Forum Replies Created
Hi Adam,
In every area there can be some areas to avoid. Flora Hill is considered a good area but like I said there can be some bad areas. I'm sure you can think of some of those in your town. I've recently bought in Bendigo and looking at subdividing a block of just over 600sqm. This will be my 2nd subdivision if I can get it approved. For me your approach makes sense but upon saying that I need to know where the property is. Be aware though any property that is subdivided and is under 300sqm will require a plan of the property to be built put in with the application for approval by council. I'm only to happy to show you around and show you what i'm doing.
Cheers Martin
Hi,
Im from Bendigo lived here for approx. 38 years. I have invested in Bendigo for the past 20 years. Flora Hill is a great area and I wish you all the best. If you have any questions please ask. Which street? Its close to University, pool shopping centre, and good schools.
Cheers MartinHi TonyLyn,
Everyones journey is different, there is no right or wrong answer. We all make mistakes and hopefully learn from same. You have the enthusiasm and the wish to commit change which is a great start. No-one can tell you whats right for you and your circumstance. I know it sounds boring but research is a great start. Reading and posting on forums such as this contributes to your knowledge level and finally once youve made the decision you need to be able to act. I like Toowoomba so you are definately in the right place to start.
Hi Jamie in regards to Landlord Insurance I have never used it. Its a personal choice. I am of the opinion providing that you purchase in a decent area, the property is in good condition, and you have a good property manager you can reduce your risk of requiring landlord insurance. If you vet your tenants well enough you can reduce risk. Tenants nowadays realise there names go on a database and if they stuff up their chances of getting rentals in the future will be affected. I must say however this is a personal choice so do your sum and work out whether it is worthwhile.
Hi Joe,
With regards to your insurance its up to you how much you insure for. You're able to work it out. For example I recently purchased a property for $247000, crazy as it may seem I insured it for $250000. I valued the land at $170,000. I'm with RACV and also and got the multi policy discount approx $400. Yes it would be disappointing if the place burnt down but $250000 will go a long way in building a new house if I have to chip in so be it but I can guarantee you that the property would no longer be worth $247000, it would be worth $360000+ and no reno I could do to it would bring it up to this price.
Good Luck Joe
Hi Crest,
Sent you a PM let me know what you think.
Cheers Martin
Hi Jaffasoft,
The figures look good dont they and in general the houses that you buy over there for $40000 are in not to bad of shape but I would recommend that you visit,view and have a property inspection first.The bad news is that the tenants I have found over there dont care for your property,are very poor payers,your house can be vacant for a period,repairs and maintenance can become expensive and hidden costs are everywhere ie Property management 10%,taxes $700-$1500 per year,water rates ???,lawn mowing $50 per month,snow shovelling $50 per month,Book Keeping $20 per month,phone calls $20 per month.If your house is vacant during winter you will need to have your heating system on to avoid your pipes freezing.So far in the past 3+years I have evictede about10-12 tenants,I have had tenants steal items from the propertie,been arrested in the property for drug dealing,and even one murder.Why dont the the tenants buy the property you ask well why would you shell out money to buy a property when you can move in stop paying rent after a few months and get to live rent free for a few months while you try to kick them out when and they do leave they find another house and repeat leaving a damage bill behind them and court costs.I would discorage anyone to invest in the States.
MartinHi All,
My biggest investment mistake was investing in the U.S. Trying to copy what we had here in Australia is impossible overseas.If I can say one thing to all those budding investors avoid overseas investment at all costs.Hi Longroad,
I live in Bendigo and have 2 investment properties here.I love Bendigo,its not to big or small.We have a population of approx 90000.Rental vacancies are pretty low and I have never had a problem finding tenants.We have our properties with a property manager at Tweeds Sutherland and they have been very good.As for the drought and water restrictions yes we have pretty stringent restrictions but hopefully these may be alleviated a little with the new pipeline we have.Generally speaking you can get a 6% gross return on properties you buy a rent here ie $210000 house will get you close to $240 p.w.Capital appreciation has certainly been flat for the past 18 months we tend to lag behind Melbourne by about that amount of time in regards to capital appreciation.So hopefully there will be an increase in capital growth in the near future.
Regards Martin
Hi Nigel,
Do you still run a realestate company in San Antonio?Hi Linda,
Gee I've almost forgot about this posting,thanks for your comments,please keep the positive attitude in your life.Once again its great to look at this video and put things in perspective.Hope all goes well in your rehab.Must remind myself to have a look at this video once in a while.
Regards MartinHi Col,
I wouldnt say I'm an experienced investor.But after a foray in the US and Queensland I'm looking to buy properties in my home town of Bendigo.
Regards MartinHi Millions,
As far as I know (I've only ever had one depreciation schedule done) you only need to do it once for a property.Growth I believe is very important in wealth creation.Where else by your figures can you invest $4000 per year (ie thats what you have to pay out of your own pocket)to maintain your property to have a capital gain of $11000 in year 1 compounding.All good in theory but in reality and what I have found in my 12-13 years of investing is that capital growth is not stable.When I started the property values in my town had been flat for about 5 years and indeed they were flat for another few years after I had purchased.That was ok my plan was to purchase as many as I could and pay them out as fast as possible,I had never thought of capital growth when purchasing, I just liked the idea of someone else helping me to pay off a house.Then the property boom hit and my properties doubled in value within a couple of years.All I'm saying is to be aware that properties dont just go up steadily.Depending on the area they can fall,rise,or remain steady in value.
Regards MartinHi Marc,
Exactly.There is no way I will ever have a 20% deposit in cash lying around for a say $220000 house,I dont think I would have even a 10% deposit.Thats not counting stamp duty.If I did it would probably be sitting in my PPOR mortgage.Back in the 90's when I was paying $75000 for a property it wasnt to difficult to raise $20000 through saving a borrowing off my parents and in-laws.The same properties are now selling for $200000-$220000 so it makes it a lot harder to get that 20% plus stamp duty.The reason I keep using the 20% deposit is that I hate paying mortgage insurance.
regards MartinHi Linda,
The method I use is this:
Purchase Price $195000
Stamp Duty $5800
Total $201000Loan of $201000 at 7.34%interest only is $288 p.w.
Rent is $245 per week
Deductions:Body Corp $45 p.w
Property Management 8% =$20 per week
Insurance $600 p.a. =$12 per week
Rates $35 per week
Rent per week $133
Therefore a $155 per week shortfall.
Of course I didnt take into account depreciation and tax deductions.On this basis however I wouldnt look into this property any further.Good Luck on what you decide.
Regards MartinHi Todd and all,
I have a 5 properties in Buffalo that are currently managed by DASA.I did have 3 of them managed by another property manager there but that was a nightmare.He was hard to contact,his statements for each month were of a standard that a 10 year old would do.Due to these and other issues we dispensed with him asap.DASA is primarily a property management company that charge 10% per month to manage your property.On top of this they offer a service to pay all your accounts ie taxes,water,garbage etc for a further $20 per property.Within the company they have a maintenance section and some of the repairs to your properties are done by them.The statements they provide you each month are good and easy to track.I would recommend to those using any property management service to have independant repair contractors (ie plumbers,handyman etc)to get second or even 3 quotes.I would limit any repairs without your approval to $100.To successfully invest in Buffalo you definately need good property management and be aware +++++++ that this investment is not a buy and forget as I initially thought it would be.It is quite active and I would say I would be on the phone to the States at least 1-2 week for past 18 months.Only to happy to answer any questions posed out there.
Regards MartinCongratulations Luke all the best for the future for you and your wife.
Martin[biggrin][thumbsupanim]There are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Hi Orica,
I have recently purchased a property in Bendigo (my home town).It was advertised for between $215000-$230000.After visiting the property and numerous others.I decided that the location,condition of the property met my criteria for an investment property.Now it was negotiating time.I’m not sure what its like in Melbourne at the moment but Bendigo seems to be a buyers market.I offered $200000 subject to pest and building inspection,no need for a finance clause as I already had approval with the bank.I informed the agent that it would be a 30 day settlement with a 5% deposit.The agent presented the offer to the owners and they counter offerred $215000.This property had been on the market for over 6 weeks the owners lived in Western Australia and were keen on selling.I spoke with the agent and counter offerred $205000 with the same above conditions.I informed him that I had made an offer on another house and first in will get the sale.I spoke about the yeild from the property (renting for $220 per week) and that for $205000 that is a comparable return to other properties that I had seen.I informed him that the purchase wasnt emotive it was pure yield and condition and location of the property driven.The offer was for 24 hrs it wouldnt be increased so it was no use counter offering I told the agent.Sure enough the agent responded within the hour and the terms were agreed with.
My advice to you Orica is that you are in the driving seat dont let an agent control you.Know the area in which you want to buy in.Know the yeilds for that area.Know what the value of the property is as compared to others.Know the motives of why they are selling the property.Know how long the property has been on the market.Have finance approved so the selllers and the agent know you are serious.Know what terms the sellers want ie 30,60,90 day settlement what deposit they want.Dont be emotive as others have mentioned there will be other deals around the corner,the agent knows this as does the seller.The last thing an agent wants is you to purchase through another agency.I also like to say that I have another property in mind if the conditions and price I have offered isnt accepted,it adds a little incentive to the agent and selller.
Good luck with the property,I hope you get it for what you want and not what the purchaser wants,the agent just wants a sale as $5000 increase is neither here nor there for an agents commission.
Regards Martin[biggrin]There are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Yeah I liked it to Luke,puts my problems into perspective.[biggrin]
There are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Hi All,
Just my 2 cents.I’m currently looking at purchasing back in my own town.It was approximately 12 years ago that I started investing in my home town.The properties I bought were around the $75000-$80000 mark rent was approximately $120p.w. and interest rates were just over 10% therefore gross return on these properties was approx 8 %.Those properties now are valued over the $190000 mark I dont own them now (sure wish I did) they would be returning approx $190 -$200 pw.I’ve been looking around and doing the calculations and it appears that conditions in my town (in regards toross yeild) are slowly resembling that of 12 years ago.Houses selling for $300000 are getting a rental return of $330-$400 p.w. for a gross yeild of 5.7% and current interest rates of 8%.Is the tide turning in my town I dont know but its sure interesting to see similar conditions in regards to gross rental yeild.Are things starting to turn in your town?[biggrin]
Regards MartinThere are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.
