Hi Traca,
Before going with this group (they may be OK or they may not be – I don’t know them) do use the checklist in the following link to appraise their operation.

https://www.propertyinvesting.com/topic/5023872-property-investment-firms-advice-needed-please/#post-5023875

The post linked above goes into depth re “How you can tell if the group looking to advise you re property should be believed”. Does this group tick the right boxes in your eyes? If not, run a mile.

Benny

Hi Chamb00,
You said:

Another confusing issue I have is to buy my first home/apartment or an investment property first.

That is a good question. It is not one any of us can answer for you, however we can “point the way” for you to arrive at your own conclusions. Tom already mentioned that answers depend on where you are now, and where you want to end up (your goals). Your answers will vary from other folk, because of differing circumstances and goals. However we CAN point you to some thoughts – here’s one topic re “Which type of property do I buy first”:-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697967

Just looking for some advice to get me started on the right track, I don’t think it is fair to come on here and expect step by step help but more in the direction of what to do and where to start. It can be confusing and scary and many of you would know.

True – any new thing we try can be quite scarey. First you need to learn what might work best for you. As Tom said, you appear to be well situated to start your journey as an investor. Some other thoughts (and subjects) are discussed in that same link – just scroll back to the first post and read through the Index of subjects – I’m sure you will find some of interest.

And then, the Training Centre (see the Home page) has a wealth of subjects written by Steve and others that will add to your knowledge. Meanwhile, Tom has provided you with a really good path to follow for now. Do come back to ask more as you strike problems,

Benny

Hi Sako,
“But what now ? Time to buy or is there something bigger that’s getting cooked in the background which we don’t know about ?”

Sako, the RBA has only the one gun to fire – some actually say it is a “blunt instrument”, so maybe it’s Thor’s hammer, rather than a gun. As was said on the news yesterday – “It is up to a Govt to make other changes that might be needed to stimulate the economy” (read fixing Tax bracket creep – they are voting on this right now).

But let’s look at an overall picture of the recent economy in dot points:-
o Wages growth has been near stagnant for years
o Inflation is through the floor (the RBA tries to keep it in a band between 2% and 3% – we are currently around 1%)
o Power pricing is strangling many – businesses both large and small as well as the “Mums and Dads” in the family homes. So money is tight.
o Thus, employment is less buoyant, so less people with “money to spend”.
o Factions are actively demonstrating against burning coal – which could kill one of Australia’s most important exports (worth around $60b per year?) stone dead.
o Yes, house prices have dropped, but that follows years of gains in Syd and Mel, so they likely would have further to fall than other cities as the economy stumbles along.
o Not too long ago, APRA and Banks were instrumental in tightening lending which forced a drop in house prices (but also further encouraged folks to “keep their hands in their pockets rather than spending”)
o Recent moves from the Govt pushed away overseas investors too, further diminishing the pool of buyers of property.
o A recent election might have led to Capital Gains Tax increases, AND other Tax increases from a Labor Govt (remember franking credits being at risk too?) That certainly had many voters on edge. How UN-stimulating that would have been to the economy had Labor been elected?
o Housing and the associated ancillary trades and retail outlets used to lead Australia out of recessionary times. But if the housing market remains depressed, where does the stimulus come from?

o All of the above promote signs of “wait and see” rather than “spending up large”…. but where are we now since the election? Has it changed that much yet? We are breathing a sigh of relief now, and maybe that has led to a SMALL uplift in auction results. But for mine, we are still walking a tightrope.

Sure, good deals will be out there, especially where some can’t wait for the good times to come and they MUST sell. But then, can YOU get finance? That is the other side of the coin. Maybe check that part out so you may be ready to move. Maybe it is still harder than previous…. but then, that is one for the brokers out there. Check one or two out, Sako, to see what they can do.

In answer to your question about “something bigger”, I guess that remains in the lap of the gods – any major world event will always impact on Aussie. But for me, I think the home situation (above) is far more relevant right now.

Benny

Hi Angalfaria,
OK, I understood enough from that question. You are wanting to know where this company operates. I got the answer from their website.

To find this answer yourself, go there, and click on “FAQ” (this stands for Frequently Asked Questions) and scroll down to where it says:-

>>> Question: WHAT AREAS DO YOU COVER?
>>> Answer: Certainty Property manages property across New South Wales. If you have an investment property in New South Wales, please reach out and a member of our team will be happy to assist.

Benny

Hmm, would I say this?

The most important advantage of real estate investing is LEVERAGE!

To be sure, leverage is a very useful tool – so long as we remember that leverage works in two directions (as well as leveraging our available dollars to purchase a more valuable property, it also magnifies any LOSSES should things turn bad). Leverage is useful, but it can be dangerous too.

To me, the most important advantage is the investor’s education, thus minimising risk while growing their investing options.

Benny

Hi Pradeep,
Did you see the post before your own post above? It sounds like you might have a point that Helen is unaware of – maybe reach out to her directly to see what she thinks.

Benny

Hi PSM,
Welcome aboard !! There are others on here who are able to quote you chapter and verse on all of those things (i.e. accountants) but, in case you are “hanging out” for an answer this weekend, let me share what I “think” is correct (but I am NOT an accountant, so beware…)

As I understand it, all you have said about not being able to claim it as a repair is correct. That leaves “how do you get to claim the cost?” And I think it would go as a Capital Cost (almost like it is part of the Purchase Price – you added value to the property, sort of like “buying it for a few thousand dollars more”). Like you, I don’t think it is any part of that 40 year “Capital Works deduction” either. Instead, it would become part of your Cost Base, so any Capital Gain on sale would be a few thousand $$ less to cover that cost.

Now, as I said, you CANNOT rely on my words there – but hopefully others will swing by to give you the “good oil” later on.

Benny

Hi Angal,

What are the Frankston 2019 house prices? It gradually continues as the previous year.

Surely, that will depend on other factors. Just because a suburb’s values have increased over 2 or 3 years is no guarantee that this will continue for the current year. It could be that the prices have hit a peak, and the values may flatten or drop in 2019, couldn’t it? Careful scrutiny of the market might provide some clues, but certainty of further price rises is far from assured.

I want to say that Frankston works only for Melbourne or any other cities.

Sorry, but I am still unsure what you are saying or asking there. To try to share my confusion, let me say that Frankston is a suburb of Melbourne, so it really can not “work for other cities” in any way. In fact, can it even “work for Melbourne”? What do you mean by “work”in that sentence?

I can only think that your question needs to be asked again but using different words, so I can understand just what it is you wish to know.

Benny

Hi Carr,
Keep in mind that Steve’s book was written many years ago and, even when he was buying up, this was in a “forgotten area” of Ballarat. He bought there because the numbers worked for him there, at that time. Later, when the numbers didn’t work, he moved his focus to NZ, then later to the USA. It was all about tailoring his investing to the areas in which that style would work.

In my welcome PM to you, did you happen upon the example (from a more recent timeframe) where a young bloke was using a similar pattern to build up his portfolio. In case you didn’t, check out his post here:-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697977

Now, that is from 5 years back or so – I suspect his way can still work in some areas today – but then, his way worked by having him doing renos – will THAT way work for you? See, there are many ways property investing can work, but they don’t all suit everybody. You might be better to start with the end in mind and work out what you want to achieve, and by when, then come back to ask how you might make that happen. For some, a slow steady path works – for others, they may be in more of a hurry (which introduces more risk).

I just checked Darryl’s story, and I note the original posted photos don’t display any more. Suffice to say, the numbers were impressive. In most cases, he bought low, renovated the place, then refinanced to get this depsoit back for the next property – and nearly ALL of the properties had a 10% return, so his share after mortgages and all other expenses still left him with a healthy chunk of change. If I recall correctly, his total Income from property was around $200k pa, and his expenses totalled about $140k. In a later post on here, he reported that he’d started working on paying down debt to get his leverage down to 50% to further consolidate his portfolio.

Further down in the linked topic you will see where some of us were able to buy back-issues of the magazine, so you can easily read the whole story. I highly recommend it to you,

Benny