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No marketing please …
Hi all, (oh and Martin I’m sorry I didn’t call you when I said I would but I have been away).
I have only been with Dasa for 2 months. I can’t say I am all that fond of them but it’s kind of like the better the devil you know. Changing managing agents seems like a real battle given all the hoops I have gone through so far.
A crappy experience with Dasa is that on one of my properties they included the utilities in the rent due to some metering problems or whatever it was. That’s no problem except they charges me a full month letting fee on the total amount ($650 rather than $450) as well as a full 10% on the rent. I think this is most unfair and that they should only be charging a fee on the actual rent. Unfortunately Dasa have taken an arrogant stance and continue to charge 10% on the utilities portion as well.
A good property manager who was recommended to me by my realtor is Larry. I’m not sure of the company name other than his offsider is called LaVon Collins. Unfortunately, they have closed their books to new investors. I would have loved to have given Larry my business given the praise he received. In fact my realtor often called Larry when we were on the road to ask about individual streets and he seemed to know Buffalo inside out. I guess that they knock back business is testament to their own work ethic – service the ones you have well.
Maybe we should band together and give our business to someone deserving and to someone that wont rip us off on the maintenance?
Anthony Hansen
http://www.f1property.com.auThanks for your comments. Having bills sent to me in Australia is probably worthwhile based on your comments but I usually like to have my property managers pay everything to make record keeping easier. Another point to this is that I am not yet set up for internet banking (need to be a HSBC customer for 6 months), and paying by cheque can be slow.
Since posting my original message, I am pleased to say that I have secured 2 more tenants since calling our property manager (Dasa Properties LLC) and giving them a bit of a hurry on.
Now that 270 East Street is now fully let I can give you some further numbers. The 2/3 bedder is rented for $450pcm and the 1 bedder is rented for $300pcm. That gives me a gross rental return of 36% on the US$25k purchase price.
Indicative number for the other 2 properties remain at 32%. I’ll give you the exact numbers as details come to hand. Both properties have 1 apartment let although we are yet to settle on one of them.
I’ll keep you updated on the financials as they come to hand, especially the outgoings which remain vital in working out positive cash flow. If someone has some net return calculations on a spreadsheet then I would love to hear from you. Likewise I am happy to share what I have.
Anthony Hansen
http://www.f1property.com.auWell I purchased 3 properties in Buffalo this year. I spent 10 days really getting to know the place and I think I bought well. That said, whilst the gross returns are very high (32%), the outgoings are equally very high leaving very little if no monthly cashflow. Don’t invest in Buffalo if you are looking for a cash cow because you are likely to be dissappointed. For me, I just wanted a house or 3 in the US to compliment my portfolio in Australia and the UK. I like the thought of being a “global” player the truth be told. It gives me an excuse to travel the world and write it off to the taxman
Anthony Hansen
http://www.f1property.com.auI have been investing in th UK for around 5 years now and in that time have secured 14 properties, the most recent purchase was in November last year.
When I started it was relatively easy to find properties with yields greater than 15% but this is much harder now. Londoners have been pushing prices up drastically and accept yields at around 6%.
That said, interest rates are lower in the UK and the tenant pays for most outgoings so lower yields are generally still cash positive. Furthermore, you don’t pay stamp duty on properties less than GBP 60K.
If you are interested I know of a small syndicate you can join for around AU $220k with a yield of around 8.5%. The synidcate consists of 6 properties all of which are in good areas and securely tenanted. It would make a solid start and requires no effort. I want to buy it myself but I am maxed out at present.
Incidentally, I had read the above article but had read another that couteracted it. I personally don’t see much of a fall. UK prices were simply too cheap and they have just been catching up in much the same way that we have seen Australian properties boom in recent years.
Hi Gazza,
There is some good advice and sound warnings here. I have met too many people take the recommendations of so-called financial advisors or investment houses only to regret it. Not that you will necessarily lose money but as your confidence and experience grows, you may find that you could have done a lot better.
A few other words of advice. Do not rely on any so-called independent valuations provided for you. Pay for your own sworn valuation from a valuer approved by the bank. You may be surprised at the differing results.
Secondly, when investing for capital growth ensure that the property is in an area which has demonstrated good capital growth over the last 10 or so years. Many of the statistics provided can look very different when averaged out over a longer period of time.
Finally, do not let this delay your desire to invest. Investing in property can not only make you a lot of money, but it is great fun too.
Regards,
AnthonyHi Mark,
If I was you I would put all the money into your own home and then use the equity to purchase an investment property.
How many investment properties you buy will be dependent on your income and comfort level. For example if you purchased an investment property for say $300,000 and you had a taxable salary of around $35,000 then the investment property might only cost you around $65 per week. Should your taxable income be around $65,000 then that same property might only cost you $25 per week.
If living in Perth though, I would probably suggest you invest in either Melbourne or Sydney for consistently better capital growth.
Hope this is of some help.
Anthony
If you are after genuine positive cash flow real estate then you might like to consider investing in the UK.
I have purchased 10 properties with rental yields around 20%. The best part about them is that vacancy is rarely an issue since they are in major cities.
I’m not talking about London here, but deals can be done in the likes of Leeds, Manchester, Sheffield and I think even Edinburgh.
Investing in the UK isn’t much different to investing locally. The only real downside is that you can’t use Australian property as security. If you intend on using property as security you are better off arranging a line of credit and sending the money over that way. The rest can be borrowed from a UK bank.
Incidentally, the properties I purchase in the UK are around AU$65,000.
Anthony
[email protected]Rick
I have some figures in front of me rating the return from 1980 to 2000. It shows the gross return of Melbourne as being 17.1% (9.2% growth and 7.9% yield) compared with the gross return of Brisbane as 15.7%(8.3% growth and 7.4% yield).
Hope this helps although I must confess to being very Melbourne-centric when it comes to investing.
Anthony
Thanks Robin,
I am probably one of those most at risk as I have a fairly large exposure to negatively geared property. I myself accept that interest rates will rise and if BIS Shrapnel say that 2006 is the time then I will monitor their warnings very closely.
Having said that, I predict that by the time rates get to that level I would have enjoyed considerable capital growth and can exit favourable if needed. My assumption being that if the reserve bank is trying hard to slow things down by putting up rates then my portfolio has probably been growing at a rapid rate too.
Finally, I remember reading somewhere that the long term average of interest rates is around 9.6%. Can you or anyone else confirm this figure? In which case is 10.5% going to be all that bad, or will this rate be offset by good capital growth and stronger rental yields.
Anthony
Hi Northy,
Seems like a good idea to me. When it comes to purchasing your next property though you might like to consider channeling the surplus funds into a negatively geared investment property in a high growth area to balance your portfolio. A find a good mixture of cash positive and negatively geared property helps balance my portfolio. My principle investment philosophy is for capital growth, but then cash positive properties (which tend to have low growth) provide much needed income.
Incidentally, I find the best way of paying off a home loan is to focus on investments with high capital growth potential and then selling that property in future and using the equity to pay off the home loan.
Anthony
Hi Leigh,
A couple of years ago I set up a company (albeit in the UK) for the purpose of buying UK property in partnership with others, but more recently I had a solicitor draft up a joint venture agreement (first draft) to do it again locally.
If you like I can fax you copies to see if they are of any use to you on the proviso that you do the same once you have something drafted. No use re-inventing the wheel each time if something I have suits!
Email me at [email protected] to discuss.
Regards,
Anthony Hansen
