Longrun training notes.docx - MODULE – 1 For Property...

MODULE – 1
For Property Updates
Sydneytoday.com (Chinese Website)
PropertyObserver.com (English website)
Auction Clearance Rate – indicates the rate of the sold properties through auction (rated
every week)
Property Value – Factors
o Location
o View/orientation (North – city and sunshine / South)
o Internal Finish
Old vs New Properties?
OLD NEW
o Cheaper
o Can move in straight away
o Can see the property
o Modern finish and appliances
o Facilities to enjoy
o Depreciation for investors
o More choices
o More rent
o Less maintenance/ less strata
o Foreign clients can buy
o More cashflow on rising market
o Sell it before settlement to cash out
Note: the higher the apartment, the more expensive it gets. (Size varies).
Note: Property in Sydney depreciates but the sale price increases.
Depreciation – good for investors to attain tax-deduct
Example – (off the plan investment)
o 2 beds, 2 baths, 2 carparks. Lv 10, North F, Mascot
o $1,000,000 Contract Price
o 2 years prior to completion
o Annual growth 5%
o Interest rate 2% cash deposit
SOL.
o 10% deposit when signing and exchanging the contract (year 0) - $100,000

o Interest of the deposit $100,000 for 2 years = $100,000 x 2 years / 2 = $2,000
(income to the buyer over 2 years = $2,000)
o $1,000,000 x 5% = $50,000 annual growth (annual income to the buyer at year 1 =
$50,000)
o Investment return?
o ($50,000 + $50,000 + $2,000) / $100,000 x 100% = 102% total investment return
o = 51% return per year
MODULE – 2
Old vs New Properties (House and Land package)
OLD NEW
o One-single contract
o Stamp duty on the whole
o Oversea/foreign buyers CANNOT
buy
o 18 months buy the house then live
in it. No need to pay rent buy pay
interest
o Two separate contracts
o Stamp duty on land only
o Foreign buyers can buy
o 10% only before land rego
o 6 months land rego
o 12 months land rego
Oversea stamp duty – 4% (Oversea Charge) + 8% (Local)
New House and Land package
o 10% of land + 10% of house = 10% of total value on land registration,
o pay the full amount of land
o Construction starts
o The buyer pays 4-5 down payment on the construction
5 Stages of Construction
o Laying of concrete slab (base)
o Framing
o Brick-laying
o Internal Finish
o
Stamp duty - tax levied on property purchase

Example – new House and Land package
o Interest rate = 3.5%
o Rent = $650 per week
o LVR = 80%
SOL.
o $350,000 x 80% x 3.5% = $9,800 (Interest to pay on land for 12 months)
o Rent to live in a house for 18 months = $650 x 18 = $50,700
o Stamp duty saving = $350,000 x 4% = $14,000 (Local)
o Total cost = $9,800 + $50,700 + $14,000 = $60,500
Example – Old House
SOL.