[dr_willo]

http://www.heraldsun...2-1226243996889

I, Dr Willo, are very disappointed by the author of this article and have edited this article for accuracy

Rental property glee means investors are pinching themselves

MUM and dad investors are anticipating upward rental increases in 2012, as many of them are investing in rental homes in the west. With strong anticipated capital gains ahead, many smart investors who put their savings into new houses in suburbs including Tarneit, Wyndham Vale and Truganina have their investments sitting empty, so they can be resold in the future as brand new homes.

Almost 1000 new houses are being advertised for rent.

SQM data shows there is a rental vacancy rate of 3.4 per cent across Melbourne.

But, in the city's western suburbs, the vacancy rate of 22 per cent is attributed to investors deliberately leaving properties vacant.

Experts said that for families in Melbourne's tight rental market, they should be looking to buy in these future blue chip properties.

Some investors will draw on their equity sooner than expected to maximise negative gearing benefits.

Roof tiler Ben Brundin decided to invest in a four-bedroom, two-bathroom house at Wyndham Vale.

It is due to be finished next week and he is thinking he is best off not finding a tenant for the property, and leaving it empty.

"A lot of investors, are on their way to becoming rich, have come to the fore. Close to their mortgage limits is the best way to borrow," he said.

When he decided to go ahead with his investment, Mr Brundin was told his house would rent for up to $320 a week.

He is now hoping to find a tenant for $275 to maximise his negative gearing.


Sprint Property director Meral Kantarcioglu said there was a stabilisation happening between supply than demand.

"If people want to buy, they should be heading out this way," she said.

Planinsek Property director Toni Planinsek said the area had appealed to many first-time investors looking to try to build wealth. "Mum and dad investors can actually afford the house and land packages," she said.

"There are still lots of owner-occupiers out there, but I think there is a high proportion of rental properties, as smart investors continue to flock to these suburbs."

Mrs Planinsek said her company was able to find tenants for most houses, but she takes her time to ensure they are good tenants.

"(The owners) were told it may be worth $360 a week, but when you are competing against so many others trying to maximise their negative gearing, they have to drop the rent," she said.

"Our places are still renting, but it's taking longer and there have to be some price adjustments in this stabilisation plateau."

[urchin]

maximise negative gearing! hahaha! wait till they hit negative equity, then it will be neg. gearing to the moon.

[zaph]

nice edit Willo. you've got a bright future in property journalism!!

[Peachy]

The tiler-man really is looking a negative gearing champion. Holding costs of $700 per week against an expected rent of $360 and actual rent of $275, if he's lucky.

When is the next batch of Order of Australia awards being handed out?

[zaph]

Peachy, on 13 January 2012 - 10:31 PM, said:

The tiler-man really is looking a negative gearing champion. Holding costs of $700 per week against an expected rent of $360 and actual rent of $275, if he's lucky.

When is the next batch of Order of Australia awards being handed out?

his expected gross yield was around 3.1% and reality more like 2.7%, in an area with abundant land to develop with little prospect of capital gains, bubble or no bubble.

someone call one of the property investing magazines, this guy deserves a story written about him!

[savagegoose]

yeah would be sweeet for a budget to drop neg gearing str8 up, like they did to roof insulation businesses.
wham no more subsidy buddies, ohh what you relied on it?> diddums. apparently we have to tighten our belt

imagine running a business at a loss on purpose, and the taxpayer NOT footing the bill!
inconceivable

[firehawk]

urchin said:

maximise negative gearing! hahaha! wait till they hit negative equity, then it will be neg. gearing to the moon.

They should maximise negative gearing by renting it out at $1/week.