Apartments

[Tim]

I like advice, trying to find 2 bedroom apartment in city for 2 daughters. Cannot understand $350 will rent only a small aprtment you will likely go insane in 45m2.
Where can I get a better deal.

[spector]

quote:Originally posted by Tim

I like advice, trying to find 2 bedroom apartment in city for 2 daughters. Cannot understand $350 will rent only a small aprtment you will likely go insane in 45m2.
Where can I get a better deal.

Can I suggest that one of the best things about leaving home is actually 'leaving home'. Going to varsity in a new town, having to find your own flat and deal with crap flatmates who eat all your food and don't pay their bills etc is actually one of the best places to start learning the realities of life. You may be doing your daughters a disservice by providing them with their own place to live.

Just a thought.

[Tim]

Interesting to see if he does get $500 week rent.What increases property returns is leverage which is difficult to do with GPG and IFT.

[arco]

From a US site 'Smart Choice Realty', but the figures should be similar. There are also some Estimated Appreciation Tables on the site showing end values, etc.

http://www.forsmartchoice.com/charlotte.asp

[i]Housing can be a good investment

How do stocks compare with home investment?

The National Association of Realtors reports the median existing-home price increased a little over 4 percent last year, while Freddie Mac said home values increased 7 percent in 2000. At the same time, stock indexes finished in negative territory.

However, the true return on a home investment should not be based simply on home appreciation, but also the amount leveraged. Homebuyers typically use their own money to cover only 5 to 20 percent of the home purchase price, yet the appreciation they realize is based on the total value. In other words is a leveraged buy-in.

In addition, homebuyers receive tax benefits for their investments, in the form of deductions allowed for mortgage interest and property taxes. This leveraging of borrowed funds gives housing a return far in excess of the market's appreciation.

"Housing is not a quick-in, quick-out investment.” However when purchased for the long term, housing is one of the safest investments a consumer can make. In addition to the savings accumulated through a buildup of equity and the tax advantages, a home provides shelter. Absolutely no other investment provides this benefit.

How does buying stock on margin compare, you may ask? Most people can only buy stock on 40% - 50% margin, and you cannot buy stock on margin in a tax-advantaged account such as a 401K or IRA. But for the sake of argument, let's say you purchase $15,000 worth of stock with the original $10,000. Now let's assume that the stock and the house go up in value by 7% over the next year (a likely probability in the case of the house, since the average home price in the United States has gone up 7% per year for the past 50 years.) At the end of the first year, our stock investor has made the tidy profit of $1,050 ($15,000 x 7%). Our property investor, on the other hand, has made $7,000 in equity on his or her rental home ($100,000 x 7%). PLUS the tenant has paid down some of the mortgage (albeit a very small amount in the first year). The effective rate of return for our stock investor is 10.5% on the original $10,000 invested. Our property investor has made a 70.0% return on his or her initial $10,000 investment.

Much like stocks, the yearly increase is a compounding return on investment. Unlike stocks, property rent will rise over time and the house will yield a positive cash flow (income) as well as build equity. Some stocks may pay a dividend, but it pales in comparison to the income that will be derived from property rent and appreciation over time.

Property investments also have leverage advantages over stocks. In the example above between the investors, the difference in the rate of return (10.5% stocks vs 70.0% property) is a result of leveraging. A bank or financial institution will lend you most of the purchase price of real estate since it is considered a low-risk loan. Although this money is borrowed, you as the investor do not have to share the increase in property value with the lender. In effect, the lower your domain payment, the higher your rate of return will be.

As you accumulate property and it appreciates in value, you can refinance, obtain second mortgages or use other financing methods to purchase additional property. As rents increase over time, the higher rents will most likely cover the additional equity utilized. This is an example of the tremendous advantages of leveraging available with real estate investment. In time it is entirely likely that your real estate holdings will provide the equity to purchase more property, relieving you from using your personal capital ("sash on hand") to keep investing.

Another distinct advantage property investment has over other forms of investing are the tax breaks. While your rental properties are appreci

[Steve]

Does anyone know where to get a comparison of current market rentals vs existing rent guarantees to try and estimate the capital effect once the rent guarantees expire?

[Jess9]

What are the most popular apartment blocks in CBD fringe (and non-leaky etc ; )??

[Bel]

quote:Originally posted by belgarion

Find below a letter from a private seller of an appartment ...

Hi [Belgarion],

Just wondering if you are still looking and interested in an apartment.

I've had 2 conditional offers for $320k both of which have fallen through due to finance.

I've relisted at enquiries over $310k, looking at $315k being my minimum target. I've also listed it to rent and had over 200 views in 3 days, at $525/wk, with a couple of people quite interested.

Therefore if it rents around $500/wk the numbers should stack up as follows:

26000 Rent Less
3500 Body Corp
1200 Rates
Equals
21300 Per Annum Income

Divide this by the purchase price to get your return and your return is over 6.7% which is better than the average residential return of 5%.

The apartment below me just sold for $350k with an extra carpark, these being $30-$40k in this particular building. That places mine around $310k however I've spent $5k renovating it and it cost $5k per level as you went up the building, which effectively gives mine an approximate value of $320k.

Anyhow if you are still interested then please let me know.

Kind regards,
[name supplied]

Should I email him/her back and say that few investors are very interested 6.7% when GPG and IFT (both of which I hold) return 20% per annum? [}]

According to my property calculator you would need a deposit of ~$85,000 to make this property positively geared. ($300 a year lol). Assumming after inflation capital gain of %4.4 that will yield you a %8.39 return or IRR of %22.00

But only while the depreciation for a tax return holds true!

[Tim]

How about details about the apartment, you never know there may be a buyer on this site. Out of interest which building is this in, how many bedrooms and aprtment size. Thanks

[Steve]

quote:Originally posted by belgarion

Out by a couple of months ?

We bow before you...

[Crypto Crude]

Ive just been over to China....
and While I was there I got a chance to have alook at a few apartments, traditional housing as we are used to is non existant (in citys), and with land ownership rights controlled by Govt, makes apartments the only real way to go ahead in the industry...
...
looking at a brand spanking new apartment Block in Harbin, 30mintues drive from central city, all Infrastructure, and motorways in place...... 70meters squared...
seems quite small, but was fairly spacious for how the Chinese live (IMO)....
190k Yuan... or 34K NZ...
could negotiate slightly better deal...
Great mate wants one and suggesting to me....
any thoughts?
[8D]
.^sc