Forum Replies Created
G’day Paul,
10% seems pretty high for property management fees, we negotiated down to 6% as we were building a house at the back and the property manager wants to get it once its completed, but her normal rates were around 7%. Its a very competitive industry, so negotiate, advise them you are a property investor in the area and are looking for a property manager to manage your portfolio as you build it and I’m sure they will give you very competitive rates for your business.
Dave.
Wow, sounds like a pretty substantial project you’ve got on your hands, I’d say that you’re first step would be to set yourself a time/$ budget and work backwards from there.
Restumping can cost as much as $5000 (from memory)
Rewiring can be quite expensive, budget for a couple grand depending on the quality of the board and existing wiring.
Bathroom makeover can be as much as $10,000 for a full reno, less if you want a pure cosmetic freshen up.
Kitchen/Loungeroom joining ???? not sure whats involved here, could add some significant costs if its structural, less if its just removing non structural stuff & plaster.
Extension – how longs a piece of string, if you’re going to get a builder to do it, get them to quote, expanding outside the existing roofline can start to get pricey, you’ll need council approval, slab/stumps, plaster, electrical, windows, doors, all adds up.Lots of work, if you can’t do the work yourself then its going to cost you a pretty penny, but crunch the numbers, if it works for you as a PPOR or IP, then go for it.
D.
Ahh the million dollar question, unfortunately there is no simple response to this question. If you really want cashflow positive, you’re going to have to get out and start looking for them, there are so many different solutions to achieving cashflow positive properties, unfortunately I don’t think you’re going to get the magic simple solution on these forums, but have a read over pash forums and see how others are achieving this?
Expand your property knowledge through education, find how others have achieved what you want to achieve and replicate it, learn how to crunch the numbers and start looking for property.
Sounds like there isn’t a whole heap of capital growth to play with there, some $22,000, have you factored in the stamp duty that you paid when you bought, the legal fees/conveyancing, the cap gains when you sell, the interest you’ve paid while holding the property, etc etc. You’ll probably find that the $22k that you think you’ve made will be whittled away pretty quickly. What did you first purchase the land for? I’m sure you had a goal and some sort of feasibility study for why you bought the land, perhaps you should take the $22k as a bonus and push forward with your plans.
Crunch your numbers and see where you end up
Dave.[thumbsup2]
Interesting to hear Wylie, as I said, I think its like insurance, you don’t need it until something goes wrong [biggrin]
Could be wrong, I’m still pretty new to the game, each to their own.
D.
Hi kiwiperu,
Long story short, you can build over SOME storm sewers and easements, not over pits, and if you are planning on building over them factor in quite a bit to pay for the additional expense. Have a chat to the councils planning/building department, they’ll tell you real quick what you can and can’t do specifically with your block, then have a chat to an architect, he’ll tell you the design considerations with regards to building over the easements (if possible) and should be able to give you some idea of the additional cost.
D.
I’d use the architect, essentially they are a more qualified individual, nothing against Draftys. We’ve used both and our architect has been worth the additional money, he’s identified may issues and work arounds that the draftsman didn’t, now I can’t categorically say that this is the difference between an architect and and draftsman (may have been a difference between the knowledge of the individuals), but I’ve been far happier with my dealings with the architect.
D.
G’day Munno,
There are plenty of tools out there to help with tracking rents, expenses, etc with regards to property, but the question is is it worth managing your own IP. In my opinion no, I suppose the whole “To get a property manager, or not to get a property manager” is a bit like insurance, you don’t need it unless something goes wrong.
If you decide to manage your own property you’re going to have to find your own tenants, prepare your own tenancy agreements, collect bonds, collect rent, chase late rent, take phone calls from disgruntled tenants, arrange your own repairs, go to VCAT (if needed) etc etc. For mine, the 5-6% I’m paying my property manager is worth it, especially if you’re planning on holding more than one IP, I’ve just factored this into all my feasibility studies.
Up to you to decide whether its worthwhile or not, but I’d stick with the professionals, just like I wouldn’t draw architectural plans myself, I pay professionals to do the tasks that they do best and are qualified for.
D.
Our new townhouse we’re building had to have some sustainability features in its design to get it through council, can’t recall if this was DSE imposed or by the municipality. So this meant that we had to put in a water tank, solar panels, etc etc. We chose a water tank.
Something to think about going forward, people can buy/rent new houses/townhouses/units which are environmentally friendly and can potentially save them money, how does that impact on places without these features.
I’d say short term, there won’t be much thought and the impact will be low, but water is becoming a much more valuable commodity, have a look up north in QLD where they are on level 4-5 water restrictions. Maybe I should sell all my property and buy desalinisation and water treatment plants.
D.
Both, I’ve heard the saying (can’t quote who):
“I invest for capital growth, cashflow allows me to hold onto the property, capital growth makes me rich”
Sounds like a good idea to me. My primary purpose is to generate long capital growth, but I also have some good yields which allow me to hang onto them. Wash rinse repeat.
Hi Viral,
This sounds like a question for your accountant, unfortunately a partnership is not a partnership like a trust is not a trust. There are many variations on these and each has their own lending and taxation implications.
I’m currently involved in a series of joint ventures with family members, we’ve structured different projects differently based on what our goals are within that project. For example, our first project was set-up as 3 names on the title of the property, as far as the bank was concerned we were 3 individuals buying 1 property, we had our own partnership agreement which dictates that nature of our partnership, but the lending excludes the partnership for all intents and purposes.
For another project that we’re running which is a short term flip, we’re utilising a discretionary trust so we can allocate funds to the lower income earners.
Long story short, talk to your accountant, bank and/or mortgage broker and they’ll point you in the right direction.
D.
Hi Paul,
congrats on taking your first steps towards property investing, now onto your questions:
1. No it won’t cost you anything to get a pre-approval.
2. I don’t think there are any implications to having multiple pre-approvals, essentially you’re running a scenario and filling in paperwork to speed up the process should you find a property. Bear in mind though that the preapprovals with have a 3-6 month lifespan before you need to resubmit paperwork.3. With regards to FHOG and whether you should take it or not, guess this is dependant on your personal financial situation. I.e does the first home owner grant offset any rental income, depreciation, interest payment tax offsets, etc etc that you could be claiming for that 6 month period that you’ll be occupying your house. I recently watched a report on one of the evening news shows where a financial advisor told a 23 yo girl to buy an investment property and not take the FHOG, granted she was living with her parents so her living costs were low. Guess what I’m saying is crunch your numbers and see what works best for you.
D.
I’d rather take a hit from the All Black props than that sort of hit.
South Yarra and similar affluent suburbs will always command a high price and have shown strong growth figures over the past decades, it is a good area to invest in for capital growth but there is usually a high buy in (a friend of mine just bought a 1 bed unit on toorak rd, very original, very basic, $280 k), so depends what you’re buying for, growth is good, but yields are average.
D.
The 3 bedder would probably get 200, and the 2 bedder probably 170, they are about 100m from the uni so very close. The rooms can command about 120 per week, so the total for 5 rooms is around 600 per week for students vs 370 for normal tenants.
Cheers, actually its a duplex style place with one residence having 2 beds and the other 3, which makes it 5 beds in total.
Note that there hasn’t been any real interest in this? Would anyone be interested if I can get some more solid prices?
Hey, I’ve got to keep my costs down somehow.
Actually my friend is sourcing them from overseas, so he’s basically cutting out a few middle men hence the good prices.
Thanks Derek, any chance you can lay your hands on one of these and send it to me?
I’ve started developing my own template and appear to be on the same path as what you’ve described, but I’d like to leverage off what people are using that is working (i.e. is giving investors the information that they need, and is getting investor $$$).
Any help here would be apprecaited.
Thanks.
Dave.
Any feedback on this guys? I’m sure there are investors on here that have gone in search of equity partners????
D>
