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Thank you. You make some good points Trakka, and I feel less concerned now as a result.
Maybe I'm being too much of a control freak
I'd be interested to know whether the majority of investors review the tenancy applications though. I wonder what happens with all those tenancy applications in investment books; i.e. do people really use them and do they get to see them if they use a PM?
Daedalus.
Nebo is a funny one. There are a few mines nearby, but it doesn't have a boom feel to it. It is predominantly a cattle town.
At the moment there are a number of vacant and unsold houses. Some of these are actually leased though to one of the energy companies.
There is talk of Nebo being set up as an 'inland port'. I understand this to mean that they will set up heavy manufacturing and servicing here e.g. they will build and service rail rolling stock for use within the basin. The advantage this would have is that Nebo is already up on the tableland where the basin is. It's another hour or two down to Mackay, and so Nebo would save a lot of hauling up and down the hill. If this comes off, Nebo would change appreciably.
Nebo is close enough to the coast that workers in the local mines often just live in Mackay and drive or bus to work. Some work 5 days/5 days off, and this lets their families enjoy a coastal lifestyle. This would seem to be infinitely more interesting than living in Nebo, unless of course you were born and bred there maybe.
Really nice pub in Nebo though
Daedalus.
Hi,
The only lease agreements I've seen in this area are for 'annual' use i.e. holiday usage. However, with those there is little security. You can be evicted pretty easily. With some they'll remove your van and charge you the removal cost.
I don't know if this is different for permanents, but I suspect that you don't get much security for your site fees.
My other comment is that a verbal agreement generally isn't worth the paper it's printed on
I'd be interested in what you find out though…
Daedalus.
crashy wrote:dont use floating floor.one drop of water and its ruined. Its noisy, looks crap, affects resale and warps in the sun.
We have clearly had very different experiences with floating floor. I've had floating floor in a kitchen for 8 years, and there is no water damage whatsoever. It also gets a LOT of sun and has not warped or faded. Not sure what you mean by noisy. If you mean that you hear footsteps, well you get that will floorboards too. I would argue that floating floor is quieter – especially for rooms below, because of the layer of insulation that gets put down. I can't imagine anything else that might cause noise apart from poor installation.
Whether it looks crap is a personal call. I don't think it does, and it looks THE SAME as it did the day it went in. You may not get that with polished floorboards. It certainly looks a hell of a lot better than the wear and tear on the polished floorboards in one of my other properties.
As for whether it affects resale, I don't know. I can't really see how. Unless of course I happened to be trying to sell to your good self
It's always dangerous to generalise
Daedalus.
The strategy was to go hard on CF neutral/slightly CF+ to build the asset base. I've got a fair amount of equity available, and I wanted to max it out then let capital appreciation do it's thing, with a revaluation each year and topping up the portfolio with the increased equity.
As it happens, my plan didn't consider that lenders would only take 70-80% of rental income into their servicability calcs, so I'm now approaching a limit on servicability, despite having enough surplus income to pay down loans by about $5K every month. Strange.
Just as I was pondering that one, the economy started to jitter, interest rate rises have begun to accelerate, so now I'm kind of glad of 2 things:
1. That I didn't get as far into my LVR as I could have
2. That I discovered this forum and have learnt so much so quickly from it.So now, my investment criteria has swung towards a very CF+ focus – enough to buffer significant economic turbulence. I suspect that with such tight criteria, my next investment will be from a 'very motivated vendor', and since the cash flow will stack up, it will still be a good thing regardless of market sentiment (in fact, because of market sentiment).
I see it as similar to Warren Buffett's investing approach: work out what an investment is worth based on it's cash flows. If the price is below that valuation, buy it. If not, don't.
It may be some time before my next buy trigger, but so be it.
I've got some sharemarket and property trust investment in index funds through my super, but there's no point taking that out as I can't get at it for a looong time. So it can stay where it is and ride out the storm. I'll try to ignore the net worth impact, which doesn't really mean that much anyway
So for me 2008 will be the year that forced me to invest the way I should have been investing all along.
Should be an interesting time nonetheless…
Daedalus
