Slow progress with the 'Lake house' renovations and extension

The prefab house on the 25-acre hobby farm at Lake Wallis my parents transferred to me early last year had become very run-down during the ten years one of my sisters was living there (rent free) and supposedly looking after my parent's herd of alpacas... in reality she appears to have spent most of her time collecting and hoarding junk, which my parents are now in the process of slowly clearing out and either taking to the local tip (at a cost of about $85 per trailer load) or packing up to transport to their larger farm at Inverell (where my sister and the alpacas herd had moved to at the start of last year). Once all the junk has finally been cleared out the old carpet will be removed and the house fumigated before being renovated (new lino floors and patched and repainted walls). My plan is to then submit a DA (development application) to the local council to have a two-storey extension added to the rear of the existing house, so that there will be enough room for us to stay at the farm with my parents during school holidays.

My parents plan on eventually buying my sister a small farm for he to live on, using some of the proceeds from selling off their Inverell farm, and to down-size by moving back to the Lake Wallis farm to live. The balance of the proceeds of the sale of their Inverell farm should help self-fund their retirement for the next few years (they get a small UK pension due to the years my father was in the RAF before moving to Australia in the early 60s, and recently also a small amount of Australian aged-pension, having now spent most of the superannuation my father received when he retired as an airline pilot in the early 1990s). In another few more years time the value of the Lake Wallis farm they gifted to me will no longer be counted in the pension 'assets test', so my parents should then be eligible for a slightly larger Australia pension income to live off. As I am now paying the rates, insurance and maintenance costs for the Lake Wallis house their living costs should be fairly modest by then (provided they are no longer paying for any of my sister's living expenses!). I also plan on moving to Lake Wallis myself when I retire in ten or fifteen years time (unless I get retrenched beforehand), but I doubt my parents will still be living there as my father would be pushing 100 by then (although it is possible, as his Aunt will be celebrating her 100th birthday in a few months' time).

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Net Worth: April 2015

Continued weakness in the Australian stock market saw my geared stock portfolio decline in value, and also resulted in the value of my retirement account (SMSF) decreasing despite two months of employer contributions (SGL and salary sacrifice) being deposited into our SMSF bank account during April. On the other hand the continued boom in Sydney real estate pushed up the estimated valuation for our home (which may be overly conservative due to reasons mentioned last month). I also adjusted the valuation for 'other real estate' (the hobby farm at Lake Wallis) upwards by $11,000 to incorporate the cost of having the pastures 'mulched' and trees within 10m of the farmhouse removed to reduce the bushfire hazard (allowed under the current "10/50" state legislation).

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Net Worth: March 2015

Not much change overall, with gains in my retirement account and home valuation mostly offsetting weakness in my stock portfolio during March. The home valuation is more approximate than usual this month as I missed getting some of the online median sales price data. In any case the home valuation may turn out to be highly conservative, as it is based on median sales data for the entire suburb/postcode area, whereas the value of our house may be boosted if there is rezoning (for medium or high density housing) in the near future due to the construction of a new regional hospital in the vicinity.

Some neighbours on the adjacent main road (opposite the hospital construction site) have already been offered an 'option' to sell their property to a developer for around $2.5 million in two years time (they only get a 1% payment up front). While not everyone has accepted the offer (some are holding out for a higher price, while others don't wish to sell their home at all, or wish to sell and move out immediately rather than having to wait for two years before selling their house), construction of the hospital is already underway and redevelopment on the surrounding area will soon follow. While our house is a bit further away from the hospital site, it is still within the surrounding 'zone' earmarked for strategic redevelopment, and a council decision on rezoning is due very soon. It is quite likely that our house with get rezoned from current standard residential (single dwelling, maximum 8m/2 storey) to medium density (eg. townhouses/villas or blocks of 3-storey flats). DW fondly imagines we will eventually be able to sell in a couple of years for $2.5m or more (compared to the current valuation of around $1.15m), but I will wait and see how the zoning goes and what offers from developers actually eventuate. As the 'family home' isn't subject to capital gains tax in Australia, any windfall profit would be tax-free, allowing to replace our house and still have money left over to invest or add to our super.

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Iran deal terminally stupid

After years of sanctions that were obviously starting to bite, Iran finally came to the negotiating table -- and got everything they wanted. The 'deal' will lift the sanctions that were impacting Iran's economy (which some western critics had complained simply punished the innocent population of Iran -- but what better way to incite the population to be disaffected with their leadership and encourage change from within?) and in exchange Iran was not 'agreed' to halt research into developing nuclear weapons, but instead has reached an 'understanding' that includes some limits to the use of its nuclear research facilities and the amount of enriched uranium it can stockpile.

What this means in reality is that instead of the 'worst case' scenario of Iran being theoretically (but never realistically) being able to stockpile enough enriched uranium for a single nuclear weapon 'within months' (but not having the ability to actual build a nuclear weapon for many years to come), we now have a situation where they can continue developing the knowledge and technology required to produce a functional and effective nuclear weapon (which was always going to take several more years or research, and time to steal/buy technology from Russia, North Korea, Pakistan etc.) and can still produce enough enriched uranium for a weapon within a year or so of being ready to make use of it...


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