Forum Replies Created
Hi Larry,
I wish my own 18 year old would ask these questions.
Will property prices double in value? Yes, eventually. Some will do it in 5 years, others in 15 years and others probably never. Depends on where you buy really.
Historically, according to experts, house prices double every 7 to 10 years. It depends who you believe. But reckon this also depends on when in the economic cycle you buy.
This is the reason research is so important.
Take care.
Angel
Hi cuteyoungchick,
This is why everyone must do their research. These are not recommendations. Not by a mile. I only put them here so newbies can know for themselves that high returns are possible but they must do their own research. No one can do this for them. I'm sure this forum is about education. not spoon-feeding.
Take care.
Angel
Hi RobbieP,
The FHOG is also only available for first time home buyers who will live in the property, not for investment property.
It would be kind of difficult to prove you're living in it if you're working in Sydney and the property is in Timbukto, if you get my drift.
I can certainly relate to your eagerness to get started. Never a dull moment.
Angel.
Hi Larry,
Indeed, Larry, you would be paying interest on the additional loan of $36K. So hopefully, you would be wise and purchase your next property with a minimum 8% net return.
Let's work on the above scenario you supplied: You now have $36K as a deposit for your next house. For the sake of the exercise let's pretend you want to buy 59 Douglas St., Tenterfield, NSW. This is being advertised on realestate.com.au
Here is what the ad says:
Investment Opportunity
Here is a chance to invest in a rental property with potential.
The property comprises 2 x 1 bedroom units and 3 x 2 bedroom units which rent furnished.
Located on a corner allotment within walking distance to all amenities and set in low maintenance grounds, these units have the potential to earn $470 per week
Long term tenants in place.
Vendor keen to move on.
Let's pretend, for the sake of the exercise, you got the seller to accept $260K. You put in $26K (10%) and the rest was for LMI, bit of reno and other costs.
Your total loan for the property is $234,000 and $36,000 = $270K. Pretend you fixed loan for 3 years and it is 7.5%. You decided to pay interest only. The interest payable per month is $1687.00. You rental income is $2,036.66 ($470 x 52 weeks / 12).
Now, you can see that this property number 2 is also self-supporting.
Repeat the process for investment number 3.I hope this helps.
Angel
Hi,
Here's more:
15 White Coonabarabran, NSW. Duplex. Asking: $125K. Gross return 9.77%or $250 pw. Agent Rhonda Wark. 0427422777
87 A and B Baron St., Cooma NSW. Duplex. Asking $225K. Rental $340 pw. Agent Shannon Fergusson 0429 788 143
3 Moore Place, Warrawong NSW. Dual occupancy. Asking $349K. Currently rented for $19,240pa Long term tenants Quite & convienant location. Ocean and lake views 2 x 2 bedroom with LUGs and separate laundries
Berrigan. Address not disclosed. * All units have: 2 bedrooms with BIR's & carpet
* Spacious new kitchens with electric stove & ample storage
* Lounge with polished floor boards surrounding carpet inlay, split system air conditioner
* Bathroom with bath, shower & vanity
* Separate toilet & laundry with linen storage
* Fully fenced private back yard
* Open nice garden front area
* Car port spaceUNITS RENT AT $150.00 PW & HAVE GOOD RECORD OF OCCUPANCY – EASY CARE WITH NOTHING TO SPEND.
PRICED TO SELL AT $250,000. agent Christine Marshall. 0427 211 884153 Deboos St., Temora. Asking $269K. Rental income not disclosed. 3×2 B/R B/V FLATS 1×1 B/R DOUBLE BRICK FLAT
3×1 B/R DOUBLE BRICK FLATS WITH BED SITTERS. Agent Denis Gersbach76-78 Coolah St., Griffith NSW. Asking $212K. Four flats & four returns all on one large 961m2 lot. Showing high rental return with the opportunity of further development to the site, boasting rear access to Willandra Avenue. Within walking distance to the CBD and schools and in friendly part of town. Now is the time to become an investor, at $21,000 per annum you are well on your way. Rates: $2,400.66 P.A Water Access: $40.00 Quarterly, plus consumption Sewerage Access: $892.00 Quarterly Insurance: $545.00 P.A Agent Tony Santolin 0407954865.
These are just a few samples. These not not recommendations as I did not do any due diligence or have any knowledge of the suburbs.
These are just sample of positive geared properties, and low entry costs.
Good luck doing the research.
Angel
Hi Crusty,
You are a genius. You have helped a lot of people with your analysis.
Here's why I won't invest in Mildura. There are tonnes of houses for sale which triggered alarm bells ringing in my head. Why? I asked. When I saw a snap shot of how many houses are for sale in Mildura, I was alarmed. There has to be a reason why people are baling out of the place. I continued to search and found the answer. The flooding in Mildura will get worse before it gets better. Bad. According to farmer groups, it now takes less rainwater to cause flooding in parts of Victoria due to non-maintenance of drainage systems.
Crusty, good work.
Newbies, it doesn't take a lot of work to find all sorts of information. Let your fingers do the walking. Thank God for google.
In property, investing means investigating.I hope this exercise has demonstrated something to you. It's really not just about prices.
Take care.
Angel
Hi Saybalebay,
Here are more suggestions. Please understand these are not recommendations. I just trawled to net to find properties within your $300K budget and has income.
6 Strickland, Wagin WA 6315. Three units (3×1). Asking $310K, income $390pw. Agent Carole Drayton 0427 611 265.
10/102 Pepermint Way, Peaceful Bay, WA. Strata Lot 10 has just been listed FOR SALE, 3 Chalets on the one strata – all for the price of one. Well presented fully furnished – Walk in Walk out. Double brick, 2 x two bedroom units and 1 x one bedroom unit.
Asking $280K. Income not disclosed. Agent Nelia Pumphrey 0418 935 933.Now, please do exercise caution and do your due diligence. Research, research, research.
Angel
Hi Larry,
You pretty much have the right idea. Your equity can equate to being your deposit. However, in the example you gave above
" if i have a house that is worth $400 000 and I have paid off $200 000 of the loan that means I have $200 000 in equity. So then I can borrow this money and add it back to the original loan right? So i would then have a $400 000 loan to repay but i would have $200 000 in cash that I could use to invest. Sort of like liquidating an asset?"
is not quite correct.
You can only borrow 80% of the value of the property. In this case above, if you had an existing loan of $200K on a $400K house, you can – subject to servicing ability – borrow an additional $120,000 to use as deposit for the next house. You see, $320,000 is 80% of $400K.
Of course you can borrow up to 95% in some instances but you will have to pay lender's mortgage insurance which very, very hefty and it would be unwise to be extremely geared anyway. If possible, and I emphasize the word IF, try to stay within 80% of the value in order to give yourself room for manouver in case of price correction.
Increasing your property portfolio is not difficult if you stay on the right side of positive gearing. Which means you make money, not lose it. Simply stated, this means you are receiving $100 a week and only spending $80 on maintenance and interest payments.
If you are Sydney-based, I have time for face to face discussions. Don't worry, I don't sell anything. Not even a broomstick. I'm retired with time on my hand.
Take care.
Angel
Hi Lucigoosey,
I'm bias towards houses. Having had both, I'm partial to houses as the on-goings costs is slightly less. Strata fees and corporate sinking funds can be a deal breaker.
Bless you.
Take care.
Angel
Hi Saybalebay,
I have been trawling the net parts of Saturday and Sunday, yeah, this is what I do to pass the time. I have found some very interesting properties – so just to get you started – here are some of them. NOW, PLEASE KNOW THESE ARE NOT RECOMMENDATIONS. This is just to give you some basis to exercise your ability to analyse deals.
Here we go:
8 Taylor St., Parafield Gardens, SA 5107 – asking price $375,000. Three IPS on one title. Potential return $600 per week.
1-2/ 4 Yeates St., Mount Gambier, SA – asking $250,000. Two x 2 beds. Income not disclosed. Call agent Peter Duffy of Ray White 08 8725 4011
5 English Drive, Millient, SA – asking $239,000. Six flats on two titles, all tenanted. Gross $435 per week. Call Valerie Jones of Millicent Real Estate 0438382506
Dimbulah Duplex, Qld. 2×2. Address not disclosed. Asking $249,000. Gross net $290 pw.
Dalby, QLD. Address not disclosed. House converted into two flats. Asking $250,000. Allegedly solid 7% return.
74 Ann St., Mitchell, Qld. 4 units. (2×2 and 2×1) Asking $165,000. Rent income not disclosed. Agent Elizabeth Crow 0427231400.
39 Olympia St., Mundubbera QLD, 4 units. Asking $200K. Rental $310 per week. Agents Peter Hunsley and David Zipf 07 4165 4804
I found all these on realestate.com.au.
I gave these as examples as you said you have $300,000. Here are properties, mostly under that. It should leave you some money in your pocket and get you started on property ownership.
Before you make any offers, make sure you do your due diligence. Find out about the location as best you can, travel and see it if you have to. Meet the agent and ask to be introduced to the property manager. Inquire about fees and vacancy issues.
Negotiate the price and fees.
Research, research, research. See what developments are happening the place. what's potential capital growth?
Take care.
Angel
Hi Nicole,
Australia needs people like you. Happy homecoming in advance.
Welcome aboard.
Angel
Hi all,
Ryde, Sydney.
Dream suburbs — — — Beecroft or Cheltenham, yes, I live here in my dreams.
Most likely destination for retirement, big acreage with a tiny house in the Blue Mountains.
Angel
Hi RobbieP,
I'm glad in those instances you have determined it is life you're offering. It is important that everyone wins. We all have to earn our good karma. As everything in life, it is always the sleep test. If you go to bed at night knowing in your heart you helped someone out, then you know you have done a good thing.
Carry on, mate.
Angel
Ho NOS1,
It's likely you don't need to know the answer as you may have likely bought already … or not.
In my opinion, it's a good place to invest in, in that it is trending upwards by double digit. I'm sure about rentals as I haven't checked this out.
Angel.
Hi Reere,
It is very noisy but I've been told people get used to it. At some point, they learn to sleep through the aircraft noise. This is the link to the flight path http://maps.google.com.au/maps/ms?msa=0&msid=105686047848531438589.00046881acd1e03708602
Hope this helps.
Angel
Thanks Chris W.,
I'm nearly there. Currently, negotiating to sell one asset in Sydney. Thanks. Will be in touch shortly (I hope).
Angel
Dear Insamesy,
I have a hunch the IP in Cairns is a unit. Am I correct?
It is hard to give any recommendations or advice because we don't know the full picture. However, if I were you, I wouldn't sell the Townsville property as it is now close to being positively geared. Eventually, it will give you something back.
If I were in your place, I will get rid of the non-performing asset which the the IP in Cairns. Explore the possibility of vendor finance, Paul Dobson here is an expert on the subject.
Failing that, advertise it with a screaming headline that says…. VENDORS WANT IMMEDIATE SALE See what happens. You have to cut your loses in order to fight another day.
Sometimes, you have to take one step back to take two forward. Don't be disheartened or discouraged, there are solutions, you just have to MacGyver it.
Take care.
Angelina
0416261931 – if you need someone to talk to. Take careHi larrytheinvestor,
Go with Scott, trawl this forum. mine the golden nuggets of information.
All the questions you've asked, have been answered in the past.
Happy start.
Angel
PS you're parents should be very proud of you. You are a great Australian. Bravo for thinking of serving your country.
Hi RobbieP.
The scenario you presented demonstrates two realities. Offering a significantly reduced price of $200K and advising the seller it will sell faster is legal. It is legal. All information was disclosed. But is it moral?
Personally, I have never offered deliberately offer a low purchase price on account of a seller's hardship. Why? I believe in karma. I would like to think that if I ever find myself in such a bad situation, that someone would come along, fair enough to pay what I deserve.
Taking advantage of someone's dire situation will not increase my wealth significantly, but it could mean life or death for the seller.
I hope I answered your question. This is just me though… I'm not one to impose what i believe in
Angel
Hi,
The previous sale price can also misrepresent the true value of a property because it does not reflect costs of renovations (if the property has been renovated). It also does not show cost of fixing up any building (mis)compliance. It does not reflect changes in zoning, changes in demographics, etc which we all know affects property prices.
I suppose all I'm saying is you don't necessarily need an app that tells you what the previous sale price was, especially if it would cost you money. there are lots of freebies around, which when used in an integrated manner, will give you a far better picture.
At any rate, if it would give you peace of mind, keep looking for it.
This is all for now.
Angel
