Forum Replies Created
Joshwaly,
That Junee Austion on Friday might be of interest – put on your running shoes, grab your money and go – research/due dilligence first. Great to get a post like xyzzy’s with such info.
Anna
I work part time in R/E, but we sleep comfortably by choosing to pay our agents to manage our properties. We receive four inspections per year as per the lease agreement and can arrange to be present at an inspection if we wish. We receive a copy of the inspection report and can check on anything we feel needs doing. The agent of course would attend to anything urgent as per the agreement during office hours. The tenant has a copy of the lease which has the name and phone number of tradesmen who can be contacted in an emergency out of hours. There are things I would prefer not to do or haven’t got the time, such as collect rents, increase rents, do inspections, contact tradesmen when needed, give notice, etc. Fees are negotiable sometimes, we pay about 7% overall but some in this area charge 10%.
You should be able to pick up a copy of the handy little book The Renting Guide – Your rights and responsibilities as a tenant or landlord – from any R/E agency in NSW as this booklet is given out with new leases. It is put our by The Office of Fair Trading and has good information.
AnnaNM, if you use an equity L/C for your deposit & expenses as opposed to using your cash, you still have a minimum monthly payment on your equity L/C as well which relates to the property. We have bought properties this way too. Depends on the circumstances and your plan.
AnnaMartinW, be encouraged. We bought a real -ve a few years ago as we thought that was the way to go. And that is after buying and selling places over the years but not really being into “investment” as we now know it. Money out of our pocket each week was a burden and that included after putting in the usual tax form as well. Claiming the interest at tax time wasn’t much help either.
In the last couple of years we have bought less expensive properties in our local area and interstate and the +ve cash flow is good. We are also thinking of selling the -ve which has come up to a realistic valuation and would cover expenses.
Beanie’s post is the way we think too – in tough times people still need to rent, but also with -ve geared property we may also be able to afford to drop the rent a few dollars so the properties remain tenanted. Just a thought. We bought units as well as houses, hope to buy a few more and look forward to semi-retirement in a few years.
I smiled at your last sentence – what a club!!!
We all need to help each other through our experiences, good and bad.Anna
Hi Agent007,
We have all our IPs I/O loans because we want more cash flow. Our contract allows us to change to P&I in 5 years andso start paying off the loan if we decide to do that.
We have recently renovated and got new valuations and got a L/C but we always check with our accountant re any tax implications. They are the best to advise on your own situation.
Anna
The location looked great, water on one side, beautiful mountains on the other. I think they did say that the developer has agreed to them staying till after Christmas. Had given them 3 months notice. Anna
Hi Retire2012,
There are still properties in the Newcastle area/surrounds but you need to be really looking and checking with agents. Prices have gone up incredibly even in this year. eg,look at Mayfield where early in the year you could find a house under $200,000, now $50,000 more. We have a few in the Maitland area which has also gone up. Rents are good there. Currently have another settling soon in Newcastle.I agree with Batzz. We look back on properties we have bought and sold over the years and none of about 20 in various areas including Sydney, have gone backwards. You just have to check the net to see what is happening in whatever area you choose – and invest in Australian Property Investor!! I think the “bubble bursting” is media stuff. No doubt prices will level out as a couple of economists said in the last week or so but they also said prices would continue to rise till 2006. And it depends on who is talking. Our daughter bought her 3rd unit in Sydney a few months ago, we did a quick reno which was mainly paint/carpet and it would sell for $40,000 more now.
Everyone has their own strategy, but if you have bought wisely/positively geared, and the interest rates go up, you are ok as your mortgage is still covered. We made an unwise purchase at Uppera Coomera 3 years ago but it has never been untenanted and valuation now is past purchase price. Also on talking to an agent there today, the area is booming – as we knew – with expected population of 50,000 by 2005. Since then though, our properties are cfp – suits us better. Confirmed by Steve’s strategies – I’m off to read the book which has just arrived in the mail – soooo fast – ordered a few days ago. Thanks.
Anna
Steve747,
We have done several renos, but it depends what you want to achieve. Are you going to sell the property or are you going to rent it out? If you’re going to sell it you may want to spend a little extra to gain maximum price. For rental you can still do a great job which will attract a good tenant. The Weekly Trading Post is a good start – look under Building Materials and Kitchens – and you can even fax your kitchen plans and get prices that way, go for seconds in tiles – you can’t tell the difference but get nice modern ones. Go to auctions for your white goods – you save $$$. Buy your paint by the 10ltrs when on sale and if you keep to a basic colour, you can continue it on with your other properties. Buy nice modern light fittings, again at some of the great sales in Sydney. Look around for carpet prices – good savings on hard wearing carpet. For next reno, I just picked up a kitchen sink for $70, 1-1/4 bowl – brand new in packing, at an auction, usually not much under $200. 3 yr old stove as new, solid hot plates, with warranty, from a like new place cost $350.Recently spent $8,000 on a house reno, the value went up $90,000 and the rent went up $40pw. Tenant went in the day after we finished. Do a fair bit ourselves, cleaning, painting, tiling, take out old kitchens and whatever is to be removed, carpets. Our builder son does the hard bits. We have a good property manager both here and for our interstate properties.
We look at a place, visualise what we think it will look like, have a good idea of prices and shop around and work hard!!! It pays off. But these are just our own strategies. Good luck.
Anna
Hi Rally1,
Re the bedsitters. Our daughter has owned one in Sydney for over 5 years, good tenants and never untenanted.
We have a couple of mezzanine units, never untenanted, that is a mezzanine floor upstairs which is the bedroom, including builtins. They are in a large city in Queensland. The sizes are round the 50sm, mezzanine of course, extra. All cfp.
Anna
Allan, my two cents worth.
I haven’t dealth with Cameron Bird but see their marketing in Cairns in the API, new properties, residential houses and units. Depends what you want, what your strategy is and how much you have to spend.Cairns seems to be going well – have properties there.
Redlynch is a nice suburb, popular it seems, 10-15 mins drive out of Cairns. Have friends there who bought a nice house about a year ago, 3BR (not new) for about $165,000. Have been there.
We bought units, including 1 holiday one, none new, very happy with the permanent rentals but would not buy another pooled return unit. Intend to rent it permanently soon.
AnnaHey Golfchamp,
This time last year I set a goal to have 10 IPs by the end of 2003. At that stage we had 2. The 10th is settling in a couple of weeks, all cfp, houses & units. No problem with finance. We both work part time and retirement is a year or so off.
Set a goal, work out your strategies and go for it. Anna
Hi Redlilia,
We have a 3br, 2bathroom townhouse at Coomera, purchased 3 years ago. It has been rented continually for over 3 years by a couple of lots of good tenants, but has only recently reached a decent valuation and going up. One of those!!!! There is a huge amount of development going on – we visited a few months ago and we were pleased that we did not sell the unit. Also a lot of waterfront development, good train service to Brisbane, 20 minutes to Southport/Surfers. I believe another big shopping centre being built nearby, but Coomera does have quite a good centre, schools, etc. Think about what side of the highway – beach or hinterland. Anna
Quasimodo hi, hope Canada is great. When I see your origin,I remember this time 3 years ago we had a month travelling in one of those awsome motor homes from Seattle where our daughter was through Montana and Idaho and right up to Calgary, met our son and did all the Rockies and back through snowfields, Whistler, etc, Vancouver, all weather too. Dreaming of it!!
Back to the subject, mum sold a relocatable home in a village in Yamba a few years back. It was just the house. When you buy them you order the house from plans & inclusions available, usually curtains, carpet, even can pick your own tiles, & they usually come in two pieces and are put together on the site you choose in the village.
You pay usual rental fee, elect, phone, gas. If you want to at some time, it can be moved elsewhere. Price to move it from Yamba to Newcastle then was $20,000 odd.That was new but there are often relocatables for sale in the papers here, Hunter Valley, I have seen them from $15,000 for a 1 bedroom, some in the parks & relocatable home villages, some people want them moved as they have been temporary accommodation on site while building on acreages.They are sometimes for sale in the Trading Post too under Houses or under Building Materials.
We have also looked in detail into moving old federation homes which are to be demolished onto a block of land, doing up and renting out. Most can be moved from the site for $20,000 onto your site. That doesn’t include the stumps, or any other service connections. Some are quite good, one recently was excellent, only needed carpet taken out, floors polished,a ‘new’ secondhand kitchen, bit of paint inside. We weren’t ready just then.
That one on the net looked more like fibro exterior, the genuine relocatables are usually vinyl clad boards and of course the old feds that we are looking at are timber. Depending on their size they are cut into two or three. There are also relocatables for sale in beach caravan parks in this area but they have gone up recently from round the $30,000 to $70,000. Haven’t enquired as to their rent for a few years. There are a fair few relocatable display houses round, different manufacturers. Also call them manufactured homes.
All the best for the coming occasion and your return to Oz. Anna
Gettingthere Hi,
Ok,my reply is looking in hindsight at what we did and I hope it is helpful.Several years ago, we purchased a couple of negatively geared properties and obviously were putting in more than we could afford from our pocket. Listened to the negative gear advocates which is ok if that is your strategy/plan.
We sold one. Even though we had bought and sold for many years mainly through work transfers, we were not into investing as such. We have now really thought about a plan for cash flow so did lots of research into where, how much, and what outcome money-wise. The forum with a wealth of advice and ideas has also been encouraging. So when you ask what would you do, it depends on your plan if you have one, what outcome you want, and also if you want to use the cash you have as deposits on properties that will be positive and stand alone or use equity (tie in with your PPOR) and keep the cash for later. Not all our properties are stand alone and that is fine for us. Some tied in with our home, others we paid the deposit. We also wanted to purchase many quickly.
To answer specifically, “if I knew then what I know now,” I would go for cash flow first with several properties, even though you pay tax on the income, but it’s money coming in each month from the beginning. Also build my portfolio with a mixture of properties as other bargains come along too. The past 6 months has been very successful for us. Good luck. Anna
AD and all, now for our latest. Hope it encourages. Purchased a few properties end of last year, all positive cash flow. I kept in touch with one of the agents, who rang us about 6 weeks ago to say that there was a unit we may be interested in. Price was $60,000 and I thought this was right so agreed. The good part is that it is furnished, quality furniture, and was rented for $135 pw 3 weeks prior to settlement last Monday.
Looked at a couple of houses weeks ago, side by side listed at $120,000 each. Bought the above unit and another as well so didn’t do any more about the houses. I rang the same agent last week about something else and he asked what I would have offered on the other two houses. I said not more than 90,000 each, which was accepted, rental $160pw. There’s nothing in the area under about $140,000 for a 3BR house.
It’s worth always checking the net, papers, checking in with agents, for sale magazines, driving around, etc. Good luck everyone. Anna
Ringo, an addition to my previous. Daughter has a studio in Hornsby, continually rented for the past 6 years at $190pw. I believe there was one in the block recently for $189,000, security block, indoor pool. Hers cost $110,000. Anna
Hi Ringo,
Re the 37sm unit, just for future info, some lenders won’t lend on properties under 50sm. We have found that some will allow inclusion of garage/carport/storage space/balcony as part of the overall sm, others will not. St George are fine with smaller, Westpac would include carspace and balcony, a credit union would not.We have several small units, great renters. Anna
Hi Walkernick,
Congratulations in getting into investing. Our daughter bought her first property at age 20, she was on a low income, so both the loan and property was in her and and her father’s name. She lived in the unit. When a couple of years later she rented it, it was OK accountancy wise, for her to claim all for tax purposes, as she was totally paying the loan, etc. After a refinance, it is now all in her name, loan and property.Last year at 25, she purchased another unit herself, in Sydney where she lives.
Six months ago, we purchased a unit up north in her name and her father’s name again, but the loan is in my name and her fathers name. No problem at all with the lender, a credit union. Maybe, make a few more enquiries. Anna
Steve Hi,
I think it is a great introduction. As most people hear about negative gearing, and that seems to be the idea when you talk to real estate agents and developers, it’s really refreshing to focus on the positive gearing aspect. Our local papers advertise, eg. great investment $220,000, renting for $160 to great tenant who wants to stay. I shudder at that.Obviously your book will challenge the thinking of a lot of people and encourage them to get out of their comfort zone re investing. I guess too that it will talk about buying less expensive properties when possible, and doing one’s own research. I think there is the need for an easy to understand book on the benefits of cash flow properties. Most of our friends can’t understand that we have purchased properties where the mortgage payments are substantially less than what comes in as rent. Great work – I’m looking forward to buying a copy. Anna
Hi Sooshie,
Our broker sent us a cheque for $300 after a Westpac loan settled about 15 months ago. He offered it when he was writing the loan and it was a bonus to actually get it.We have since purchased a few properties through another broker (as the above one couldn’t help through Wpac), no mention of cheque but are looking at two more through the first broker. So will have to remind him!!!
Anna
