Forum Replies Created
That’s Ok for me, I haven’t got my group certificate yet [biggrin]
Todd Burns
http://www.freepropertyhelp.com.auI even pay IO on my PPOR so that I achieve the best possible cashflow and this increases my servicabilty and ability to invest further. I make money faster with an extra investment property than I could if I put that extra cashflow a P & I loan to pay off the PPOR. I locked in to a fixed rate IO @ 6.29% [biggrin] a couple of years ago.
After just 4 years of property investing I could sell 2x IP’s and pay off my PPOR 25 year loan if I wanted to. But I’m not going to because my whole portfolio has just turned cashflow neutral so it costs me nothing from my own pocket to hold. The capital growth and rent rises just keep cycling. [biggrin]
Todd Burns
http://www.freepropertyhelp.com.auI prefer to use a switched on solicitor that specialises in conveyancing because I get legal advice and conveyancing all in one. If something goes wrong with the deal, I have a very smart lawyer on my side and that has been a huge advantage for me in the past when people have tried to rip me off.
Todd Burns
http://www.freepropertyhelp.com.auI own three IPs that I have never seen with my own eyes. I bought two that I saw on the internet and another one through a buyers agent.
It can be done without having to visit the property yourself and now I actually prefer to do it this way. I use a stack of online resources to research potential properties and I have a good network of professional building and pest inspectors etc that do much of the due diligence work. I just have to read the reports, look at the maps and photos, make a few phonecalls to Council and some RE agents then make a decision on purchase. You will find links to many of the online resources I use on my website.
I wouldn’t recommend doing it this way for your first IP purchase but I have proven 3x times that the ‘research from home’ strategy can work.
The other way to do it is just pay a buyers agent to do the hard yards and find you something suitable.
Todd Burns
http://www.freepropertyhelp.com.auThere really is not enough information here to give any sort of detailed opinion but 9% is a good return for a new property as long as you don’t pay an over the market rate price for it. You need to consider how long you want to hold the property and what sort of market rent return you will get when the builders lease expires. The location and normal rental demand is important as well.
Todd Burns
http://www.freepropertyhelp.com.auI get archicentre to do my building inspections on newly constructed properties and I don’t pay the final installment until all the contractual finishes have been completed to my satisfaction.
This process has been followed by a friend of mine as well and it made sure he got a lot of rough work remedied before he made his final payment. The building inpector will do a thorough report and will be able to pick up issues that you would probably not know about. I suggest getting it sorted out while you still have some financial leverage.
Todd Burns
http://www.freepropertyhelp.com.auI second that. He’s my accountant too. He knows property VERY well.
Todd Burns
http://www.freepropertyhelp.com.auConsider that you may be pushing things too far, too soon. It may be prudent to take time for some more equity to build up in your properties. If your gearing is high then you ARE in fact in a high risk situation and wanting to push the risk even further. Is that really where you want to be?
Todd Burns
http://www.freepropertyhelp.com.auI suggest you consult an accountant specializing property investment because there are so many variables in your situation and to work it out properly would require exposure of all your financial details and I don’t think that’s a smart thing to do over the internet.
Also consider the capital gains issues that will impact you in different ways depending on if you live in it or rent it out.
Remember to consider tax advantages from investment properties and a depreciation schedule if your property is reasonably new.
I have links to the FHO grants for different states on my website if you want to check them out.
Todd Burns
http://www.freepropertyhelp.com.auHi Kayee,
First of all I would like you and Solo to look at this link and see what has happened to the TAS property market. If the rise in prices from 2000 to 2005 is not considered a boom then I don’t know what is-
http://www.independentvaluers.com.au/content.asp?pid=1742I suggest you do some number crunching yourelf or go to an accountant specialising in property investment to work out what to do because 40 mins drive from Hobart is a long way in Tasmanian terms and it may take a long time before properties that far away from Hobart get town services or rise in value.
It would be worth getting on to the local council to find out what they have planned in terms of development, transport links, improvement of town services etc.
I travelled around TAS and researched the property market just recently so if you tell me where your property is I will give you my opinion on the area.
I hope this helps.
I hope this helps.
Todd Burns
http://www.freepropertyhelp.com.auIt depends on how much it is costing you to hold. Is it a drain on your finances or are you getting a good rent return on it? There are better areas to invest if you are looking for capital growth but you are going to lose quite a bit of money by getting out and getting back in again. It would pay to carefully crunch the numbers on this one before making a decision.
Also take into account that three years is not a lot of time in the property cycle and it sounds like you just bought around the peak so if you can afford to wait it out you will probably reap good rewards once the cycle turns to the peak again. If you buy in the peak it just takes longer to get back to the peak again rather than if you bought at the bottom of the market or the start of the rise.
My first IP cost $85K. Ten years later I had it valued at $120K. I was disapointed that it had not doubled in value and I thought that I must have bought in the wrong area, so I sold it. Two years later the same property had tripled in value and was worth around $255K. I was really wishing I had held on to it then. But I counted it as a learning experience and have been able to create a great portfolio of buy and hold properties now because I am set up and prepared to ride the property cycle for the long term
Hope this helps..
Todd Burns
http://www.freepropertyhelp.com.auStrict rules apply to boarding houses now in terms of fire safety and general health and safety related issues much because of what happened in the Childers and Kings Cross backpaker fires.
Make sure you have been in touch with the local council and you make sure that the boarding house conforms to all regulations before purchase and make sure you are not buying a future liability.
Tenancy rules are also different to the average family home market so make sure you are aware of these regulations as well. Also make sure that you know what the tenancy history and vacancy rate is like. You may have to spend a lot of time, effort and money getting new tenants if there is a high turnover rate.
Hope this helps.
Todd Burns
http://www.freepropertyhelp.com.auYou should be able to find something suitable in or around Kalgoorlie if you try hard enough. It is not a one horse town. I have a great CF+ IP there.
I know of particular cashflow positive deals in various areas of WA but they are the type that require a bit more risk in order to get the cashflow. Risk vs return is something you will need to consider carefully.
Good luck.
Todd Burns
http://www.freepropertyhelp.com.auThere is usually a supply and demand issue here. If the lease expires and there is a high demand at the time, it is likely that you will get more rent because the tenants will probably not want to move and try and get somewhere else, especially if they will just have to pay around the same rent anyway.
If the tenants are moving out and new ones are moving in they will simply compare your IP against the competing IPs. If there is not much competition then the landlord has the upper hand (although there is a magic line which generally a tenant will not pay above for a certain area and type of IP).
I prefer to raise rents frequently in small increments but on the advise of my property manager I was able to get $30 more per week recently when my tenant moved out and a new one moved in. It went up this much in only 18 months. This big jump in rent is unusual and each area has different dynamics so it is best to do some good research before you make a decision.
I also use the rental search engine at realestate.com.au to keep up with what the current rents are in the areas I have IPs. Property managers sometimes have no idea what the current market rent is for your IP and they just want to keep the peace with the tenant so they might need some pursuading at times.
Todd Burns
http://www.freepropertyhelp.com.auFor something a little different you could try a Google adwords campaign and include keywords such as ocean front or ocean views. That should get you some good exposure.
You could also set up your own website quite cheaply to market your house. You could try listing on http://www.owner.com.au and a few of the other online private sale companies.
I think http://www.Peachhomeloans.com.au still have a free property listing service that could be worth a try. Why not if it’s free.
Todd Burns
http://www.freepropertyhelp.com.auHi TDC,
Studios can be hard to get a loan for because of their small floor space. Anything under 50m sq is usually an issue for the lender. They are more difficult to sell for the same reason. They also tend not to appreciate in value as much as the other standard types of properties. There is usually not that much of a depreciation benefit either.
As Stuart mentioned, make sure you check out all of the expenses as well and work out what the Nett yield is not just the Gross yield.
Regards
Todd Burns
http://www.freepropertyhelp.com.auHi Sean,
I have bought properties sight unseen 3 times and I just made sure I did alot of research and got professional people to check them out for me. Here’s a few suggestions-
Call some different realestate agents/property managers to get more information on the area (as others suggest)
Download google earth http://earth.google.com/and see if you can view the property with it (use in conjuction with http://www.whereis.com.au)
Get an RP data or property value report on the property
Ask the local council about flood zones etc
Do a general internet search and find out as much about the area as possible
Do all of your number crunching on the cost and returns
Use good building and pest inspectors and ask them extra questions
Get lots of photos.
Get people to inform you about any huge towers, industry, sewrage treatment plants etc that may turn out t be your next door neighbour.
Todd Burns
http://www.freepropertyhelp.com.auHi All,
Inflation has just crept over the top of the RBA target range so something may have to be done to reduce spending and lower inflation. However, the rise in petrol prices may do the job and if so the interest rate may not need to go up.
The recent rise in petrol prices (if sustained) will equate to a 0.25% rise in interest rates for many people. It will be interesting to see what impact this has on inflation figures in the months to come.
Todd Burns
http://www.freepropertyhelp.com.auHi FHB
How do you suggest that Bobby8 goes about getting a copy of the report because I know some banks are reluctant to provide a copy.
It’s crazy really, because most of the time the borrower is paying for the valuation in the loan application fee but the lenders often treat it as their own exclusive information. [angry2]
Todd Burns
http://www.freepropertyhelp.com.auHi fishman,
It is difficult to suggest because I am not clear on what you want to ultimately achieve. The strategy you choose to employ will depend on what your end goal is eg; Do you want to want to retire in 2 years? keep working and create a passive income ? keep accumulating wealth ? or do you simply want to have enough money to cover school fees?
The exciting thing is you have soooooo many options. You just need to find one that gets you to where you want to be with the least amount of hassle and lowest risk.
The main thing that stands out to me is that you probably need to have a high level of tax deductions to bring down your tax rate. Have you got depreciation schedules done on your two IPs?
I will have a think about your situation and come up with a few ideas and I am sure other forumites will too.
I will be watching this post with interest.
Best wishes.
Todd Burns
http://www.freepropertyhelp.com.au
