Hi 5c1,

As one who has never had a tenant doing that, can I ask just what actually happened to the house? Like, do they knock down walls to put pipes in, or flood the place leading to rot in the floor? Without your words today, I wouldn’t even have thought of growing cannabis as being “malicious damage”.

Can you help me understand more by explaining just what damage was done?

And hey, sorry to hear what happened – thanks for the “Heads Up”

Regards,
Benny

To all members:-
A spammer was recently found to be approaching members in PM (Private Messages) and offering finance.

The recent spammer was posting under the name Santana, but is now Blocked. Should there be any repeat, don’t hesitate to advise us using the Report button, or even a PM to Admin if wanting to include more information. Be wary of anyone who appears to have just joined pi.com (they have very few posts) and are offering finance or other “deals”.

As per the rules, members are entitled to advertise their business via their signature – but not as a link within a post, or by using PMs to “cold call”.

Help us to keep this site free from unwanted contributors by informing us of any transgressors. And thank you to those who alerted us to Santana.

Thank you,
Benny

is it worth renovating property’s around 60-70k?

Not enough info to answer it straight up, except to say that others have done it, but surely it would depend on each individual case. As always, don’t over-capitalise – and, in some country towns, that might not be too hard to do.

But yeah – buy the problem, and sell the solution. Darryl seemed to do that pretty well, and you saw his Buy prices, and then his Reno’ed Values afterward !!!

Benny

Hi Mikey,

Welcome aboard – you have come to a good place. I just did a quick check and saw that LMI based on a $400k buy

at 95% is $14k
90% is $7.7k,
88% is $5.0K and
85% is $4.3k

So, you can see how things take a sudden turn Northward once you exceed 88%. I should have done 89% too – but you can do that.

Here’s the calculator for Genworth:-
http://www.genworth.com.au/online-tools-forms-and-reports/lmi-tools/lmi-premium-estimator

Benny

Hi Ben,

What sort of properties are going to be best suited, am I looking for new builds with better depreciation initially?

One of the subjects I am wanting to highlight in my “Big Picture for New Readers” thread is one that discusses this whole subject. Maybe THIS thread could become the one I want?

I do know that some well-regarded people on here have talked to this subject in the past, perhaps as individual replies to other threads. Hopefully they will add links, or reiterate their positions for you in this thread.

As I recall, the concensus tended to be that a second-hand property with large land was mostly better – unless you were actually developing the new property yourself (giving yourself the savings that a developer would usually take as profit).

Of course, this means that the gearing would be less as you have saved so much cost…. but who seriously wants to pay $50,000 more so they can get $20,000 of that extra cost back again as a Tax deduction?

Benny

Hi Tom,

I thought with a positive geared property and my numbers stacking up ok 330 shouldnt have been a problem?

I totally agree !! I think you might be about to find that a Mortgage Broker can come up with a WAY better result for you than most individual banks can. Of course, right now, we are firing blind as there isn’t any info re your income apart from rent. I am guessing that you have a reasonable income to be able to put aside $60k in cash.

Anyway, I have a lot of faith in the abilities of MB’s – so watch out for replies from one of them – there are a host on here, just check the signatures of any others who post a reply to you. They are Masters in choosing just “which bank” is the best to use first for an investor, and also the ones to use last – all because some lenders have differing lending rules than others.

Certainly, from the post you made, I would be very surprised if there wasn’t a positive result possible from somewhere. The Equity is a big plus – let’s see what the MB’s can offer re getting your DSR higher. A tete-a-tete with one of them could prove to be a goldmine for you.

Benny

Hi Rebecca,

I’ve only just been approached to invest into Armstrong creek

Whoa !! Warning – cold calls from businesses wanting to sell you property is one of the louder “alarm bells”.

There are several alarms that give a warning that you might be about to buy something that is less than it is presented to be. Other alarms include them “Wanting to check that you have plenty of Equity in your PPOR” so a cross-coll mortgage will HIDE the fact that the new property is OVER-priced.

Then there is the “Fly you free to the Gold Coast to invest…” but they DON’T allow you to have free time to check out other RE agents’ offerings. THe biggest alarm is if they RUSH you to sign the contract, AND they have a solicitor and finance all lined up for you. Run a mile in those cases.

https://www.propertyinvesting.com/buying-investment-property-off-plan-dumb/

Do take a look at a very good Article by Jason (above link). One of the more important sentences is this one:-

Having worked directly with builders myself, I’d say many were over-valued from the beginning because the sales price included hefty referral fees to pay financial planners or other industry professionals who recommended these properties to their clients.

Watch out that you are not paying over-the-odds for this place – do have a look at other comparables of similar property types in that area. If “yours” are $40k more than most, it begs the question – “Why?”

Do a Search for Reventon – I believe I have seen other posts with that name, but I don’t recall the outcomes – sorry,

Benny

Hi Pat,

I’m not sure what I’m allowed to post on here in regarding my number or website etc but feel free to contact me for any questions. I love talking property!

Like many business people on here, you may include contact details, website, in your signature. Do not promote your business via any link in the post – but if anyone wants to make contact, your sig points the way.

Benny

Hi Sonny,

I have heard of others (experienced investors) who buy land when the prices are good, and more than one at a time. The major question really is “Are these land blocks really good deals?” Much of that answer will depend on who is developing them. Although I’m sure there are a host of good, honest business people doing good deals, the whole H&L scenario can also have its share of sharks.

Is your goal to develop that block as an IP? If yes, then what? Will you hold or sell? Is the plan to provide a chunk of cash at the end of it? Or do you plan to keep it as an Income source while (hopefully) having it grow in value?

Keep in mind that “greenfield estates” can be built in areas where there is heaps of land surrounding, and little to entice people to buy there (e.g. Pimpama or Yarrabilba in SEQ). They can be small blocks and any chance of Capital Growth could be a decade away. But then, if in a tightly-held city area (e.g. a farmer sold their farm in suburbia, this development has nowhere to continue once sold out, is in a major city and infrastructure is already in situ…) then the prospects of Capital Growth COULD be huge.

So much depends on just what and where you are looking, and at what price…. Caution is advised UNLESS you know heaps about the future prospects of this area. The fact that you are building a home there means it has at least some good things going for it. ;)

From the finance side, if values were to drop, you might be struggling to settle on your home (the Bank might require you to provide a larger cash deposit). Perhaps for that reason alone, it may be wise to hold back on the second block…. but let’s see what thoughts come from others in reply….

Benny