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The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.


Category Archives For: Property Investment

Dual Occupancy – with Robert Eckersley

With increasing pressure on many of Melbourne’s inner suburbs to ‘dense up’, dual occupancy is an option for property buyers looking to make a financial gain.

While controversial in many suburbs, it can be done well. Here we discuss in more detail about dual occupancy prospects.


Starting with the non negotiable

When beginning your search for your property purchase, sometimes it’s handy to start with the one thing that is non negotiable for you.

That might be living close to a lifestyle location filled with restaurants/bars etc or being in a certain school zone to cater for the kids.

Building from your absolute non negotiable points will help you get settled quicker. Often many simple ‘likes’ that you may wish to have hinder the process.

Likes may be things such as whether the place has carpets or floorboards, or if the backyard has a nice garden or not. These things can be changed. Things like school zones and lifestyle locations can’t.


Wait for this weekend to pass

Melbourne has been a little rocky over the past few weeks. We’ve seen a slow drop in clearance rates, interest rates rise slightly and the stock market shedding some serious dollars.

This is really a confidence thing at the moment and many people have gotten a little jittery as a result.

My take is this weekend will help shape maybe even the next few months. We have about 2600 auctions to run through until the Queens Birthday weekend. so vendors will be slightly uneasy about pricing.

If you’ve found the right home, then this could be the time to execute. Especially if that home is not a replaceable purchase. If you’re an investor on the other hand, I’d be waiting for the weekend to unravel.

We could be seeing a flattening patch in front of us.


‘Character’ rich property, does not necessarily translate to better rents

Some properties just ooze original character. Often these are period homes; take for example an art deco apartment.

When it comes to the sale price, a premium is paid for this type of property. On the rental side however, they don’t quiet reach the same heights.

Fact is that most tenants pay for livability and functionality of the property rather than the ‘character’ aspect, which is so highly valued in the eventual sale price.


The importance of a healthy body corp fund

Seems like very few actually look into the financials of a body corporate.

Is it in surplus or in deficit? Always a quick look over the financials in the Section 32 and put in a call to the managing owners corporation agent, to help you understand this.

Evert property should be looked at like buying a company. It’s financials are important.


Avoid the headlines

Some recent data pointing to a bubble situation not occurring, is making some big news at the moment.

Many take the headline of that news article and leave it at that. Make sure you read any info coming through, evaluate it, see who it’s coming from and make your own decisions.


Advice for Landlords

Frank Trotta from Trotta & Co has recommended some good advice for Landlords.

Here’s some points to keep in mind for deductions this financial year:

Rental Properties – travel expenses

Editor: The following is about claims by taxpayers with rental properties and demonstrates how we can help you with those claims.

What travel expense can taxpayers with rental properties claim?

Taxpayers can claim:

  • Preparing the property for new tenants (except for the first tenants)
  • Inspecting the property during or at the conclusion of the tenancy
  • Undertaking repairs, where those repairs are the consequence of the damage or wear and tear incurred while rented out
  • Maintenance of the property, such as cleaning and gardening, while it is rented or available for rent (Try Pauls Cleaning, Meticulous Cleaning or Top Shelf Cleaning for Melbourne end of lease cleaning rates)
  • Collecting the rent
  • Visiting their agents to discuss their rental property

Domestic travel requiring an overnight stay

A rental property may be located so far from where a taxpayer lives that it would be unreasonable to expect them not to stay near the property overnight when making an inspection.

If this is the sole reason for the trip, they are entitled to claim a deduction for travel expenses incurred in travelling to the rental property.

Where an overnight stay is involved, they would be entitled to claim for meals and accommodation.


My thoughts about 1 and 2 bedrooms

It’s common to see many people with line ball price ranges that have the option to either go a terrific one bedroom apartment or an average two bedroom apartment.

Which to choose?

The answer really depends on the location and price range. I think a two bedroom option will generally offer a better return on investment. Below is a common choice:

Price selected: $450,000.

Option 1: 2 Bedroom apartment with no outdoor space, larger block. Possible rent: $430 per week.

Option 2: Larger 1 Bedroom apartment with courtyard, car space, character. Possible rent: $390 per week.

Option 1 produces the better rent, option 2 carries more of an owner occupier feel. Therefore it may be more of a ’emotional property’ which could see it being highly desired when re sold.

Once again, every location, position and market works differently. Your situation and grand plan becomes the decider.


Calculating the rate of return on an investment – a simplified approach

I’m often asked about the rate of return on a property.

The rate of return is a good way to give you a quick and simple understanding of how an investment is performing or is likely to perform in the future.

The methods for determining the return on an investment can become complicated such as the compound return on investment, so for today I’m just going to concentrate on the average annual rate of return, I’m sure however that many other people can cover this in more depth than I can.

Lets say you’ve purchased a house for $800,000. The expected rental yield of the property is $650 per week.

The annual rate of return can then be calculated by the following:

Annual rate of return = weekly rent x 52 weeks /  (purchase price) x 100.  (Whereby, the purchase price is the total investment cost including stamp duty and all other purchasing costs)

The annual rate of return for this simplified example is $33,800 (annual rental yield) / $800,000 (purchase price) x 100%=  4.3%.

I’ve used approx figures in this guide. Also / = Divide.  Feel free to send through any comments.