Hi San,

If you are investing and looking for a house as IP, where would you buy now?

Much more important than where would I buy, is the question “What are your goals?” It is also important to know where you are in terms of your investing ability – financial situation, skillset, risk appetite, age, job security, knowledge, etc, etc.

Give some thought to HOW you see yourself investing. If you want Capital Growth, will you manufacture that, or depend on generic growth? What is your financial limit? Maybe you can’t invest in Sydney, but could invest in Adelaide? Or maybe you CAN invest in Sydney.

In case it helps you to get your thoughts around the possibilities, do have a read of the very first post in this thread below, and then another one dated around Apr 4 of 2014 in that same thread.
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/
These are the stories from two investors, the first with many years experience (who talks of her path from beginner to fulltime investor) and the second (Darryl Weston – or Westnblue) who started just a few years ago and quickly grew because of the path he chose.

Now, could either of these paths appeal to you? Do you have the skillsets to do what Darryl did? Or could you BUY that skill and still make money? Would you WANT to buy what Darryl bought? Or are you looking for a more “set and forget” investment?

Just have a good think around these two and see where your thoughts take you.

Benny

Hi Ethan,

I wonder if Jerry picked it? Related parties or similar.

Funny thing is that it shouldn’t matter that much even if you DID accept the tenants as they stand. One has no lease, so they could be out in 30 days or so – the other, well, how long is on their lease before renewal – and, at renewal time, the vendor is out of the picture, and you are the landlord.

So, depending on how good the property is, maybe a small adjustment to your offer price to compensate for extra rent foregone, and accept his terms. Why not?

(Takes off devil’s advocate hat again)
Benny

Hi Kbrodee,

Can anyone shed some light on how the median price on realestate.com.au is calculated??

Yes, I can – I went to the source, pulled up that same property, then, where it shows Median Price, clicked on it. It opens up to show you the numbers, then has a comment like “How was this calculated?” Click on THAT, and all is revealed…..

Median Price: The price of a property that falls in the middle of the total number of houses sold over a period of time, based on 137 house sales from 1 Aug 2015 – 29 Aug 2016.

So suddenly, things make sense – and the Median value in this instance is about as useful as an ashtray on a motorbike !! :p

In a fast-moving market, the gap between last year’s prices and this year’s have obviously been substantial. More detailed info is needed, but one can GUESS that the lift in values has been quite recent, otherwise the Median would be reflecting a higher value already. Like, if prices started climbing in Sept 2015, then the median by now should be showing near $360k+

But given that Sales of 137 houses are considered, and the MIDDLE one is showing $317k, I can only conclude that the changes in value have been occurring for way LESS than 6 months. The “middle” value is perhaps from 6 months ago while prices were still depressed.

Anyway, now we know, kind of. In a few more months, I would expect that Median to race upward, based on your comments and the passing of time.

Edited later – 18 Jan 17 – Median now showing as $340k (middle price calculated from 110 sales between 1Jan16 to 17Jan17). Still “behind the times”, showing that its growth is not slowing. Also shows that perhaps growth was “under way” by Jun16 (then $340k instead of $317k around March). A further check in Mar17 should see a value near $360k reflecting Sep16 values…. My guesses are that the mid-point of the value should be evident around the mid-point of the timeframe. That is NOT accurate, but should give some kind of normalcy to the median values in a fast-growth market. e.g. I called Jun16 as likely value of $340k – but in fact, Mar 16 was only $317k median, Frankston North might have had all of its growth in just 9 months, not 12 – thus, a “middle sale” might have taken place in Aug16 and not Jun 16. There is no way for me to know for sure.

Edited later again – 28 May 17 – Median today for a 3/1 house in Frankston North is $394k (middle price calculated from 165 sales between 1May16 to 24May17) with Rental Yield of 4% ($300/wk). :) And a quick look at properties for sale shows that asking prices are above THIS Median – so, still growing?

Latest Update – 20 Dec 17 – the 3Bdr Median for Frankston North today is now $455k. Once more, this is the “middle” price of 150+ houses sold in the last 12 months. I think KBrodee will be a happy camper today for going ahead and purchasing in Sep16. One interesting point is that the 4Bdr median today is just $485k. In most cases, a 4Bdr often commands way more than a 3Bdr ($50k to $70k more) – is the closeness of both values indicating an approaching “top of the market”? Or is it an aberration? Hmmm…..
Benny

PS I see your point re that “needs renovation” place. I’m wondering if $306k is really pie in the sky, but someone who can spend the time and love can maybe get a place with good bones for a good price somewhere in the 2’s. And is that a granny flat in the back yard? Hmmm !!

• This reply was modified 7 years, 9 months ago by  Benny. Reason: Update medians as of mid January
• This reply was modified 6 years, 10 months ago by  Benny. Reason: Further update - Dec 2017

It seems there is nothing gong for under $350k

Did you see the Median that pops up whenever you click on a property (it takes about 30 secs to show up).

When clicking on that first link, it shows the Median (middle) price is $316k. So if most are selling for $350k, how can that Median be correct? It should indicate that a bunch more 3bedders are selling BELOW $316k.

Now median means middle – so, if 7 houses are sold, they could be $420, $410k, 390k, $316k (middle), $312k, $310k, and $310k. As you can see, the AVERAGE can be way higher than $316k. But median of $316k says there are others selling for that price or less.

Or Realestate.com.au have got it wrong.

By the way, if you click on a 4bdr house, the median “should” be higher – re.com.au seem to differentiate between #of bedrooms. Try it out.

Benny

Hi San,

In case you are having trouble, here’s where you can find Jacqui :-
https://www.propertyinvesting.com/members/jacm/

Benny

Hi Jason, (and San),
You were in the right forum to seek out that data – this one:-
https://www.propertyinvesting.com/forums/heads-up/

The “Heads Up” forum is described as containing “Posts about gurus, organisations, websites, books, courses, print, radio or TV matters of interest.” It also has information re any meetings being arranged.

You will see in there that there are regular meetings in/around SEQ – in Brisbane, Gold coast, and Sunny Coast. Brisbane ones tend to be held monthly, but not so often on the Coasts. Keep on eye on the website, and especially the “Heads Up” forum to see when these are next happening.

Of course, you might want to arrange your own ad hoc meetings – feel free to use the website to gauge interest !!

Benny

Hi Jason,

On a re-read, I picked up on this from you:-

As you may have read in Steve McKnight’s book, From 0 to Financial Freedom, the blueprint for the current market is to use quick-cash strategies to manufacture growth and build a large capital base. Then you can reinvest your equity into debt-free higher yielding assets, like commercial real estate.

Sounds like the MAP program is evolving to suit the times, just as Steve did when his early ways of investing ceased to work as well. I recall his early days in low-cost housing in Ballarat, then he branched into units/motels, then NZ, then the USA, then commercial property. I’m sure there would’ve been more in there too….. my memory is dim….. :p

And to you, the MAP attendees – how has the 2016 course been? Are there stories you can share that show how well things have gone for you? Maybe even some traps that you avoided (or didn’t? eeek!) by having done the MAP program?

What can you share? And thanks in advance…. ;)

Benny

Hi Panina,

I thought if the valuation is correct I have to only come up with 20% deposit and can borrow 80%?

Exactly the reason why I said “Ouch” in my first reply. That deposit sounds “over the top” as Corey has defined. Is there “something else” underlying that would have your lender wanting more security?

e.g. Are your loans xcolled? Even with those other positive geared investments, the banks may “see” them as negative geared (by limiting how much rent they will allow in the calcs, and by including a “Qualifying Rate” for Interest that allows for rate increases, etc). So, even if your bank account sees a positive cashflow, this might not be seen this way when borrowing. Hence the need for a Mortgage Broker who is well versed in all of this?

What does your Broker tell you re that huge deposit? Do they agree that you would need to pay the higher deposit? And if so, WHY?

Benny

PS And yes, as Corey said – watch out for way over-priced apartments on the Gold Coast and surrounds.

Hi Panina,
And a big welcome to you….. You have come to a good place. ;)

My loan has only came out at $260000 so if i want the new apartment ill have to fork out $100000 which is all my savings.

Wow – that is a big OUCH !! Smart move for looking around before putting so much of your own cash into the deal.

May I ask – have you been talking to a Mortgage Broker, or are you dealing direct with a lender? See, as with anything we are “new to”, we often struggle to think of questions to ask. So dealing with someone who has YOUR interests at heart, and the knowledge of a subject you are unfamiliar with, can be a huge win.

To that end, let me suggest you at least have a chat with a Mortgage Broker (maybe one from on here?) just to be sure your lender has given you all of the options you might have available to you. See, lenders are often just “wanting to sign you up, while giving themselves the best security for their money that they can” – enter xcoll loans, huge deposits, restricted allowances for your Income, etc.

Better for you to be more aware of all of the different options available to you – via a Mortgage Broker. The results might point your thinking in a whole new direction !!

Re which is better, old or new, there are several points around that – for some (high wage, passive investor, low Tax deductions) a new property might be beneficial. For a low income investor, buying new may not be such a good idea. But don’t let me put you off – ask the questions, and let’s see what other answers spring up. Look out for a mortgage Broker who might reply to your post. There are several good ones on here….. (check their signature)
Benny