Forum Replies Created
- I have a 2br unit in Qbn, it has been continuously rented since I bought it, it is very close to positive gearing (in fact could be, but I want to keep the rent down to keep the tenant)I am able to manage it myself so less costs there.
I think this type of investment is soundThis makes no sense to me either….sounds like something a residential tenant or caretaker would say.
Your current rental rate is taken by other investors and renters alike as being the “market”, when it really isn’t. It’s more a xx% discount due to ‘scared factor’…or something. I’m sure this philosophy is more prevalent than others would admit. Ressy tenants love finding LL’s like this.
$8.22 per day before tax….
Take another look at the deal Deb, one event re: the property will chew that up in no time at all.
The last time I went through a REIWA standard management contract with the PM sitting across the table – 5 years ago – this sector on “gross collections” was one of the first to get scrubbed out.
All of the other REIWA standard clauses also got scrubbed, especially section 10 regarding terminating the PM’s services. Always scrub that one, as I think section (iii) says that despite cancelling a PM’s appointment, the Owner shall reimburse the PM for all future lost earnings for the remainder of the contract…yeah right…
Time spent going through the “standard” contract is time well spent to avoid problems such as you describe. Whenever I hear or read the word ‘standard’, my radar is immediately on full alert…right after that word is said or written is exactly where you are getting shafted.
Would love to catch up grossy, but I won’t be in the country then.
You seem very interesting with your techniques.
Like you, I don’t drink beer too much…maybe a rain check.
When I’m next in Sydeny, I’ll drop in and say g’day. [biggrin]
Yes it should be easy, especially if the Lessee plays the game and wants to extend.
Our last purchase inherited a tenant on a 3x2x1 lease, with only 6 months to go with the final option. We simply typed it up on a one page piece of paper stating the new nett rent to be paid, new lease term and option (4×2 woohoo !!), new escalation rate p.a. of the nett rent and emphasised they were responsible for all property costs (CR / WR / LT / Ins / all consumables).
Both parties signed off and happy days for the next 6 years….sorted.
Naughtyjonny…no you’re not missing something…it’s pretty stock standard stuff.
At the tribunal, the PM was left waiting for an hour while they heard the tenants sob story.
Ah wellI’ve heard PM’s usually charge $ 85 to 90 per hour to represent you. I don’t suppose you’ve seen the bill yet for him / her to stand there waiting. I also don’t suppose the tenant is going to chip in for that expense either.
Involving and tying your wealth building strategy to some strangers private life, and all of the usual trials and tribulations that accompanies it makes no sense to us. We found the things we were interested in (growth / cashflow) had absolutely zero in common with the tenant’s pedantic little domestic wishlist.
We also found the laws heavily weighted against the Owner, you are forced to take a backseat…your objectives as Owner are definitely not at the top of the priority list.
Anyway…good luck with your overall strategy.
hi dazzlingWell hello to you too grossy…hey matey…don’t confuse me with vexil…???
for those of you who believeHeya F,
Nice post with well supported data.
I think you’ve hit the nail on the head there. If you have a look at most of the posts on this and other forums, ‘most people’ will included the phrases “I believe” or “we feel” to substantiate their point, which of course has no bearing on the subject matter to hand…these two phrases were developed by the religious folk way back when so as people didn’t question what was being dished out. The same pervades today.
By questioning people’s beliefs, no matter what evidence you put forward, you will seldom – if ever – change their belief.
Once again, excellent post.
BTW, do you have excellent detailed data on other forms of R/E other than just houses and units ??
So Toni, given your recent experience and the glaring example of your lack of ‘control’ that you actually have as a Registered Proprietor of a residential property in a Lease situation, what is your opinion of the ‘whole show’ as a way of making money…both growth and income ??
Any suggestions for those contemplating doing the same ??
What do you think of the Laws contained within the RTA and how they are applied in a real life situation….were you impressed or satisfied ??
If it’s within riding distance of the School of Mines campus, I’d be renting it out to a couple of 2nd, 3rd or preferably 4th yr students. I say 4th yr students, ‘cos they are quite serious and usually want to finish their degrees and are usually quite organised by that stage.
Give the REA the flick, and have a chat with Rufus Davies who’s probably still running the Agricola College. They are always trying to farm out the senior students to private house situations.
We were paying $ 170 p.w. to rent a hovel back in ’91 that was worth about $ 65K. I’m sure if your house is nice, you should be able to command a decent rent and get a decent set of tenants.
If that fails, try the mines, people are always looking for good accomodation that females will actually agree to live in…after all, it is a bit of a ‘boys’ town. If your place is nice it should attract people.
Yep, I’ve got a few thoughts.
1. I’d shake the guys hand and say well done, you’ve ‘made it’.
2. I envy their independent financial position. They probably take the part time jobs more for the social interaction, keep themselves mentally active and keep abreast of the community issues. It sounds like they don’t need the money.
3. I reckon their stress levels would be way way down.
Masters of their own destiny. Fantastic. I wish my grandparents were in a similar position at the same stage.
Nothing to do in my eyes, and no input needed. Perhaps instead, we should be taking some ‘output’ from them. Are they members of this forum ?? These are the type of people I like to sit down and chat with for hours. Very valuable community members.
Well done to them both.
But boy, could our group do a power of good with that equity they have…
For the tractor lovers I have a 1950’s Fordson Major Kero/Petrol she has one way hydraulics a 3pl and PTO – way ahead of her time! I have various other contraptions around the place, but nothing anyone here would be interested in.Hi jenwren, I reckon you’d be able to sit down with my father and while away the hours swapping stories over a few beers. He also had a 50’s Fordson Major (linked up in tandem with another).
He used to spend years and years making absolutely no money chewing through the deisel doing endless laps of dusty paddocks with his tandem setup…in the hope of making some money….it never eventuated.
He paid 2,500 pounds in ’54 for his, when the land he was farming was worth 0.8 pound per acre. His tandem tractor was unceremoniously dumped in the paddock to rust away in ’83…now worth less than 0. The land is now worth $ 370 / acre.
For me as a teenager looking at this happen, didn’t take me long to realise what an ‘asset’ really meant.
One of the largest risks with a site such as you are looking at is site contamination….doesn’t matter what it is (grease / oil / petrol / heavy metals etc etc) it will cost you big time as Lessor to rectify if indeed you are responsible. In the councils eyes, as you will be the Registered Proprietor on the title you are responsible.
Check the fine print in the Lease to ensure that the current Lessee is fully responsible to de-commissioning the tanks and surrounding Earth before relinquishing the land back to you when they leave.
Rectifying the contaminant will cost you big time before an Environmental Engineer from the council will sign off to say the site is clean.
Of course, if the contaminant happens to leach outside the site boundaries and starts affecting other Land Owners…look out, you may as well kiss you property investing days away, ‘cos you’ll be court so much you won’t have the time or money to look for a 1 br unit.
Other than that, happy days if you can find a clean, reliable long term well paying tenant. Good way to offset your rising private fuel bill…get an oil company to be your +CF tenant.
Good luck with your decision.
Of course not….and for a very good reason. It’s copyrighted for their fully paid up members. What you are asking for is against alot of laws. Pedantic and supercilious I know, but that’s the Law by Lawyers for ya.
Their solicitors don’t take too kindly to the younger generation who naturally expect everything to be free and readily downloadable from the net.
My understanding is that, way back before WW2, REA’s in Perth formed their cosy little club called the REIWA to protect their interests and put forward a united front to the dross (that’s us) not willing or able to join their club.
Enquiring about a digital copy of ‘their’ form has absolutely no financial or material advantage to their club…the reason probably why you can’t download it.
If you go to the “horse’s mouth”, they’ll very quickly tell you it isn’t in their interest to give you an electronic copy…and could they introduce you to one of their highly respected fully paid up members.
An agents cosy club to primarily protect agents interests is not the place to be looking for forms such that you can bypass agents ??
A “poor boy” alternative might to be grab an old one and simply type it all up….trouble is, the general conditions form where most of the contract is (the yellow one that everyone gets handed and never reads through fully) forms the bulk of the contract and you’ll be there forever typing that up. Of course, using their form word for word is infringement of their copyright and you could rightly be hauled into court by REIWA for infringement if you ever intend, or indeed do use it and any agent gets a sniff you have.
Of course, if you just want to have a squizz for general interest’s sake, ask any member of REIWA.
John,
Writing a commercial lease is not rocket science. It’s highly over-rated actually, although the experts will definitely say that it is very unwise to reduce their revenues and far better to give them the job.
In terms of length of lease vs cost, a water tight lease takes the same amount of time and mental effort to write up a 6 month lease with no option, as it does to write up a 10 year lease with a 10 year option.
If you are down to 12 month terms, that’s getting down into the fickle residential territory. I’d be looking for way more commitment from the Lessee than that. If they won’t yield to a longer term, look for better Lessee’s.
Assuming of course you can cajole the entire gaggle of former owners to sell en masse or in a reasonable time frame. I see this as the fatal flaw in the strategy.
I find trying to get 2 separate parties to agree on all terms and conditions hard enough. If it involved 10 or 12 separate parties, given human beings and how they all think differently and have their own little agendas and barrows to push, I’d definitely give up before I even started.
Assuming you intend to leave your money in the asset field and don’t go and purchase a great big bag of lollies with the proceeds, selling to me is akin to jumping from one investment vehicle to the next, as you travel along down the road of wealth.
Makes sense I suppose if your old jalopy is stuck by the side of the road with two flat tyres and the opportunity arises to hitch a ride in a Ferrari zipping along the road to wealth at a great clip of knots….assuming the clown in control isn’t driving you into a ditch and you don’t have a hand on the steering wheel !!![bike2]
Our group likes to drive down the road of wealth in a convoy of large road trains, rather than hundreds of little Mini Minors. Because of this, the cost of ditching one road train and jumping into another one is very expensive…like a couple of Mini Minors type expensive…so we simply don’t do it. Driving road trains through the traffic also has other advantages, where potholes and minor traffic jams become less of a concern. 10-4 rubber ducky !!!! [biggrin]
I suppose the last time we sold, back in ’97, we were driving Mini Minors. I’ve posted the below in another thread, but thought it appropriate to explain why we don’t sell any more.
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For the benefit of those interested, I’ve distilled a 75 day process ;
1. House put up for sale.
2. Neighbours make an offer directly with agent during first home open. Full price. Their names and address clearly shown on contract. Finance, white ant and building inspection conditions attached.
3. Offer accepted by us. Very happy after the massive amount of work and hours put into the property.
4. Time lapse of 30 days. Under offer sticker on sign. All enquires cease or told “it’s gone” by agent.
5. Offer withdrawn – due to white ant clause – “walk away clause”. Both we and the REA completely floundering by this stage.
6. We’d just spent 26K and 3 months fully renovating, which they knew, being next door. Not a white ant within cooee of the place.
7. 20 more days pass.
8. Offer received, 16K less than asking price, from a “and/or nominee” from a mystery buyer via a conjuncting agent that our agent had accepted a 60/40 deal without our knowledge.
9. Our agent knew the mystery buyer but decided not to inform us.
10. After much encouragement from the REA, we accepted offer…not happy with the $, especially after the neighbours offer was fresh in our minds, but were sick of the whole deal and wanted out.
11. Nine (9) days before settlement, mystery buyers … nominees … reveal themselves in the settlement documents from the purchasers settlement agent….surprise surprise…the very same lovely people from next door.
12. Flurry of emails and letters to all parties, REA shrugs shoulders and said “At the end of the day you signed it, nothing to do with me”.
13. Property settles and we walk away with 16K less 2 months after we should have settled…but with a whole bunch of lessons under our belt.
I look back and think now about the overall lessons we learnt ;
1. We are the investors. All authority / responsibility / risk and reward rests on our shoulders. Don’t blame REA’s or purchasers or lawyers or friends or anyone else. If you’re not 100% happy and fully understand what’s going on and everything is transparent, don’t sign.
2. The REA has not a jot of influence or power in the legal property transacting process. They are a mere bystander and we do not rely on them at all nowadays.
3. Contract isn’t a solid contract until all of the Mickey Mouse clauses are removed and it’s unconditional cash on the table.
4. Haven’t sold a property since.
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Steve, not sure if that was what you were looking for ??
Nah, I think you’ll find Mr blogs that the people with that sort of wealth / power that you are describing do not invest in the things that you are looking at.
Reducing the price somehow of the “assets” that you are capable of, and interested in buying doesn’t – in general – interest them one bit.
Excellent post shake-the-disease. Well done.
Reluctant to go through the nitty gritty, but for the benefit of those interested, I’d have to distill a 75 day process ;
1. House put up for sale.
2. Neighbours make an offer directly with agent during first home open. Full price. Their names and address clearly shown on contract. Finance, white ant and building inspection conditions attached.
3. Offer accepted by us. Very happy after the massive amount of work and hours put into the property.
4. Time lapse of 30 days. Under offer sticker on sign. All enquires cease or told “it’s gone” by agent.
5. Offer withdrawn – due to white clause – “walk away clause”. Both we and the REA completely floundering by this stage.
6. We’d just spent 26K and 3 months fully renovating, which they knew, being next door. Not a white ant within cooee of the place.
7. 20 more days pass.
8. Offer received, 16K less than asking price, from a “and/or nominee” from a mystery buyer via a conjuncting agent that our agent had accepted a 60/40 deal without our knowledge.
9. Our agent knew the mystery buyer but decided not to inform us.
10. After much encouragement from the REA, we accepted offer…not happy with the $, especially after the neighbours offer was fresh in our minds, but were sick of the whole deal and wanted out.
11. Nine (9) days before settlement, mystery buyers … nominees … reveal themselves in the settlement documents from the purchasers settlement agent….surprise surprise…lovely people from next door.
12. Flurry of emails and letters to all parties, REA shrugs shoulders and said “At the end of the day you signed it, nothing to do with me”.
13. Property settles and we walk away with 16K less 2 months after we should have settled…but with a whole bunch of lessons under our belt.
I look back and think now about the overall lesson we learnt ;
1. We are the investors. All responsibility / risk and reward rests on our shoulders. Don’t blame REA’s or purchasers or lawyers or friends or anyone else. If you’re not 100% happy and fully understand what’s going on and everything is transparent, don’t sign.
2. The REA has not a jot of influence or power in the legal property transacting process. They are a mere bystander and we do not rely on them at all nowadays.
3. Contract isn’t a solid contract until all of the Mickey Mouse clauses are removed and it’s unconditional cash on the table.
4. Haven’t sold a property since.
Thankfully, these residential debacles are behind us.
Enough, it’s bringing back poor memories.
