Forum Replies Created
Hi Pete,
A few things I am reading in there tell me that you may have more options than you think. I’ll mention some that “stuck right out” and see if the facts around them might sway your decision one way or the other. Here are what I read….
1. You had bought it as your PPOR previously, so is it possible that there might be NO CGT to pay? Talk to an adviser re that one (one on here?).
2. Since you appeared to be wanting to purchase several other IPs after gaining deposits, I “assume” your Income is pretty strong to handle multiple loans – thus, it might be strong enough to simply do an Equity loan on the old PPOR rather than sell it. Weighed up against THAT though, is if it can be sold with NO GCT, then this can have a better outcome in some situations.
3. From your comments about this IP, it sounds like one that is worth holding on to, unless (as you say) keeping it is holding you up in some way.
4. “To be able to purchase more property, I need to free up some cash” – or do you simply need to free up Equity without selling?
Let’s see what others have to offer – look out for those with useful “sigs” under their names. These are ones who can really advise you – my offerings are simply thoughts around the situation, not advice.
Benny
Hi Richard,
I noticed you used to have instructions to get the article in your signature, but it is not there today.
The number of requests for it was taking this really good thread way off track, so today I cleaned it up somewhat. But I don’t want anyone to miss out on what I KNOW is a very well-written and worthwhile article (thanks for providing me with it so long ago :) so…..
Please direct others who are reading this toward the BEST way to get a copy of your article via a post in here. Are you happy to continue having people email you for it? If so, please post the email address and any instructions for them here so they may follow up offline. If a PM to you works better, then please mention that.
I just wish to have a really useful thread (this one) revert to being one to discuss how someone can gain “30 properties before 25…” etc. I know you understand…. and thanks,
And to those who have requested and received Richards article, I did you all a favour by taking your email addresses offline ;)
Regards,
BennyHi all,
After a recent poll asking “What condition of property makes a better IP (Investment Property)?”, the results were not unexpected, but the comments were worthy of consideration (especially from those who did NOT vote with the majority !!). By condition, we were considering whether to buy an IP new, renovated, or un-renovated.Here’s the poll:-
https://www.propertyinvesting.com/topic/5012134-poll-what-makes-a-better-property-investment/What would have been your choice initially?
Did the poll and/or its comments change your mind?
Does seeing this poll help to guide your path as you step into the field of Property Investing?If you want to comment, please do so on the Poll thread (not this one – thanks)
Benny
Hi Amie,
I couldn’t help but chime in to tell you one of my favourite recollections. It was about this bloke who was going to Uni to learn to be an Engineer. He also had a passion for Real Estate and was always looking for ways to make a bit of money in Real Estate. Well, it happened that he finally gained his degree, and started looking for jobs in Engineering.
What he found was that the pay that he would get for a year of work was about the same as he had already made for the year doing RE “deals”. He never did take the Engineering job (why would he? He was enjoying his RE jaunts too much, and they paid so well).
The bloke’s name is Dolf De Roos, and he tells that story (I think I have it about right) in the very early pages of his book “Real Estate Riches”. The rest of the book is filled with little ideas that make a lot of sense.
Fill your mind with books like that one, Steve’s ones, and other book recommendations from within the forum. The wealth of knowledge that can be gleaned because of authors like Steve and Dolf is awesome. And yeah, DO go to see Steve at one of those seminars – you won’t regret it.
Benny
Hi Ben,
From a bank valuers perspective do you think there would be any negative impact on not having a bath at all (just a good size shower) as opposed to keeping the shower/bath setup?
I can’t answer from a bank valuer’s perspective, but do consider that if you are renting to young couples and they choose to have a youngster, then not having a bath might have them choose to move out. OK while it is a bub and a baby bath is in use, but after that, having a bath is a common requirement with a young family.
Each change of tenants usually costs at least one week’s rent – try to keep good long-term tenants by providing all they need (and even all they don’t need yet, but will in the future).
It may be less disruptive for you to keep a shower/bath (and of course, I would be interested to hear any opposing views too – particularly from ladies, in case I have it wrong…..) :o
Benny
Though I voted for the “old, tired, rehab property”, I totally understand that different people with different needs, risks, ages, etc will have a different vote. Katarina commented well on that – i.e. “What kind of investment are you after?” etc.
And then TaylorChang made a sage comment with this :- “I often found some people paying too much for the old and tired property in comparison with existing recently renovated property.”
Certainly our emotions can lead us to make choices we wouldn’t have made in a calmer state of mind !!! One to watch? One to consider when a marketer is pushing you sign to buy THEIR OTP property NOW !!
I too am finding the results and the comments interesting !! :)
Benny
Hi Limumeng,
Just be sure to factor in the costs associated with selling. Make sure you are aware of “close to actual numbers” just so you don’t get a nasty surprise.Benny
Hi Aljc,
Hmm, since nobody has “got up to dance”, I thought I would add my views on your question. I’m not a professional, so my words are “just another opinion” to be thought about, taken up, or discarded – whatever suits you.My reaction to your question was to mutter “Seems to me these are Sales Agents alright – and they are doing a big Sell on you”. See, I am of the opinion that, with the tools available today, your property will be jumped all over without the need for a “Whoop-de-do Premiere anything”. The property itself is the Premiere piece, and developers and the like will be sniffing around for just such opportunities (or will have their “hound dogs” doing it for them).
As well as that, most worthwhile RE agents will have a list a kilometre long of “their own buyers” for your property. If they don’t, there will be other Agents beating a path to your door to take the listing OFF them first agent, and sign you up themselves.
So, WHAT are you paying for? Your ad stays at the top of each page? Given that the hounds are already going to be looking for it, they won’t NEED to see it on every page.
A big sign outside the gate – SURE !! Makes sense to me… but why should YOU pay for it? It is THEIR name that will be being advertised, and you WILL be paying their commission (you know, the one that once was “No more than 5% of the first $18k plus 2.5% of the remainder of the purchase price” – which steadily evolved into “No LESS and no more than 5% of the first $18k plus 2.5% of the remainder of the purchase price”. i.e. Not a MAXIMUM any more – just an accepted NORM – just try to offer them less !!
Let them pay for both if they think it will help so much.
What say others? ;)
Benny
Hi Lee,
Seems to me you are starting from a good place!! Having that equity means you ahve the capability of “moving on into property investing”. I would caution against doing too much, too quickly. You may be getting an inkling that “There is a lot more to know” and I would agree. Take some time to learn as much as you can from those who have done what you are thinking of doing.This forum is a good place to start – but add in books, seminars, and meetings with people also doing this. And you also might wish to check out this link :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/As well as that, DO consider just how much knowledge you might glean by attending Steve’s 2-day seminar (just announced – check out the banner on the Home page). For a tiny amount, you will have access to one of Australia’s foremost Property Investors, as he shares his knowledge. Yes, you might get overwhelmed, but you sure will get excited and keep on chasing the knowledge after hearing Steve in action.
I’d say “Plan to take some time (maybe 6 months?) to become schooled on the basics at least, BEFORE getting your feet wet in Property Investing. You have the equity to make it happen, but your knowledge needs to be at a level where you can avoid most early mistakes (at least).
Very soon you will see there are many paths – you need to choose the right one for you and your family.
Welcome aboard – enjoy the journey, ;)
Benny
Hi OBTS,
I always get a bit concerned when I hear “purchased an IP property, under the advice of Financial Planning firm.” There are those firms that do the right thing, and then there are those that don’t !! What have they sold you, where is it, what is expected rent, etc.Please add a bit more detail – see, I can’t work out what you mean when you say “Property has been on the market twice now for tenants.” Does that mean you have had two sets of tenants and neither group has stayed long? Or does it mean something else entirely? Tell us a bit more about the actual problem otherwise we will be struggling to give you any meaningful ideas to turn it around.
Benny
Hi KC,
Do a Search and I am sure you will come across this subject. I know they have been discussed in the past. Here is one thread that mentions one (or all) of those names…..
Just noticed you wanted recent comments – the above thread is 2011 thru 2013 – sorry, this may not be current enough, but try the Search.
Benny-
This reply was modified 9 years, 4 months ago by
Benny. Reason: extra info re age of thread
“Once upon a time, bank interest rates were closely tied to, and tracked the RBA cash rate.”
So true, Jacqui. I watched (in horror) as the gap steadily widened after the GFC hit. What had hitherto been a 1.3% gap quickly became 2%+ Nice work if you can get it – become a Bank.
And, much like RE agent’s fees (where the 2.5% commission was once the MAXIMUM commission that could be sought, but now it is accepted widely as normal to charge the lot) the “new normal” should see Banks continuing with their golden hands more deeply in our pockets for some time. Short of some other “upstart” bank adding some heat by under-cutting the others, I’d think those margins will remain high for quite some time, and especially while the rates remain so low.
Benny
Hi darkness,
I wouldn’t be too stressed, and would just go get a depreciation schedule anyway. As I recall, a QS will cover a lot more ground than a builder will anyway, and usually come up with a far more complete list of depreciable items. e.g. the builder might provide the cost of a stove, but he won’t be including the cost of the electrician to install it, etc. A QS would add in all of these “hidden costs” to the stove’s value.Where a major build or renovation has occurred, I would always look to a QS for a new list (and have them remind me that all old items should be written off). A builder “might” be able to handle a really small job where just one or two items are changed…. but it is not his forte.
BennyHi Vyaw,
Hehe, why would I tell you that you are investing wrong? Your story reminds me of the Mexican fisherman:-http://www.wanttoknow.info/051230whatmattersinlife
Sure, you could try other stuff if you wanted to, but it seems to me you don’t need to, and you could just keep doing what you are good at until you choose not to. Well done.
BennyHi Kristy,
I used to buy API (Australian Property Investor) magazine monthly (about $10). Toward the back of each issue would be a data section – it would variously show Median value increases over 12 months, or rental value increases, etc. for ALL of Australia.Check out your newsagent and the mag to see if they still do that.
Benny
wouldn’t my property value decrease due to age (10%), and the land goes up buy 60%/4. So my value in land still goes up.
True – but what if your land is only 1/20th of the total land size (you are in a block of flats with 20 units). Your land increase in $ terms is miniscule because you only own a tiny portion. Yet your unit drop of 10% is on the whole unit (not 1/20th of it).
Anyway, you get the idea – the land is key.
Benny
Hi VYAW,
A savvy/experienced investor told me i need to buy land (with houses on it) not units.
The reason they would have said that is because land appreciates while buildings devalue. e.g. If a property gains 50% in equity over x years, that likely reflects something like a 10% loss in building value, and a 60% gain in land value.
Hence, without considering everything else (e.g. your risk tolerance, your earning capacity, your available equity, your sleep-at-night factor, etc) it would make sense for you to look for buys that include a good land component. e.g. if buying a flat, look to buying the whole block. Or switch to buying houses with the capacity to develop in time.
Take a look at what one young investor did in a 2 year period – take a look at what and where he bought – it is inspiring :-
https://www.propertyinvesting.com/topic/4410441-thankyou-steve-mcknight/Enjoy !!
Benny
With the Cash Rate currently at 2.0, I don’t see it going much lower – maybe just one more tick….
But then, I’d not want to see it crank up again too quickly. So, down 0.25 then back up a similar amount?
Voting for the status quo over 12 months. What say you?
Benny
Hi Mark,
Good on you – that last comment says it all really !!!it was very difficult to say no but I just thought to myself “you usually take more than a day to buy a car” but sign away the equity in your house in one day I could not do.
Benny
Hi Kristy,
Maybe start by chatting with a Mortgage Broker. See, it is no good considering buying in inner Sydney if your finances don’t allow it. Better to get a good idea of how much you can spend. This will likely provide some limits as to “where to buy” right upfront. As well as that, just by answering questions the Broker asks will help you to “learn what is needed”.Other than that, do a bunch of reading to help get you more comfortable in the “property investing world”. Maybe start with this thread :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/Benny
-
This reply was modified 9 years, 4 months ago by
