Forum Replies Created
Clover I am doing some quick maths correct me if I am wrong Purchase 325k + 5% acquisition costs =340K, Interest @ allow 7% ,could be higher soon, 24k+ rates body corp fees,insurance, management fees,etc 6k= total yearly costs at least 30 k
Income= 16640x 80%= 13,300 + 8000 from government= 21,300 a loss of $9,000. about 170 a week Of course there is depreciation and tax deductions. It may be ok as an investment but, not particularly good if you want cash flow.Start a share portfolio first you will need this as a buffer against unexpected events, a period of high interest rates , peace of mind and knowing it is there you will have the confidence to take risks. I would take some long shots on unlisted companies that are developing future technology. At the moment I like the Kukler fuel injection system . there are numerous companies like this you might want to pick some you think will become common use. When your income tax becomes an issue that would be a good time to start a proprty portfolio There is more than one way to skin a cat but I feel the way generate real wealth is to buy high growth properties but you will have to decide wether you want to go with lower cost high yeilding property. This wil also depend on your income. My personal preference is to build a buffer with shares then buy high growth property Once you have built a reasonable share portfolio It is harder to extract your money without paying tax. With property you can create wealth without paying income tax and access your money via lines of credit. Personaly I think you would need much more than 20,000k to invest in property but I could be wrong.
Forgot to add that if interest rates go up 2% on a $500,000 thats an extra $10,000 a year in payments, perhaps 7,000 after ta x deductions. That would be because inflation is 3% or > meaning in real terms you loan reduced 485,000. at the same time the asset that money was exchanged for may have increased in value to over $540,000. Interest rates are of little consequence for serious investors with proper buffers in place. When you buy property you are buying time. The conditions that create high interest rates also increase the gap between the purchase price and the real terms value of the asset faster, creating wealth faster. Even if growth of the asset slows the real terms value of the loan decreases. Rental income wont make up for increasing interest rates.
Must agree with oztorro, Dont put your rents up as soon as you can , stay about 6 months behind the market . No-body likes greedy landlords. The average forgone credit to your bank account over that 6 month period will only be about $300 0r an extra $10 interest you will have to pay over that 6 months, about $ 7.00 after tax deductions. If you get to geedy and charge top dollar the tennant will want every trivial maintenace issue adressed and quickly and the more expensive options. Trying to save that extra $7 could cost thousands. A little bit off goodwill will go a looong way. An upside of interest rate rises is that the rise is usaully to counteract inflation which devalues your loan. So if interest rates go up it is because your loan has decreased in real terms.
Blaze why do you ask? then tell us you know the answer. I am sure we would all like to know where? When you say house, are you being general and include units?
ELJ. I think you have low expectations, why not aim a bit higher.
Brendy and African daisy , Silex has bought the solar thermal tower project from tru energy . It will spend 12 to 18 months to prove develope and refine, the research it has bought, with a two megawatt pilot plant. If it works a full scale 150 megawatt plant could go a head. Tru energy still proposes to build a solar plant but it is a bigger 180 MW plant but it will use photovoltaic (PV) panels. AGL propose a PV project 150MW, INFIGEN propose a PV project of 195MW. These projects are some of the largest in the world. I find it hard to beleive but I heard a report that the casino will create 2,500 jobs.
Geraldine, another point Adelaide is more reliant on the Murray River than mildura does that mean you shouldnot buy property in Adelaide. In fact only to-day a $700 million 9,000 km pipe line begining at Wemen near Mildura was officially opened to secure water for the wimmera and mallee, because of the security of supply at Wemen The longest pipe line in the world. Water can now also be sent from the Grampians to Wemen.
Gerladine In what respect do you see Mildura as being reliant on the Murray river. All places are reliant on their water source. Mildura has a big weir it is always full, even after a 10 year drought, with the driest years in recorded history. It also has a pipe back up pipe from the wentworth weir pool. There is also plans for a solar powered desalination plant that can be implemented if need be, plenty of underground water. recycling could be adopted. In early 2008 the 7.30 report did a story saying Mildura would become a ghost town because of a reduction in water allocations to irrigators the economy was affected for a while, adjustment has taken place, and the place is thriving now. You cant get a park , the roads and shops are bussier then ever, new shops and houses going up everywhere. In march 2008, despite what educators/mentors/spruikers and friends said I bought one house, and also some land , as builders had no work and did not want to lose their employees I got 2 houses built at almost cost price. which was just before the fhog. I have done very nicel y in Mildura Brendy I dont think it is to late to get some good buys. Do you have anything specific in mind. I would also suggest you may want to look at buying an old house in Swan Hill and doing a Reno to get a CF+ as it is a very tight rental market . But Mildura is also starting to get tight . I am not up to date with the market but a 4br rental in mildura may give a good return.
That is the good thing about st george you can get the free credit cards linked your account and get up to 8 weeks interest free credit . free travel insurance ,earn points and get free travel, acess your money virtually anywhere in the world.12 months extended warranty on purchases. purchases covered for theft loss or damage.
MD70 Are you talking fixed rates? I have just set up some accounts with st george aka bank SA, my broker said I would get the best deals there I didnt beleive him and tried to ge a better deal myself . I was stunned by how much better the deal was. The ANZ didnt want to lend money and their rates were high. Bank West wanted to lend money but their rates were a bit high, and fees were horrendus like many many thousands. St george were very obliging and easy to deal with even came to my place so I didnt have to go into the branch, only one fee $395, paid yearly No other fees. With this fee I get 0.6% discount off the standard variable rate which means my rate is 6.3% . I also get free cheque book, free debit cards, free visa credit cards with rewards programme.
Must agree with banker . From what I understand and am told by reliable sources banker is correct. There are alot of myths that are perpetuated by spuikers and authors that the sheeple accept as Gosble Who mindlessly follow and repeat it until every-one thinks it is true. Alot of those myths are contiinuosly repeated on this forum.
firsttime one thing I forgot to mention when you place your deposite you wil need a letter from the bank guarrantying you are good for the finance at settlement. You may want get some valuations done by a vauler before purchase.
Ideally you should drive around see whats happening in the area you want to buy look for land that is for sale that could be turned in to a subdivision. If this is not possible you will have to look on the net, look in pappers. Talk to agents ,developers, builders and council look on councils website and find out about there future plans for parks ,roads shops industry etc . Find out who is buying what where , when and why, everthing you can. You have to be one step ahead of the crowd. The crowd arrives a day late. You can do this as you have years to observe. Just keep an eye on things when some land sells to a developer find out who, he may be keen to get some sales under his belt just to show the bank , and to save on marketing and agents fees, the less blocks he has the tighter the supply and the more he can ask for his other blocks.that is what you have to figure out, you may be better waiting, but I doubt it because inevetibily there will be cost blow outs and delays over stupid things so latter the developer will find he has to ask for more. You buy the land on conditions that settlement is when you get a building permit. You set a date it may be 1,2, or more years, to have the buildng permit or you can opt out. Now you only pay a 10% deposite into a trust account. The good part is if you borrow say 10,000dollars for the deposite for 18 months the land will have only cost you about 1300 dollars interest and 700dollars for a solicitor to draw up a simple contract. I would expect in that time the land would have gone up at least 15 times that. You could buy as many blocks as you want/afford It is good you have a bit of foresight, In my limited experience it is hard to sell when you dont have a building permit because most people arent too savy, and when they decide to build they want to start as soon they can, and pay big money for a crappy location. and overlook that bargain gem. I expect to get a building permit myself in aboutt 2 weeks for a block I bought 14 months ago with interest for the deposite and legal fees cost about $1500 it is now worth $50,000 more than I paid. I like to buy property before it is marketed by real estate agents. Some people dont like to use agents to sell and dont see the potential in there property and will underprice it.
Blissy I have no hessitation in recommending "depreciator" 1300 66 00 3 http://www.depreciator.com.au excellent service, excellent results, excellent savings , turned -CF into +CF properties. My price was only $275.00 each but I think I got a good discount. I done mine on line and just sent them a copy of the building contracts. They did not charge for one because they said it is not worth doing a schedule. It was quick and easy. It would cost more I suppose to have an actual inspection. They are based in Sydney. I will be using them again.
RossD wrote:Hey Crusty, is that boot camp ticket valid still? I would be interested in using it if no one else would want it. Ross.Ross I would very much doubt the ticket is still valid , I suppose I could give them acall out of curiosity. I think I had a code number to verify the ticket and I have lost it.
Hendrick , . My preferred method is to just get out and do it. If you know what you want/ afford . Perhaps start in an area you are familiar with. Have a quick look on the computer to get an idea on values, but more is not neessarily better. Spending endless hours in front of a computer will get you now where except procrastinating, my self I cant stand it and wouldnt buy property if that is what I had to do. The joy I get fom property is in the acquisition, by getting out and talking to agents, builders , devolopers shop keepers, any body, and renters . Go to opens for rentals You can learn alot from people looking for rentals about what they want / where/ availability/rates/occupations etc. Even find some tennants. know what they will pay. Then go and buy accordingly to get a possitve cash flow property. Find a type of property that is in short supply it maybe a small unit or 5br house or land in a particular area, that has a general oversupply tThere may be a shortage of a particular property type that has only just occurred. A perceived over supply may have ended, because of cheaper prices has resulted in all of a sudden people realise theyre cheap and the stock vanishes. No-One will realise this unless they are on the ground looking and usaully the seller wont realise the tight supply. If you can negotiate a long settlement you may even be able to resell before settlement for a good profit if the short supply becomes known. Alot of very useful up to date honest info can be obtained for free. You can get far more info and a far better feel and understanding for an area in a fraction of the time you spend on a damned computer. Just by getting out and looking. some–one will give you some leeds. A gem will pop up and bite you on the arse, that you wont find on the computer. Dont rely on dubious and usaully out dated info on the computer or you will be buying today on what the market was more than 3 months ago.
Mr Elmo I bought the materials of Carly Crutchfield, as I said at her 2 day semminar ,at the Holiday Inn at Hindley st in Adelaide on the 23+24 Aug 2008 but it was her assistant that actually swipped the card. I am not sure of the price as I have 2 transactions made at that time. Iam fairly sure it was the 680 dollar transaction under the name sandfort. anyway Iknow it was less then $1400.00. Inside the package was a leaflet offering a FREE ticket to one of her 4, 3 day Boot camps to book your ticket call 02 93714799 and ask for Chris or Onil. Perhaps this was just some special promo. They must have had some spare seats they need to fill to keep the numbers up. If you want to send me a fax no. or an adress I can send you the offer. I never through myself in the deep end, I have done 3 small developments just to get a feel for it but have decided it is not for me. Can do without the hassles, and my time is more important to me than money It is good to have an interest in something but I dont want to do anything that is too time consuming.
Adviceman forgot to mention the important part if you dont read the previous rant this will sum it up. The bank valuation came back What I paid was right at the very top of the maximuim price it should be worth. Add on the agents fee of $12,000 makes it an expensive acquision. But the insight and knowledge gained into the attitude ,nature, compentecy and ethics of the real estate industry was invaluable. Worth paying an extra 20,000k , well almost . Being in the middle of a bidding war between two buyers agents showed me how not to buy property. I am now confident I can do as good a job or better than a so called proffessional. The rule I use when buying property is to make no more than two offers, make a fair offer at the low end of price range if not accepted make another afew thousand more. Shutdown the bidding and not get into a bidding war. It appears to me these buyers agents try to get the highest price they can so they will be offered more properties from their suppliers, and not have to go and look for them.
adviceman wrote:I think there are major benefits and also some challenges that come with dealing with Buyer's Agents like that. But if you want a large pool of possible sites, its a great place to look. good luck.quote=richief]Hi forum members.
I'm asking for any insights into using Metropole as a buyers agent? I am considering using them to find and purchase my next investment property as was wondering if anyone has any experience using this company or the like???
Thanks
[/quote] Adviceman My experience with metropole to put it mildly was very disappointing, while in Melbourne In Jan 2009 I noticed some very cheap properties along near the beaches in St Kilda and Elwood . I thought I should buy that,the prices seemed to low to be true, but knowing virtually nothing about the Melbourne property market and being the biggest single investment Ive made I engaged Metropole in Feb. My bank would lend $30,000 less than required and I did not want to cross securitize. So "no problem" metropole have brokers who are investors and understand investor needs , and for some reason she couldnt get the papper work direct from my accountant so had to get reams of figures and go visit her. After alooong wait like 2months she comes up with bank west with an interest rate of about 5%. She refered me to the manager of bank west, who was new. He was the loans officer at the Anz who held three clear tittles but would not lend me money. Now he has changed bank and wants to lend me money but he never receveived any papper work or details from the broker and have to go through the loan application again after a couple of weeks you can have the loan buuuuttt…. the interest rate will be 6% ,very high then, and there were thousands in fees I had to transfer all my other loans and mortgages to him costs of about another 10k , As if I would pay all that money for a more expensive loan. Although money wasnt Metropole wouldnt start the buying process until they had a letter fom the bank saying I already had loan even though I had some lump sums due and did not need a full loan. So any way to make along story short 4 months later I was presented with a property supposed to be like 20,000k cheaper than auction because the vendor does not have to pay for selling costs . Any way about amonth latter in a rising market the property was auctioned for about 40,000k less than the price they wanted me to pay 10,000k for. About a week after the 1st property a 2nd property was presented I was told I have to make a quick decision as it wasnt on the market yet but advertising would start in a couple of days. An offer was made the seller agreed I received the contract signed it sent it away. a long story and 5 weeks later a lot of excuses the contract still not signed by the vendor then I hear an other agent has been showing clients the property ,I may have mis understood something but there is conflicting reports who the agent was and I was told I had a case I could take to the reiv. At this stage I was ready to pull out but when he put in a bid of 10,000k more I thought that was stupid for a proffessional buyers agent he could have wore me down with a few 500 or 1000 bids, I put in one of 500 just to see what happens and how much extra he would bid above what he needed too. He bid another 10,000 and said that is his final bid, a strange thing to do if your intent on buying the property I made one final bid and said if Idont hear back from you in 2 hrs the deal is off. So for the next 3 days my Investing in melbourne was over. Then phone rings 'congrats youre the owner of the property" Only because the market took a huge leap that weekend and I decided if I didnt get in the market then I never would and all the hasle and time spent. I relented and went a head with the purchase. A two month instead of one month settlement was negotiated as part of the price but settlement took 3 months because the vendor couldnt get his papper work to-gether sooo paid an extra couple k for no reason Prospective tennants couldnt move in until settlement so were lost then it sat vacant for 2 months.
The property I purchase my self I negotiate, early access at the end of the deal by offering more money. If they dont like that at least acess to the garage so tennants can store some of their stuff and move in at settlement. The only time I inspected the property was the presettlement inspection as soon as I walked into one room I could see a water damaged window frame but again this so called proffessional couldnt see it even when pointed out. The agent wasnt interested with customer relations at inspection he just wanted to open the door and then get away as fast as he could and so it goes on and on but you should have the gist of it now. So from deciding to buy aproperty in Jan it took until the end of october to acquire and settle and until dec to get tennants I should have just went and bought any of the first properties I saw and saved a lot of money as prices were rising from march . . Also other property has given higher yeilds and higher capital gains.
