Forum Replies Created
Hi Troynbec,
You’ve given a fairly accurate description of what happens. Some agents are after quick turnover=fast commission=more commissions per year =more money for agent per year.
Why drag out the selling process trying to get the best price for the vendor when you can condition the vendor down to accept a price that will be snapped up quickly and then you can move on to the next sale?
Example-Why hang out to get an extra $10K for the vendor and get an extra 5% = $500 when you can move onto the next deal and get 5% of $500,000 = $25000. Think about it !!
Todd Burns
http://www.freepropertyhelp.com.auHi Island Girl,
First add all of these costs to your purchase price (If you aren’t borrowing any money then leave out the mortgage related costs)-
stamp duty on a property purchase
stamp duty on a mortgage
registration fee on a property purchase
registration fee on a mortgage
title search fee
solicitors/conveyancers fee
building/pest inspections & surveys
loan application fee
lenders mortgage insurance (LMI)Then take these ongoing costs into account-
Mortgage repayments (if applicable)
Maintenance costs
Land Rates
Water rates
Building insurance
Landlords Insurance
Management fee (unless you are going to self manage)Crunch the numbers carefully and take into account all costs because the cheaper properties can be on the border line as to whether they make you any money or not.
500 population is VERY small. Most lenders will baulk at lending in these low population areas (unless there is a larger centre nearby).
If you have a spare 50K saved up, consider that @ 6% interest rate would return 3K per annum (compounding). If you went for a fixed term interest rate you could get around 10% or 5K per annum (compounding).
Todd Burns
http://www.freepropertyhelp.com.auKeep looking at the events page of my website for property related courses. The guys who helped me get kicked off with investing were ‘Richmastery’ based in NZ and I know they conduct a very comprehensive property academy every year.
Another Seminar to check out would be with Rachel Barnes. I met Rachel and her partner at a conference and I was surprised to find out they owned 70+ properties. How much must they know about property? The cost of the seminar is very reasonable and the details can be accessed from my events page as well.
Todd Burns
http://www.freepropertyhelp.com.auHello again FF,
Property booms are mainly driven by economic factors and supply and demand issues. Interstate migration and foreign country immigration also has effects.
Australia has an overall cycle but each state/city town and even suburb will have it’s own subcycle. Look at what’s happening in WA (boom) heavily influenced by the resource sector success and SE QLD market (bottom and rising).
There are general principals that you can use to try and predict booms however there are so many variables involved that you can never be 100% sure. If you go to my reports page and look at the National 2006 Herron Todd White (independant valuers) report, you will be able to see where each major town is in regards to the property cycle.
Hope this makes things a little clearer.
Todd Burns
http://www.freepropertyhelp.com.auTry Nick Moustacas http://www.strategicwealth.com.au -He specialises in property. He is my accountant and I am hoping oneday to get a spotters fee from all the refferals I send him.
Anyway, at the moment I just send you to him because I want you to get a good accountant. He’s in Hurstville but it is worth the drive. I use to drive from Wollongong to Sydney when his office was in the city but this year I have convinced him to move a bit closer to Wollongong[biggrin]
Todd Burns
http://www.freepropertyhelp.com.auHow can they guarantee rents if you have to find the tenants? I have an IP (house) in Cairns and I think I know the development that you are talking about.
Regards
Todd Burns
http://www.freepropertyhelp.com.auThe FHO grant links for each state are on my website if you want to go and check out the details.
BTW I have a property in Kirwan (Townsville) and I have had great captial growth there. More strong growth is predicted for that area. Rates are one of the most expensive in Australia but the Council is cashed up and starting to spend on massive amounts of infrastructure.
I have seen some good deals around the Condon area. You should be able to find some information on Townsville in one of the reports on my website ‘reports’ page..
Regards
Todd Burns
http://www.freepropertyhelp.com.au1. Make very good friends with a property valuer
2. Marry a property valuer.
3. Become a property valuer
4. Do comparisons of similar sales by looking at what properties sold for on Realestate.com (because this is what some property valuers do).
Todd Burns
http://www.freepropertyhelp.com.auCheck with local Council what the regulations are for subdivison on the block and make sure that the existing easements make it suitable to subdivide before you go too much further.
Regards
Todd Burns
http://www.freepropertyhelp.com.auWhat is the age of the property? What items of value has it got inside it? Has it got anything new like carpets, dishwasher, chandelier etc?
Regards
Todd Burns
http://www.freepropertyhelp.com.auHi Christian,
Rules are different for each state- Go and check out the FHO grant links on my website for more information.
Regards
Todd Burns
http://www.freepropertyhelp.com.auHi FF,
The RBA sets the cash interest rate based on many economic factors. One of the key factors is inflation. The RBA tries not to let the inflation rate creep too much over 3%. If this happens they have to put the brakes on spending and the classic way to do that is to raise interest rates.
The most recent figures show that homebuyers and investors are spending more than they did in the boom time of 2003 and the inflation rate is on the way up. If this continues I believe the RBA will be forced to do another rate rise soon
It won’t effect me much at the moment because 75% of my mortgages are fixed for about another 3 years on Interest only. It will be interesting to see what the decision from the RBA is the the 1st of August.
Todd Burns
http://www.freepropertyhelp.com.auIf you want an investment property then my suggestion is find an area that you can afford and has the right rent return or forecast capital growth. Perth generally has very poor rent returns compared to what you pay for the property and it will take a while for rents to catch up now that prices have leapt up so much recently.
I go where the best deals are (in Australia) and I do not restrict myself geographically and this works for me. Why don’t you grab a copy of the Residex report on predicted cashlfow areas or high captial growth to get you started.
Todd Burns
http://www.freepropertyhelp.com.auThe return on investment sounds good. What sort of condition is the property in? Have you had a building and pest inpection done yet? Are the units approved by Council? Do they meet fire regulations? Is the property in a flood prone area? (check with Council). Can you get Landlords insurance for the units? Why is the vendor selling?
That’s just a few things ‘off the top of my head’ to consider. Other forumites might have more suggestions.
I hope it works out for you.
Todd Burns
http://www.freepropertyhelp.com.auCheck what the lease states (assuming the tenant is on a lease).
Todd Burns
http://www.freepropertyhelp.com.auThe first valuation I had done on my owner occupied property was very low. Since that time I have investigated how valuations are done and have found out a lot of interesting information.
The bottom line is that to be assured of a reasonable valuation you must organise to meet with the valuer and have information ready to show them. If you can prove to the valuer that you house is worth ‘X’ amount they will usually give you a valuation that is close to the mark.
If your lender is the one organising the valuation, ask them to get the valuer to contact you or find out who the valuer is and contact them. I would even offer to pay the valuer more if they would personally visit the property and look through it rather than do a drive by or a valuation from the office.
The second time I had a valuation on my Owner Occ property, I was prepared with similar recent sales information, house measurements and a list of features. I gave him a tour of the house and at the end he said, “What do you think it’s worth?” When I gave him my answer he said, “That sounds about right” and I got the valuation that I was hoping for.
Remember that a Valuer is liable for the valuation that they give and they don’t want to get offside with the banks in case the banks ever need to foreclose on you and can’t get the money back out of your house. So they will tend to err on the side of undervaluation. However if you can put a good case forward and make them feel comfortable that there is good supporting evidence for the valuation you want then they will usually give a much higher result.
I have seen a product that guarantees you at least 10K more on a valuation. It’s part of a bonus package for another product and I am not sure if you can buy it separately. I have never used it but I have posted a link to it on my website if you want to read more about it. Click on- “Beat the banks” and scan down the page to bonus 2 ” Equity magic”.- http://www.freepropertyhelp.com.au/homeloans.html
I would be interested to know if anyone has ever used some sort of valuation preparation service or software.
Todd Burns
http://www.freepropertyhelp.com.auRemember that it is the LAND that appreciates in value-Buildings depreciate in value. Depending on the location of your IP, the captial growth from the land content is likely to outstrip any losses you incur through maintenance and repair.
Where are your IPs? Are they in areas that have good projected captial growth?
I would just write the maintenance and repair off as a cost of holding the property for long term capital growth. You should be able to claim M and R deductions on tax to soften the blow as well.
If you don’t want the cost and hassle of maintaining mulitple properties, why don’t you sell up your old IPs and buy one new property in a high capital growth area. You could buy a copy of the Residex report and choose an area that has 15% projected growth.
Anyway, that’s my two bobs worth. I hope I have given you some helpful ideas.
Todd Burns
http://www.freepropertyhelp.com.auHave you heard about Ajay Ahuja? A friend of mine in London told me about him and I have been getting his newsletters. I have been told that he is one of the property gurus in the UK. This is the link to his homepage. I would like to hear whatever you can find out about him from the locals.
http://www.phfinance.co.uk/home.html
Todd Burns
http://www.freepropertyhelp.com.auKeep checking the events page of my website because I will be listing property related courses and events as they come to my notice.
I have benefited from reading Steve McKnights books but I have also learnt a lot from Richmastery (NZ based). Their annual ‘Property Academy’ is very comprehensive and practical.
Jan Somers books are good and Dale Beaumont has just written a property book where he interviews Australias most successful property investors.
I hope this helps to get you started.
Todd Burns
http://www.freepropertyhelp.com.auYou can get positive cashflow in Toowoomba, especially if you are willing to go for student accommodation. Ipswich is more difficult now but there are big improvements planned for the Ipswich area which should mean good capital growth in the future.
Check out the SE QLD plan in the reports section of my website.
Todd Burns
http://www.freepropertyhelp.com.au
