Forum Replies Created
Hi bolgs
I dont think that they are neccessarily at their peak, just asking the question to the forum.
Im actually leaning towards fixing my interest rates, as I fear it may go over 10%.
That way I know exactly how much I need to accomodate each month….Are other investors fixing at the moment?
I think the general concensus is:
Get a PM immediately and have them boot this tenant…….
????
Sounds like the Property Manager had their eyes on another finders fee. Ive had PMs who always seem so keen to get me a new tenant (and first weeks rent of course)….
Statistics show that Australian rentals have increased at an average of 4% pa.
Of coarse, you have years where rentals increase and then stabalise.If you are planning over the long term, 4% is a fair estimate to go by.
Wow….!!!
I agree that you need a Property Manager, this sounds like it isnt your game. Property investing is a business, and needs to be treated as such (within reason). That is not to say that you cannot be a great investor, but you definately need someone to deal with the rough side of things.
Property investment should not be a financial or emotional strain.
Warn her that if those trees are touched, there will be legal ramifications and loss of bond (if there is any bond left with this lady). The place has a nice new kitchen, at least you should get a better rental now, so raise it asap….
Raise the rent, GET HER OUT….!!! Dont offer her a renewl.
As said by others – get a property Manager and Landlords Insurance first….I had to leave early to get my kids, but I started to realise in the first 5 minutes that Michael Yardney’s presentation was almost word for word exactly the same as one he gave here 3 months ago.
I guess its worth going for motivation, but you do have to be prepared to be sold to. You certainly wont get any amazing tips that you wouldnt already get from books or sites like this. Im doing his mentorship program, its early days but I havnt been amazed yet…
Tonys word on tax structure were worth listening to. Although there ar many accountants that can offer such services, with much more reasonable fees.
BreakEven[cigar]
Break’n’Even
“I have a BMW. But only because BMW stands for Bob Marley and The Wailers, and not because I need an expensive car.”
BOB MARLEYHi Guys, well here is the update…
Lesson Learnt: DONT rent to friends……………
Ive owned this place for over a month now, and after several requests to delay the occupancy date, he (my friend) is only moving in now. On top of this, he has told me that he will now only be there “2 months max” (but might want to stay on, not sure). [blink]
What a waste of time and money……
He has broken up with his girlfriend who was going to move in, and has told people at work that he “cant afford this place“, but has not informed me.
Ive been getting a constant barrarge of requests for additions to the place and he expects that I will pay for this. I explained that this his responsibility (if I agree to these additions), but he then requests we go halves….. WTF…? [grrr] [By additions, I mean additional power and phone lines, expandable clothes lines etc]
He talks about the place and the area non-stop (usually how good it is), and phones me when hes not at work to ask me for things, to do favors etc. He donst talk about anything else anymore.
I even got a phone call about changing a light bulb. [blink]
He even expected that I would get babysitting for my kids, to help him move house (he lives 2 hours away). I refused because I couldnt do it – simple. He is now preasuring a workmate who he dosnt know very well to take a few days off work to help him move… [angry2]
And thats not even the half of it……………………….
Its probably been a combination of a relationship breakup and a change in our personal dynamics, but his character has changed immensely.
Im lost for words
Ive done everything to accomodate him, yet it seems almost like he expects these things from me. The lines have been crossed.
I have an agent coming over today to give me an appraisal. This guy has 2 months to the day, then Im gonna boot him…..
BreakEven[cigar]
Break’n’Even
“I have a BMW. But only because BMW stands for Bob Marley and The Wailers, and not because I need an expensive car.”
BOB MARLEYJust be careful of who you speak to and always seek independant advice from people who have experience in investment mortgages.
I have had previous advisers actually reconmend that we take out x-collateralised loans on IPs. I have also had bank managers talk it down by saying that all banks will x-collateralise anyway and that it “dosnt really matter”.
Bottom line is dont do it. Im desperately trying to talk my mate out of it, but he thinks its his only option and the bank has made it easy for him to remortgage. He hasnt spoken to an independant advisor yet…. I think this is how most ppl fall into the trap…
BreakEven[cigar]
Break’n’Even
“I have a BMW. But only because BMW stands for Bob Marley and The Wailers, and not because I need an expensive car.”
BOB MARLEYIve always had good experiences with my lawyer in Brisbane.
Ive dealt with him while in Oz and overseas, and what I like about him is that he is always very calm about the whole process – even when it gets tricky or deadlines get tight. Also, he explains things to you in detail – until you understand why he is doing things without making you feel foolish or rushed. I like that….
PM me if you would like his details..
Cheers
BreakEven[cigar]Break’n’Even
“I have a BMW. But only because BMW stands for Bob Marley and The Wailers, and not because I need an expensive car.”
BOB MARLEYThanks for you response Wylie, sorry for my late reply.
Ive been off the forum for a while.It seems that there will be a sale looming. Personally, I would develop the block or do something that generates income from it without selling – but thats just my opinion.
An independant valuation is critical, Im not even sure that they will do this…!
Thanks again….
“I have a BMW. But only because BMW stands for Bob Marley and The Wailers, and not because I need an expensive car.”
BOB MARLEYHi FWC,
You need to do you own researchg about the property, the area, rentability etc. DONT rely on any info an agent gives you.
But, an agent can give you info about the seller, and this is often critical to getting a good deal.
Ask things like:
“What are the vendors reason for selling”
“Are the vendors motivated to sell”
“What price are they hoping for” (not whats asked)
“Is it currently an investment property” if so “how long has it been unoccupied”
“How long has it been on the market”
“where to the vendors live” (out of the area/city)
“what regions does the agent usually operate” (out of area agents often under-quote valuations as they do not know the area)Ask questions to get a picture of who the Vendor is, what their motivation for selling is and what outcome they are lookig for. This will often put you in a firm negotiating position.
Good Luck[wink2]
Yeah, thanks Richard…
I always thought that the tax benefits would be much the same – but hey, Im no accountant.
The thing is that when I went into see they guy, I told him I wanted an offset split mortgage. He questioned me, asking me why I would want an OS, when the tax benefits of a LOC where much greater. I didnt have enough time to stay and get more info, as I was on a lunch break between work appointments.
So, basically – there is no reason why a LOC offers a better tax outcome?
BTW: “as your mortgage manager has pointed out in certain cases there are more fees, charges and the interest rate can often be higher.” – he didnt point this out. He told mne that it all pretty much works out the same……
Break’n’Even
Hi Kearnal,
We were in a very similar position not so long ago, while living in Europe.
We wanted an investment property in Oz, but didnt want to forgo the FHBG. But, we were going to be in the Uk for another year. We bought an appartment and rented it immediately on an 11 month contract. Upon arriving back in Oz the tenants soon moved out, giving me a chance to do some painting and refreshing of the place.
We then applied for the FHBG wich was granted, and have not rented the place for the last 4 months (officially it is our PPoR) while doing some very basic reno work. As soon as we have completed our 6 month stay, as per the FHBG guidelines, we can rent the property again. The rules stipulate that you must occupy the place (PPoR) for at least 6 months within the first 12 of ownership.
Would I do it again this way – probably not.
6 months of rent would almost equalled the $7000 grant. Sure, $7000 came off the loan instantly, but we have had to fork out for this place for the last 6 months, so it has handycaped our cashflow.
If I could do it agian, I would have the property as a IO loan and kept it occupied. I think the grant is good if you want to own your own home, and eat into the principal. But for investment purposes, its a lot of mucking about. Unless you want to do substancial reno work that would take 6 months in your own time.
In terms of strategy, I would prefer to buy/hold and rent IPs. This flat that we bought a year ago has already financed our second (and much nicer) apartment in Brisbane. CF+ properties in Brisbane are like hens teeth…
Every case is different tho, so if 6 months rent is only $4000 – the FHBG may be a better option..
PS: Remember that they have been known to audit FHBG applicants to make sure they are actually living there. While its still unlikely to happen, try to keep it all above board.
Where in Bris are you looking, Im in Brisbane too….
I read that Robert Kiyosaki and his wife were living out of their car for months after loosing it all in a failed business. He certainly came back from this.
Also, a family friend who was raised in an orphanage in sydney, managed to become one of the wealthiest men in Sydney. He lost and regained his wealth numerous times, but always came back stronger, bigger and more extravigantly.
wealth is not the breaks people get, but the mindset…
Hi Guys, just a quick update for those interested.
I organised an independant evaluation of our property. The valuation has come in at $225,000. This is $35,000 more than the banks valuation a few weeks ago of $190,000. What a difference…
We are now in a much better position to refinance our next property. I STRONGLY reconmend an independant valuation.
Also, I found it helpfull to speak to the valuer and get his ideas on adding value to the place. He discouraged me from a few ideas, such as new flooring in favour of new windows and updating the wet areas. The previous bank valuer seemed unapproachable and did not want to speak to me or answer questions…
Interestingly, the independant valuer spent a good 30 minutes measuring out the place and inspecting finer details. The Bank valuer walked in and out in 2 minutes flat, and didnt even look at the grounds and garage/laundry.[eh]
Overall, Im pretty happy and have learnt a valuable lesson.[specool]
I like flats and think they are a good place to start.
Sure, capital gain on houses will be more. But if I have x amount of dollars, I would often prefer a good flat in a boutique building (not a city highrise) that is located close to the city than buying a house in the suburbs at the same price.
Heres why…
I can almost garantee that the right flat in a good near city position will be almost 100% occupied. So there is more margin for error, esp good if you are starting out. Houses in the suburbs may not always be in such rental demand. Generally speaking, single people with good incomes live in appartments near the city, while young and established families live in the suburbs and therefore want to own their own home, not rent.
I will try to buy in high demand areas with proven capital growth, usually there is limited room for further low rise development so demand will only increase. (both rental and buyer)
I can forcast expenses more easily than houses. Sure there is body corp (usually minimal in low rise appartments), but houses tend to throw unforseen upkeep expenses at you.
Slightly tired units are also easy to make improvements to, this increases the rental return. Houses are often more expensive to update or make improvements on.
If you can only afford an appartment, go for it but choose wisely. A year or 2 later, use the equity to move into the housing game if you choose…
Good Luck[thumbsupanim]
Im in this very position right now.
We have made an offer on an apartment. The agent insisted on a 5% deposit – almost $20000. Our mistake was to accept this. [withstupid]
Since then we have realised that it impacts on our available cash flow for other things such as fees etc. Almost immediately after signing the offer, we realised and tried to change it. Too late, all changes now have to go through a solicitor. My solicitor assures me that it can be renegotiated through the vendors solicitors, but its a bunch of hassle and delays that could have been avoided by insisting on $1000 deposit. [weird]
Oh yeah,
Specifically for property investing:
Michael Yardney’s “Grow a Multimillion Dollar Property Portfolio in Your Spare Time” is a great read. Michael is a reknown Australian developer, so all the content is local. Good Stuff….
Rich Dad Poor Dad was the first “investing” type of book I read. The truth is that its not about investing at all, but rather changing your mindset.
This book started it all for me, my wife and some of my friends. I would love to know haw many people are now financially free, years after first picking up this book….
