Hi Jerry

Buyers agents all work differently, but yes they charge the buyer for their services in assisting with the purchasing side. Some have a commission fee basis, some a fixed fee basis. Some charge whether you buy or not, others only if successful. You’d be best asking Metropole directly, and yes it’s on top of the commission the other agent selling the property receives.

Hope this helps,
Claire

Welcome to the forums twiggymcg.

That does seem high, and may take up some of your profits. It depends how much, and how willing are you to share that profit for the experience?
I don’t know the company but I’d suggest looking around at other service providers who can also put you in the right direction. If you can find a buyers agent down there with investing experience, they can find you a place that meets your requirements and a good one will know what local developers are paying for them. (Don’t want to sound biased as I’m a buyers agent but there are licencing requirements if you’re buying property for people, so do be aware of that). Their fees may be a lot less than 24k, although many do charge 1-2% of purchase price. On top of buying at the right price they should be able to put you in touch with other experienced professionals (eg surveyor, planner, architect) who have been there, done that, and are happy to help.

The trick with getting a helping hand to start you off, is being clear about who’s getting the best deal. Newcomers can be easy targets for a big margin for businesses. The parties who are doing it for you will certainly have their own network of professionals who they want to work with, but check who they are and if you want to work with them down the track. If you’re planning on repeating the process it’s worth building relationships to help you in future. Are their service fees higher than what you’d pay if you were a regular customer? Sometimes these close relationships have kickbacks all over the place, and you don’t get the best outcome. And is the main provider you’re signed up with happy to have you by their side at every stage, or do they prefer interstate or time-poor investors who are more hands-off?

Speak to council and see if you can sharpen up your numbers, they can give you accurate costs and explain the process. Subdivs are mainly about paper shuffling, up to construction stage anyway if you are doing a build as well, so you’ll be dealing a lot with your surveyor/planner primarily. Council will also be able to give you a hand with the “subdivisability” of a block, free of charge. If you can find out from council which DAs have been for subdivisions, check out who’s drawn up those plans and follow up with the architect for more leads. Sometimes the best way to learn is by getting your hands dirty, rather than having someone hand it to you on a plate. If you’re intending to do more developing, personally I’d lean more in favour of spending time with councils and seeing the portfolios of subdivisions done by experienced surveyors and town planners. It’s not wasted time, it’s building a strong foundation to keep moving forward time and again.

I’d prefer to retain control and deal personally with all the service providers myself. Choose wisely and you’ll find they have enough experience to guide you in the right direction as part of their job description, no extra fee required.

Goro, didn’t mean to cause you offence, just stating that the assumed capital growth in mining towns appeared to be optimistic at best. If your company is not the mining town promoters, then my comments are not relevant to your particular company. House and land packages tend to be sold as a ‘solution’ as opposed to buying land and then building in a growth area, where you do the work and hence receive the profit. Agree that H&L have a ceiling, which is why I would suggest doing the hard yards and reaping that capital gain yourself, with the cashflow as icing on the cake for passive income. There’s a market for everything, not every investor wants to go through the plan and build stage. I’ve found this forum tends to attract the more active investor, hence my comments.

It’s great that you’re thinking about the end game now.
You might also like to find out about testamentary trusts if you’re concerned about estate planning, they activate as part of your will and might you help with passing on assets in the most advantageous way.

It’s not a black/white choice either, you can start off investing in your own name and then for future purchases buy in a structure. The cost of setting one up and keeping it compliant can add up, and you’ll need to consider other impacts such as land tax as already mentioned.

Are you thinking of doing a creative deal, or is this for someone you know?

You can use options to control property, have a chat to your ‘Legal Person’ to find out the fine print and the clauses you’d want to put in there. You’ll need the land owner’s permission to submit the paperwork to plan and build, but yes it can be done as far as I’m aware. The main concern I’d want to address is what the land owner gets out of the deal, and keeping them onside during the process. Do things in writing (especially if they’re a friend or family) and look carefully at addressing the ‘what ifs’ of the deal. Do the hard thinking now and you’ll minimise heartaches and cheque-writing later.

Hi JohnnyP

You have done a great job of getting two properties by the age of 21, and now you have exposure to market growth in that area. I’m guessing since you’ve renovated them and are holding them, you’re looking to keep holding them for the long term? If so, you’ve got many years ahead to see a few cycles of growth in Adelaide that will increase their value. I wouldn’t over-complicate things, decide what your goal is. It may only take three or four properties, when fully paid off, to bring in enough income for you to live off. But if you want 50, who’s to say that’s not a great goal? Just know why you chose that goal, rather than some random number or retirement sum plucked from thin air. If you’d like to buy another property, perhaps consider where you may get some capital growth in the future. Renovating from a distance can be very time and money intensive, a different experience than renovating in the immediate area where you can do much of the labour and monitor the progress daily. If you do decide to look further, make sure you get to know the area well. There’s no rush, take your time and look for characteristics that will drive up future values and consistently get tenants through both good and bad times.

Of course, you could always buy another local reno unit project and keep going with what you’re doing there. Perhaps you might like to sell it after the reno, if the cashflow is tight. You could put the profit against your existing investment loan to make the cashflow more positive. Over time, you’ll pay off those loans and can get the rent coming in each month with no loans to repay, build some passive income for you there. If the cashflow is fine, why not hold the third one too? There’s no rule against only investing in the same area! But do be aware of things like the land tax threshold, check out the SA limit if you’re not sure of it already and see the impact on your wallet if you go over it at the relevant date (30 June from memory).

Being so young, you can afford to take some risks if you want to. Other investors who begin in their 50s or 60s often don’t feel as comfortable with taking a risk as they need a ‘sure thing’ for their retirement. There are so many options to choose with property it can feel a bit overwhelming. You need to feel comfortable with your choices, but if there is something you’d love to try then give it a red hot go. Life is short, time is on your side.

Great question to ask, and I hope you have some fun with the next purchase. Enjoy the journey :)

Best wishes for your future.