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September 23, 2015 - 8:52 am

Hi MattH,

What are your thoughts on Logan? such suburbs as slacks creek, Woodridge, marsden. There seems to be some movement happening recently and still some really good cash flow properties.

As per BuyersAgent’s post above, look for the area that DOESN’T have lots of land nearby that is able to be developed. e.g. North and West of Woodridge have land available, but it also has the train line going right thru that North Western portion, so that is a positive offsetting any negative.
Slacks Creek is somewhat land-locked with just a few small pockets of land still available (e.g. Paradise Road).
Kingston has some land to the East, locked to North and South, and little to the West (but with Industrial operations taking hold further West – so, jobs??). Large lots within “settled” Kingston are being sold off to build units once again (like in the early 1990’s).
Marsden is a worry in that, land that was under water in the 1974 floods remained as large rural lots until about 10 years ago. Suddenly, these lots are being built on – so Marsden has quite a lot of land suddenly “available” for development. Just watch WHERE you buy though, especially in the low-lying 2nd and 3rd Avenue areas.
Crestmead is one that has been heavily developed more recently – and with huge acreage to the SOUTH (Park Ridge), I wouldn’t be expecting much growth in values for some time there.

In all of those cases, it depends WHERE within the suburb that you look/buy – location is still key, and the above generic comments would not apply to all of each suburb mentioned. Certainly, these parts of Logan are more likely to provide +ve cashflow.

Benny

September 21, 2015 - 9:45 pm

Bump !! Please help out newer investors who might have been bitten by the “Just Do It” bug.

Do you have a story to share where you (or someone else you know….) came off second best by being a bit too “Gung ho”? Moving too fast to be able to mitigate risk, confirm finance, or to complete due diligence, etc.

e.g. Did someone you know end up “buying at auction” without having had their finances pre-approved, only to find that they are struggling to complete as their finances were not as robust as they thought?

Thanks,
Benny

September 17, 2015 - 9:24 am

Hi Kev,

So what am i missing here . I am not happy that this bank now has 3 of our proprieties under hold but more so that all the extra collateral is tide up in there .

Any help or suggestions would be good . We are currently asking the bank to revalue correctly but again some stupid policy saying we don’t do within 12 months but we may wave this . We are awaiting a response to this.

Unfortunately, much of what you have written seems to me to be “the way Banks work”. i.e. Banks will RARELY value a property at an amount higher than the contract price, no matter what its true value.

It sounds like you have finalised on what seems to be a really good buy – congratulations.

Re what can you do? I’m sure our resident MB’s will come through with some ideas soon enough…. but in my view, I’d be looking at the option (with a Mortgage Broker’s help) of taking out new loans with ANOTHER Bank. They will be looking to get your business rather than keeping your Equity locked up because of their “rules”.

Of course, there are lots of things to consider in doing that – and that is where the MB will be necessary. Doing that without checking for any consequences would not be a good idea.

Then again, maybe just the THREAT of going to another Bank might have this bank decide to “waive their 12 month rule”….

Well done, and good luck,
Benny

September 11, 2015 - 9:33 am

Good on you !! The first one is always exciting, if a bit knee-trembling too…..

Re vacancy rate, when I have put the question to RE agents, several needed an explanation of what I wanted. In essence, it is a percentage. Suburbs are said to be “in balance” at about 3% Vacancy Rate (3 out of every 100 rental properties are available for rent). So, if an agent has a rent roll of 200 properties, and 6 are available for rent, that is 3%.

If there are only 3 available out of 200, then that is 1.5% vacancy rate, and it indicates an area that renters want and like, and it can follow that rents are higher because of “scarcity”.

But if vacancy rate is (say) 5%, then landlords may even have to DROP rents to get a tenant. Knowing the vacancy rate for Waterford West would perhaps answer one of my earlier questions.

I notice your comment re Buyers Agent – they may have found you a “good little renter” and have already answered many of those questions, so yeah – go have a chat with them.

Good hunting,
Benny

September 11, 2015 - 9:03 am

Hi Liana,

Are there any other things I should be considering?

Hey, it is a good start – the rent return sounds good, but why is it above average? Are the figures “fudged”? What is the vacancy rate for the area (your RE agent should provide that info)? Maybe 4bd 2ba 2g homes are at a premium there (?) and can command a higher than average rent return….

Is the vendor “motivated”? i.e. have they bought elsewhere and MUST now sell this to be able to settle on the new place? Or is there another (hidden?) reason for the lower price. And no, that doesn’t have to be sinister – but it helps to be as sure as you can be. Oce you have bought it, it becomes yours, warts and all – good to find out about any warts right upfront.

e.g. Houses next to a school, or on a busy road (with restricted driveway entry/exit), or with a bus stop right outside, or next to shops, or….. (insert other “Eww” thoughts re houses) can see their prices lower than usual. Maybe nothing wrong with the house itself – just its location? Anyway, answers to those questions help you to KNOW why a price is lower than expected. If any “problems” are no big deal to you, then this might be a good buy.

Due diligence is all about “finding out stuff that may be glossed over, or not mentioned” that could affect your decision to buy if you knew it (e.g. was someone murdered in the house?). Hehe – I sound a bit morbid there, but hey, it happens. Would YOU buy a house that had such a history? It is an open question – no answer required.

I am not trying to put you off this place – it COULD be “a good little renter”. But that has yet to be determined….

Regards,
Benny

September 11, 2015 - 7:18 am

Hi Liana,
Personally I like what can be available in WW. It is an area that has more than its share of quite large blocks, along with good, solid homes at affordable prices. The train line is sort of handy (about 1 Km North for those that use it).

You don’t give away much in your question re the property ;) but my questions back at you would be these :-

1. With the median being around $350k, is the lower price reflective of the condition of the house?
2. What is the house’s “makeup”? Give more description
3. What is the land size? (I am seeing NEW houses for about $330k, but as a “cluster home”, perhaps with 200m2 of land – eerrkk!!)
4. Is the land potentially subdividable at a later date?
5. What is your priority/goal? Income or growth?
6. What appeals to you about this property?

Benny

September 3, 2015 - 7:42 am

Hi Mohib,

Welcome to you and your wife – I hope being a member here, reading and contributing, will ease your path into property investing. Certainly there is a wealth of experience to draw upon, and none better than Steve himself. Are you in a position to take in either of his (very rare) seminars n Sydney and Melbourne this month? If you are, I would highly recommend making the effort. More than most others, I find Steve has a very entertaining yet thorough teaching style (much like his books – no big words, no fluff, just good ol’ commonsense!). He recently did an update where he touched on “which areas he saw will do better than others (at this time)”. I don’t know, but I imagine he will fit in a bit on that somewhere in the two days.

Also, do read this thread – https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/ – and look near the end of the second page for a post re “Is now a good time to buy property?”

I can’t help you with Spring Financial Group, as I don’t know the name.

But, with ANYONE (or any group) “guiding” you toward buying property, use this checklist:-
If they cold-called you, they have checked that you have lots of equity in your own home, are marketing only new property, they have their own band of merry men that they point you towards (solicitors, financiers, valuers, etc) and they offer to fly you somewhere to check out the properties….. RUN A MILE !!

Any group that keeps you from checking values of properties against other sources, push you to “sign up today or your children will never get to college”, and don’t want to let you leave without a signature, BEWARE !!!

Don’t become a victim of any group like that,
Benny

September 1, 2015 - 5:51 pm

Hi Ryno,

Welcome to this great place !! ;) And good for you for having #1 up and flying. It really is a great thing to celebrate.

Re what to expect from property managers? First, I have noted that payments between States seem to be wildly different, so why not share where your IP is, and the amount you ARE paying. That way, others might drop in with a comment based on THEIR property managers. I have had both good and bad.

The good ones just have everything ship-shape. They call you only if they need to – but will have already been in touch with you re “What $$ amount can they spend without having to check in with you?” Most of the time (with the good one) I would receive a 3 monthly “tour” letter – he had arranged an inspection, conducted it, took photos, wrote me a letter, and commented on his findings. The rest of the time, tenants money was in the bank, and the PM paid the Rates on my behalf.

The bad ones seem to be forever calling you, and, when they do, often with “bad” news. Seems they can’t handle anything without input from you. Give me someone who CAN DO property management, even if it costs a percent more.

Benny

September 1, 2015 - 5:14 pm

Hi Harry,

And welcome aboard the good ship PI.com :)

As there really aren’t too many simple answers to your questions, I though I might share a thread that could well hold worthwhile knowledge for you :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/

I think I know what your friend is suggesting, and that is certainly one way that can work – but then, there are MANY ways that work. The MAIN thing is to choose the right one FOR YOU and your situation, and your aspirations. The thread linked to above talks to some of the “risks” that could be an issue, so do read all of the threads linked within that thread – it will provide a good cross-section of subjects that you will need to become aware of.

It always helps too, if you give us a clue about WHERE you might be looking to buy. With friends and family saying “wait a bit longer”, they could be right – but in some suburbs they could be quite wrong. Share it with us, and let’s see what the thoughts are that come from the members,

Benny

September 1, 2015 - 11:36 am

Hi Kev,

orrect me if i am wrong but at this late stage there is not much i can do . Settlement is next Friday . But i will know better after it settles and we look at other options .

Depending on what “next Friday” means to you, you may be able to do some worthwhile things. To me, “next Friday” would be Friday the 11th Sep – if you mean the 4th, then yeah, it will be tight !! So, what can you do?

Hopefully, one of our amazing Mortgage Brokers might come through and say “We may be able to rush something through” or “I might be able to arrange a brdging loan”, or even “My solicitor says you might have recourse at the bank that has brought this on”.

Hey, I don’t know – these are just thoughts. For sure, with the numbers you are quoting, it is very worthwhile throwing the kitchen sink at the problem. Good luck with it, Kev

Benny

September 1, 2015 - 10:48 am

Hi all,

Today I wanted to direct you to a thread that has so many good posts, all to do with HOW to gain finance to allow someone on a modest income to grow a serious portfolio of IP’s.

The thread itself is called “30 properties before 25, finance???” and its link is here:-
https://www.propertyinvesting.com/topic/4404268-30-properties-before-25-finance/

As expected from the title, there are many posts re the financing of such a venture, the pitfalls, the “how-to’s”, etc. Well worth a look to help gain more background knowledge re financing IP’s. Who knows, it could be the catalyst that sets YOU on the road to financial freedom !!

One post in there is from Nathan Birch who has made an art-form of buying properties that need love, doing them up, renting them, then going again – this post is a depiction of how someone can approach the building of a similar portfolio, and the likely outcome(s):-
https://www.propertyinvesting.com/topic/4404268-30-properties-before-25-finance/page/3/#post-4652561

As Nathan so aptly reminded in his opening remarks: This may not work for you – it is simply an example of how it MIGHT work for someone. Everyone’s situation is different.

The basic theory behind his words is worthy of discussion though, hence the reference to it. I hope it holds some benefit for you !!

Benny

September 1, 2015 - 9:19 am

Hi Harry,

This is what I love about this place – we all get to share the “things that happen to us” and have a laugh. I think I have had my share of “Bank people who really don’t know what they are doing”, but I have also come across some really knowledgable bank staff.

What can I say – some are way better than others. In your case, I believe you ran into one of the “not so knowledgable” members of a bank’s staff. It happens. That just sounds so WRONG to me, though I can see how point 3 could have some merit – but 1 and 2? Nope !!

I hope some of the Mortgage Brokers get to share some of the really “interesting, funny, strange” things they encounter from time to time.

Or, I could be TOTALLY wrong, and everyone can have a laugh at me (gasp!! :o )

Benny

September 1, 2015 - 8:56 am

Kev,
Richard just made a VERY important point that those dealing with finance daily (like Richard and several others on here) confront on a regular basis. Read this bit again (many times) as it is THAT important:-

Applying to a number of credit unions willy nilly is likely to FRY YOUR CREDIT FILE and could result in a total decline of any potential loan restructure.

Go talk to someone BEFORE taking action – perhaps PM or phone Richard, or another Mortgage Broker on here, to get some background information before you do something counter-productive that could slow you down for some years !!!

It IS that important, truly.

Benny

September 1, 2015 - 8:43 am

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

August 31, 2015 - 4:40 pm

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,
Benny

August 31, 2015 - 9:33 am

Hi 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

August 29, 2015 - 8:04 pm

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

August 29, 2015 - 10:11 am

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

August 25, 2015 - 9:53 am

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

August 22, 2015 - 10:49 pm

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