0 Followers
Hi,
I heard an ad on the radio today about buying property in Brisbane if you want to help your children. We are thinking of helping our eldest get into the market and we will have to look outside Sydney, is Brisbane the right place, what other places do people suggest. Our budget would be up to $700,000 with our son owning around 25%?
Responses
Hi Geoff,
There are hundreds and hundreds of property companies who are desperate to sell Sydney and Melbourne buyers property in other states.
The risk is that you buy a property that sounds cheap by Sydney standards but is actually inflated in Brisbane. You can buy a 4 bedroom home within 20kms of the CBD for $350,000.
The main protection is to ensure that you have an independent valuation conducted on the property prior to committing. If a bank values an established property, you can expect that it will be close to market price. If it is a newly built property, it will get valued about 4-5% lower than contract because of the GST component that the builder has to pay
Best of luck with your search
Cheers
Scott
Hi Geoff,
You need to speak with a property advocate, I have had great experience with the team at Performance Property Advisory. You should expect to pay a fee for advice, if you aren’t you can guarantee there is some kickbacks built into the price you are paying.
First and foremost though you need to work through the estate issues. How will you own the property? How can one person buy the other out? What happens if your child partners and wants their money out? What happens if you or they don’t keep upnrepayments? etc, etc. it’s all well and good to say we’ll work it out but money does funny things to people & can tear families apart. Best you get it all out in the open upfront.
All the best.
James
G'Day Geoff,
I think the earlier you get your son into property the better, BUT......you have a couple of things that you will want to have sorted out before you sign on the bottom line:
1: ownership share of property: this has a few thing to consider:
a) first home owners stamp duty exemption. If your name is on the title then you are probably paying full freight on the stamp duty
b) what is the "master-plan"??? if it is to transfer the property to your son, then you will be up for a second round of stamp duty and CGT later on.....perhaps you can still help your son without having your name on the title???
c) what happens if(when) your son finds a partner and the perfect balance between parents and child evaporates because his new partner wants to run the show (this is more common than anyone would expect)
2: Property Marketing:
I have seen lots a people get trapped into arrangements where they are fed a line about a property, taken for a ride, and find out too late that they have paid massive overs on a property because they trust the advisor, and have no experience in the area in which they are purchasing.
Things like a guaranteed rental return and up front market valuations prior to construction are massive red flags for me. I have seen people find out that they have paid up to $100k OVER what they could have paid for exactly the same property......but once you are signed up you have no choice but to hang on to the property and wait for the market to catch up with you.
And its not just properties in Queensland. there are property spruikers operating in every state. So DO YOUR OWN RESEARCH!!!!
My advice to you is talk to a qualified and experienced professional about the issues you may face. I suggest someone with CA or CPA after their name, who can demonstrate they have runs on the board in this area. A little bit of advice before you start will definitely be worth the expense!!!!
good luck
bc
Geoff, I also live locally to you and have my office in Baulkham Hills. With a budget of $700k, you can buy property in Sydney. It wont be a Kellyville McMansion, but as a first home for your son, does that matter? Was your first home your current home? I'm guessing it is not. There are new homes at Box Hill within your budget. Smaller homes on smaller lots certainly, however they are very popular with First Home Buyers. Buying interstate can be fraught with danger. My advice is to look locally.
What excellent parents you guys are. You are amongst a growing number of parents who realise that Sydney is unaffordable for most and the opportunity to invest in propery elsewhere is more commercially attractive.
I have a lot of clients purchasing based on either rental yield (mortgage payment minus rent) or the harder one to pick - capital growth.
The first metric is pretty easy to measure as you KNOW the numbers the second comes down to your research of the material available that supports growth to support your rational.
The budget you have is huge in reality as I have seen properties in QLD (house and land) for 460-550 generating a yield of 5%. And properties around the central coast of Sydney for 500-550k
Of course Melbourne has a huge amount of units and town houses available (new) from $400k to $800k
So there really are a number of options available for you.
If I can leave you with one final thought, you should only do something once you have enough information to make an informed decision about the best way to proceed.
Happy to provide you the details of the builders of these properties in each area so you start forming a view of what works for you.
Of course - there is the financing side of things that should be considered in the equation & would love to help you run those numbers.
All the best
Craig