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    May 30, 2007 - 2:35 am

    Hi Devo76,

    I'd be cheesed too !

    Perhaps it was an oversite on behalf of your current PM, or perhaps the alrm bells should be ringing, as Xenia has eluded to above.

    I would very strongly but politely ask the PM what they are going to do about it.  If the property is being "held" for them, why haven't they signed a lease yet ?  When will this tenant sign a lease ?  When will they pay their bond ?  If they want to move in, fine, but they start paying now as you were under the impression was happening.  Please Mr/Mrs PM – put the advertising back in place asap and immediately (at their cost, not yours) until a lease is signed !!!

    It might also be worth reading your contract details with your PM to see what the implications of no longer requiring their services are. 

    Good luck :-)

    Thanks,

    BDM

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    May 30, 2007 - 2:21 am

    Hi Pman,

    Mortgage Insurance usually is triggered by the LVR – loan to value ratio of your borrowings – and usually kicks in at or around the 80% mark, depending on the lender.  Therefore if you keep your total LVR under 80%, then there probably will not be any mortgage insurance.

    How do you keep the LVR under 80% ?  Either borrow less, or save more for a deposit, or wait until your current equity is slightly larger ( which relates back to "borrowing less").

    I hope this helps,

    Thanks,

    BDM

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    May 30, 2007 - 2:15 am

    Hi TK79,

    Maybe it's worth spending an equal amount of time in searching for a sensational Property Manager in your target area (Rockhampton, or where-ever) as well as a the property itself.

    As Newgen has already suggested, a Property Manager is potentially THE key ingredient – especially for non local Landlords such as potentially yourself.

    I'm sure a search on this forum will find answers to the question "anyone know any good Property Managers in Rockhampton ?".

    Thanks,

    BDM

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    May 30, 2007 - 2:03 am

    Hi Devo76,

    I'd probably leave it as it is, but this is my opinion only.  If you set it all up – as you have done – and then get a pay rise, then you effectively get the best of both worlds.

    It kind of comes down to a choice – pay less tax now and thus not get a tax return at the end of the financial year, or pay more tax now and get a tax return cheque at the end of the financial year.

    Now that you've got a payrise – or are about to – you potentially will get both : more cash per week AND a tax refund.

    Thanks,

    BDM

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    March 6, 2006 - 2:50 am

    G’day Reglinda,

    A regular forum contributor – Dazzling – started a most informative discussion on this very issue entitled “Unmotivated Partner” in this very forum.

    This discussion went on for many pages over several months.

    This link should take you to it. Have a read, because in my opinion it was a great discussion.

    https://www.propertyinvesting.com/forum/topic/14918.html

    I hope this helps,

    BDM

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    March 2, 2006 - 12:33 am

    Hi Dr X and Grossrealisation,

    Thanks for your responses and suggestions.

    I am not sure that I understand the full big picture in what you are both suggesting – make sure that agency agreements have lasped, or are cancelled in writing, and that there is no mention of the buyer (ie me) paying any agents commissions in the sales contract.

    Once satisfied that the sales contract has no clause suggesting any payment of commission is the responsibility of the buyer, wouldn’t the idea of commissions, cancelling agreements between vendor and agent, getting it all in writing, etc be the responsibility of the vendor ?

    Other than a mention in the sales contract – which I will make sure is NOT present (great idea …Thanks !!) – I don’t understand how it could potentially be my problem, as you seem to allude it could be….

    Curiously,

    BDM

    P.S. Both the property and I are in Melbourne.

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    March 1, 2006 - 5:11 am

    G’day Padraicc,

    I’m not totally sure, but in short, yes I think it is possible to do what you are suggesting.

    However, if in the future you decide to sell, you will most probably be hit with Capital Gains Tax, due to the fact that the property will be deemed to be an investment, rather than your “home” which is not subject to CGT.

    I am happy to be proven wrong…….

    I would certainly investigate further before making you desicion either way.

    Good luck,

    BDM

    Property + Music : what else is there ?
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    February 28, 2006 - 7:55 am

    G’day,

    Just thought people might like an update :

    I still have not heard from the agent with the grumpy trousers on. And at this point I doubt that I will !! Excellent !

    However, I have spoken to the Vendor – a couple of times – and the long and short of it is we have done a verbal deal together, and contracts should be signed later this week…. :-)

    After a bit of negotiating over the last few days, we finally came to an agreement yesterday. In talking to the vendor I discovered that:

    a. the agent was, in fact, a fool.
    b. the agents boss also was a fool.
    c. the vendor removed his listing from the agency in question, based on my letter to him confirming his suspicions, the day he received it.
    d. the vendor is a builder, whose modus operandi is to buy a block of land, build 4 units on it and sell 3… ie keep one for himself. He has done this 7 times, and has actually sold half of these himself rather than through an agent.
    e. because of d. above, he was in no way a distressed or a motivated seller. Quite the opposite, in fact. As a result, the best I could negotiate was a 4.5% discount, but with terms and a couple of extras suitable to me.

    While I obviously would have liked this property to be cheaper, as I mentioned in my original post, even at full price the deal was ok. So overall I am pleased.

    Also, in talking to the vendor, I discovered that a shopping centre, initially anchored by a Coles supermarket , will be built approx 15 mins walk away in about 18 months time. Also, the more I spoke to him, the more I have realised that he is very knowledgeable about all things IP. He has obviously put a heap of thought into his buildings and plans, which he has modified and improved over the last few years. He runs the body corp, so I will have an excuse to talk to him on a semi regular basis. And on top of that, he is a nice guy who is willing to answer questions asked of him.

    So, while I may not have bought the bargain of the century, I have added to my investment portfolio a property that I am confident will perform well over the long term, and quite possibly I may have found a person who could well be a source of knowledge that I might be able to learn a lot from.

    Thanks heaps for all your responses and suggestions !!!

    BDM

    Property + Music : what else is there ?
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    February 24, 2006 - 12:34 am

    Hi Jindou,

    The good thing about “numbers” is that you can get them to say anything you want them to.

    You could argue that if you are redrawing on available equity in property A to buy property B, then “your” cash on cash return could be zero (because you borrowed the lot and paid in full).

    Or it could be inifinty (because you borrowed the lot and therefore it is not technically yours, so your actual input was nil).

    A suggestion would be use your available equity to pay for 20% of purchase price, plus costs – stamp duty, fees, blah, blah.

    Therefore, with your $300K purchase price example, you could use $60 K (20% of 300 K = 60 ) plus approx 15K costs = $75 K in total, taken from your available equity.

    Then you could go back to your bank, or any other bank, and borrow the remaining $240K (300 – 60 = 240) .

    Therefore, you have only used $75 K of available equity in your “fully paid off house”, and also therefore still presumably have quite a bit left over.

    So – with your new $ 300 K property, in reality you have actually borrowed 100% of purchase price and costs as well. But on paper, your new $300 K property has a loan associated with it of only $240 K – ie 80%.

    I hope this helps,

    BDM

    Property + Music : what else is there ?
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    http://home.iprimus.com.au/mattandrobyn/index.htm

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    February 23, 2006 - 12:50 am

    Hi everyone,

    Thanks for the fantastic replies and suggestions.

    In regards to negotiating price – I am trying to take the “cheeky offer” approach as per Michael Yardneys newsletters, all the while being conscious of the Jan Somers concept of “pay a reasonable market price and you can’t go wrong” as well as the “you make your money when you buy” mantra of Steve McKnight and many others on this forum.

    I do agree that there is a fine line between “cheeky offer” and “low ball offer”. My theory is that at best a cheeky offer may be accepted, and at worst you pay reasonable market price. Either way, longer term, you win.

    Update to my situation – the vendor obviously got my letter, because I got a voice mail message from him yesterday afternoon, and he left his phone number, and better yet he sounded quite pleasant. I tried to call back, but his phone was engaged, then it just rang out.

    In keeping with the suggestions of trying not to seem too enthusiastic I will try phoning him again tonight.

    So far, the angry agent has not contacted me……

    I will update this post when further details come to hand.

    Thanks again for all your suggestions and comments thus far :-)

    BDM

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    February 22, 2006 - 12:40 am

    G’day Going For Broke,

    Another suggestion, if you haven’t done so already, would be to refinance your IPs with a Fixed Rate Interest Only loan, fixed for 3, 4 or 5 or more years. This will make your repayments lower, and also be “locked in” for however many years you wish it to be.

    Also, fix the rate on a portion of your actual home.

    This will at least provide you with some comfort in that you will know what your repayments will be for however many years you decide to lock in.

    Have fun :-)

    BDM

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    January 20, 2006 - 6:36 am

    Hi JG,

    APerry is right – absolute bare minimum deposit a bank would require is 30%, but quite probably more likely to be closer to 40%.

    Body Corporate fees in these Melb CBD apartments are enormous – lifts, pools, garbage collection, gyms, etc. A “cheap” fee ( ie building with just one lift ) would be $200 + per month…yes – per month = $2400 per year.

    Capital Gains – very low to ordinary. This is largely because while in an inner suburb “they” are not making any more land (scarcity value) in the CBD “they” ARE making heaps more apartments.

    If you do have your heart set on a small apartment, a suggestion would be look at somewhere near some form of tertiary educational facility, eg Hawthorn / Glenferrie, or Burwood, or Carlton, or Footscray, or Monash.

    Banks often have a “minimum size” for properties – not just in the CBD. Studio apartments often are under this “size”. In this case, again they will require a big deposit.

    This is purely food for thought, and in no way am I trying to discourage your plans.

    My theory is – go sick. But perhaps go sick carefully.

    Thanks,

    BDM

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    September 28, 2005 - 7:13 am

    Hi krs,

    I, like Shwing, changed careers after a period of time furthering my education in between. I took the “leap of faith” after I did the investigation and found that the long term gain far outweighed the short term loss. And I was right.

    If you and/or your partner have done your homework and research, and it all says to go for it, then go for it !!

    Maybe initially you can hedge your bets a little by stopping paid full time employment in stages. Perhaps plan to do “investing stuff” for two hours every night after you come home from work. Then, if that proves to be successful, go part time at work, and if that turns out ok the final step of “giving up work in order to invest full time” should be easier.

    My other suggestion would be to make sure you have the biggest line of credit possible set up with your bank BEFORE you change your work status. Banks will generally give you more than you need when you don’t want/need it, but the moment you do want/need it they will say no.

    Thanks,

    BDM

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    September 28, 2005 - 6:51 am

    G’day Maruco,

    My personal opinion is to hold for as long as possible, and therefore there is no real “end date”…

    With proper maintenance and regular care, properties can obviously last hundreds of years. Even a hastily built apartment block will probably last longer than you or I.

    Everyone probably would agree with the concept of “If I knew 20 years ago what I know now, then I’d be very well off indeed”. 20 Years ago, compared to today, property was really cheap. It stands to reason that in 20 years time, todays prices will be seen as cheap. Therefore, subject to careful buying criteria, buy now, and if possible keep buying, and hold forever.

    My personal plan is to buy as much as I can over the next 10 years – houses, units, flats and the odd commercial property – hold for 3 or 4 years after that, then sell one or two to reduce any debt I may have. Then I will live off the rental income. This will mean that I will have an ever increasing asset base, as well as an increasing income over time.

    As such, there is no “end date” other than going to see the ultimate big real estate agent in the sky….

    Thanks,

    BDM

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    September 20, 2005 - 7:19 am

    Hi Leoau,

    4 weeks and the rest, probably. I live in Monash councils zone, and they want all you have mention, and more, even if you are just thinking about planting a rose bush in the backyard.

    And this is why, if you caqn deal with the grief, your property will most likely go up in value. If it’s hard, most people won’t do it. If you actually do do it with all the official approval and grief and time that goes with it, then you will be in the wealthier minority in the long run.
    :-)

    BDM

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    September 20, 2005 - 2:15 am

    G’day,

    Friends of mine live in Sydney, and they rented their house out for two weeks to a family from Finland during the Sydney 2000 Olympics for an absolute fortune. They suggested that we do the same during the Melb Games coming soon.
    My initial research suggests that my family home in Mt Waverley would rent for $2000 plus (and possibly even $3 grand ) for the 10 days of the games !! My wife and I are seriously considering it….

    Thanks,

    BDM

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    August 26, 2005 - 3:09 am

    In response to Dazzlings comments – I don’t think it is necessarily a case of “dropping everything and giving the tennant what they want”. It is more of a people management, priority and decision making process. Some things on the tennants over the top wish list are exactly that – over the top. However, some other items may be legitimate things that do need attention… “a stitch in time save grief later on”, if you will. By agreeing to some items on “the list” and disagreeing to others, then the balance of power is still in the owners favour. And if the tennant doesn’t like it, then yes they have the option of taking it or leaving it.

    BDM

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    March 25, 2004 - 7:56 am

    G’day imooney,

    There lies one of the many million dollar questions that can really only be answered by you…

    Option 1 – Keep re-negotiating a new interest only loan when the old one expires.
    Pros : interest only is cheaper repayments, and you can budget for an exact amount each month.
    Cons : You never pay it back ( but in 20 years time the amount you owe will seem like peanuts compared to the actual value of the property ).

    Option 2 – P & I loan.
    Pros : pay off P and I equals more equity sooner, which can be used for more property deposits, or beer, or whatever. You eventually own it outright.
    Cons : More expensive per month. Variable interest rates change. Not exactly sure what monthly repayment will be.

    Suggestion : Some kind of Line Of Credit loan.

    This way you can almost have the best of both worlds. You can choose how much ( or how little ) you repay per month. Be aware that Line of Credit loans require financial discipline, but can work in your favour.

    Have a good one,

    BDM

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    March 17, 2004 - 1:49 am

    G’day Shushar,

    Yes, I agree that if an individual actually does want to buy property in a particular area, then a letter drop to the residents in that area is a great way to go. I have actually done it myself on one particular house that I wanted to buy – the owner actually got back to me and said “thanks, but no thanks.” Fair enough.

    It was the fact that an agent, pretending to be a buyer, simply to get listings by deception I felt was most unethical.

    Have a good one,

    BDM

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    March 15, 2004 - 3:11 am

    I agree Aussierogue !

    The other day in my letter box, I pulled out a typed letter from “Anna and Paul”, addressed to The HomeOwner c/o my address. It said “sorry to contact you like this, but we are looking to buy a house in your area, and if you are interested in selling, then please contact this particular agent at this particular agency and here are all the agents contact details, because we only want to buy from this agent….” !!

    I was actually amazed that an agent would even try this, given the new laws about full disclosure, accurate quoting, dummy bids, etc. I have no problem with “official” glossy junk mail from an agency offering a “free market appraisal” and a ‘fridge magnet or whatever, but this obvious attempt at bulls**ting “The Home Owner” I felt was actually an insult to my intelligence.

    For anyone interested, the agency was Cooper Newman in Burwood ( Melbourne ) who supposedly subscribe very heavily to the Jenman concept judging from the content on their web site, and the agents name was Carol.

    I am actually going to respond to this agency and tell them what I think…

    BDM

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