else looks perfect.

I looked up online for a cheap and effective sound proof wall. Here is the search result:

http://www.modularwalls.com.au/

They don't just do sound proof walls, the Ali wood fence makes the outside of the house so much better looking, and masonry looking "garden wall" certainly make the backyard with swimming pool now look million doors. Hm, fencing is a great cosmetic reno item - so, buy house with ugly front fences! (with a discount of course).

It says the garden wall is ideal for noise reduction from a main road too - must check it out!

Their victorian agents are:

* MelbourneModular Walls - Victoria Ph: 1300 556 957 Mobile: 0434 218 801 Email: gardenwallsvic@optusnet.com.au
* BendigoHeuron Screenline Pty Ltd Ph: 1800 001 653Email: sales@heuron.com.au

contacts

Insurance broker (commercial, business, residential) - James Germantis 03 94694673

international investing- US

If you invest in America, there are 2 structures available: LLC (limited liability company) or C-Corp, the shares of the company is owned by the trust in Australia.

 

Because US is a broad tax country, you can quarantine the income in US. If it's not a broad tax country, you have to pay tax there as well as in Australia, no credit for the tax you paid over there.

 

How to bring back money:

 

1. money initially sent over for investment can be brought back tax free

2. I can charge a consultancy fee to the LLC there, so the LLC get a tax deduction there but I'll have consultancy income in Australia

3. Different to Australia, the cost to go over there for inspecting future purchase is deductible under US tax law.

4. LLC lend money back to Australia

 

The US insurance companies don't normally have landlord insurace equivalent. Only normal building and content insurance is available.

 

To get a credit rating with the banks in US, apply for a credit card and start using it. Generally >4 units are regarded as commercial over there.

 

Same as any investing, sensibility analysis and opputunity cost analysis should be performed. For the additional risk investing overseas, you need higher return (for yield or growth) to compensate it.

 

house relocation

1. rule of thumb - it cost about $40k to relocate and reconnect a house

2. make sure the relocater has adequate insurance - say if the house got damaged during transportation

3. finance - banks usually only lend on the land. After the house is relocated and reconnected, and got the permit from the council, then the house&land could be refinanced as a package

4. permit - check with council and town planner before relocation whether the house would ok to put on the land. - We don't want neighbour objected after relocation!

 

 

Transitional Growth

• Look for properties in areas of growth lag
• fundamental analysis: industry, population,infrastructure (new hospital, new schools,new shopping centers-where are the big boys spending money next? employment, transport, building trends
• adverse public perception
• Media attention
• look for emerging economies - do you own micro economic analysis
• prime location- water views, proximity to amenities
• rise in renovation and new constructions
• stage one of new developments with big marketing budgets - it's vital to get in early
• cost of living of the city reflects housing price level of the city,
• display homes - get on the waiting list of the big developers for their next display home
• due diligence

 

oppurtunities are often disguised as hard work and most people dont' recognise it!

 

what to pay for a business

buying business, target return is 20% after paying wage to owner, to cover the extra risk of being in business.

20% equals 5% term deposit return, 10% for risk, 5% for illiquid asset risk

 

normally when you buy a business, you ask for a few year's tax return to look at. Normally you are given 3 years.

 

Adjust income that doesn't affect the purchaser, e.g extraordiary items, voluntary exp such as donation, motor vehicle 

 

average profit of last 3 years

 

how much do you pay for goodwill, it depends on the busines, some will be 3 times of the profit, some just 1 time

 

good will tax for seller: 50% discount, 50% discount to small business owner, can roll over.  Equipments tax is different. It's in the seller's favor to allocate more return to good will

 

Look at the business and look at how many of them incl. freehold. sometimes the owner got so fed up, they discount everything including freehold.

 

There are agents specialise in cash business, easy to managing business

 

keep investment debt and personal debt separate, split the loan!

commercial proerty etc

airspace

volume metric title - qld

zoning

 

location, size, resellable   

 

 

1st thing you look at how much you need to put in, and how you can borrow more so it requires less capital, and do your oppurtunity ROI

 

cbd service departments: high fee, borrowing 70%, if<50sqm, if it's just one room like a hotel room, it's hard to finance, hard to sell ,capital growth might be limited. If you have a poor site manager, you can't do anything with it.

 

big commercial property - vendor finance a very good possibility. other things to look at include if they are on market rentals; strata title possibility : ask the owner to strata title it and I buy some of them

 

commercial lease option is for the tenant to opt out. There might be  a clause to review the rent to market rental on exercise of the option; in terms of who pays for outgoings, it stays with the terms of the original lease,  you can't just change it

property data solutions

 

room by room rental property insurance can be  a big issue. If the property is not zoned for this type of use, your insurance is invalid

 

Property under managment:

check efficiency of management, how?

check all operational contracts and side deals

what's your control

what's your exit plan

what's your disaster plan

can you sell the managment only, and you keep the free hold

commercial proerty price and due diligence

commercial property price works on capitalised rate= rent/cap rate, if it's vacant, it still has some intrinsic value depending on the building material, time on the market, vacancy period

 

is there high vacancy in the area, high vacancy of this type of property in the area, zoning and permitted use

 

more abt Trust

A good trust deed should be able to be amended so the trust can continue after 80 years. Appointership and the shares of the corporate trustee needs to be passed onto the next generation in the will.

family court sees through structure, so you need to shift the interest of the trust to your children instead of yourself, and that would carry some weight.

Piggy bank trust owns all the shares of the corporate trustees. It owns nothing but shares, not property, not business, not equipment. Therefore that's the only trust can have a personal trustee.

not every benefitiary needs to be named in the trust deed. If they are, then bank require them to sign the documents when you borrow!

set up a testimontory trust within the will to quarantine the benefit of the children, children will then have tax free threshold just like an adult. It's very important to think who can be the trustee of the trust when there is minor children involved, as the trustee has all the power and can flitter all the assets away.

If trust is not doing anything, you don't need to lodge anything, so no ongoing cost if inactive.

buying more properties in trust cost more in land tax as they have a lower threshold. When the entities are grouped, only the entity that owns the property pays the land tax. If a corporate trustee owns a few different trust, each trust pays their own land tax

Appointership is a job not an asset, so it cannot be taken away from the bankrupt - a court judgement when the other side try to take over the bankrupt's appointership of a trust.

Gifting of assets to trust:

If you borrow money from family home and gift the mone to trust for purchasing investment property, you forgo the right to claim interest deduction. In the event of bankrupcy, they can clay back the gifting up to 4 years ago.

It's better to have a signed and witnessed Deed of Gift to record the gifting. Sometimes you can have a blanket deed to cover continuous gifting

Trust essential

In most cases it's not worth putting family home in a trust in AU as you give up your capital gain tax discount.

 

Have a registeed mortgage over your own property, so you stand 2nd in line behind the bank

 

To move from PPR 1 to PPR2 , and use PPR1 as investment property

 

PPR1 worth 600k, mortgage $100k, sell PPR1 to TrustNG for $600, Trust NG (Me the director of corp trustee) borrows $600k and use the property as investment, the interest is fully deductible, but we need to have income distributed from a different trust to take the tax benefit

 

I get paid $600k by Trust NG less $100k mortgage, I have net $500k to buy PPR2

• The settlor must NOT be a beneficiary, or it will render the trust invalid.
• Settlement fund ($20 or so) must be a donation and it cannot be invoiced for, or it will render the trust invalid.
• Trust CF+ or Trust business distributes profit to Trust NG, but the trust deeds need to allow income to be distributed between trusts.
• A good deed should also allow change of trustees
• Divorce courts will see through structures if the assets are accumulated during course of marriage
• no  more than 4 trusts under 1 company
• Don't put different risk class assets in same structure (not trust!), as liability can flow from Trust 1 to Trustee then to Trust 2
• Piggy bank trust owns the shares of all the non-trading trustee companys. I am the trustee of the piggy bank trust.
• I should be the appointer who can change trustees.

 

 

 

due diligence for cf+ properties

1. consistent strong demand for rental property
2. relative low purchase price
3. Make sure the regional area is large enough
4. population > 10000, except if it is within proximity to a regional town with large population
5. major industries
6. how seasonal are these industries
7. potential downturn in these industries
8. expected growth
9. historic growth
10. external forces that may affect the town
11. what demand is there for rental and what types of properties are in demand
12. historical capital growth rate for the town
13. is there an over/under supply of rental

 

 

street advisor

A resource to find out what others think of the street in the suburb;

not sure who made the comments - could be just the proud owners. aha

 

http://www.streetadvisor.com.au