Forum Replies Created
krs,
I’m struggling with this as well. I’ve taken a few ‘leaps of faith’ in the past which have worked out well.
Taking this leap of faith of leaving the paid workforce appears bigger from this edge of the cliff as the lack of income doesn’t sit well with my current preferred philosophy of simply buying and holding.
The only thing I can think of is I’ll need to get into the “churning” of property….constant buying / developing / renovating / selling to create the cashflow that has disappeared from the job.
This isn’t my preferred choice as it seems like a hell of alot of work / organising, and being at the risk of factors outside your control…the main one being what the purchaser will pay for the end product. Of course ol’ Michael Carmody and his merry men at the ATO certainly take the gloss off any profits you make as well.
I think the decision to give up work becomes harder still if the current salary and package you currently enjoy is substantial.
Weighing up hard fin. numbers against soft lifestyle choices is difficult. Saying love and time etc is priceless is great, but nullifies any logical comparison. We all can’t sit and hold hands together in a loving family environment with zero dollars coming in.
Sorry I couldn’t give you a success story….I’m lined up at the edge of the cliff just as you are.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Yes yes…all very good…but how does the clock and the general pontifications tie back into investors purchasing individual title deeds ?? What’s the direct link – if any ??
From what I’ve seen, properties are valued in one of three methods,
1. Summation method
2. Breakdown of components (Land / depreciated building / lease value)
3. Market capitalisation based on nett rental ratesHow exactly does the clock link with these three.
Speaking of clocks…is there only one “big clock” that accurately caters for everything or are there a myriad of little clocks pertaining to what you are looking at.
I mean, is the Hobart hotel clock the same as the Mandurah canal waterfront clock or the Rockhampton service station clock or the Sydney high rise 2 bed apartment clock.
I’m lost ?? What I do know is that an old Queenslander called Fred Johnson back in the 50’s recognised that this clock watching was waffle and he continued to heavily invest in Ozzie props despite the experts warning against it. He’d made ‘a few bob’ by the 70’s. I shudder to think what the portfolio would be worth now. I think he still ignores the clock.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Changing the percentages wont help unless you introduce another owner onto the title (in WA not sure about other states).ie dazzling 50% mrs dazzling 50% will be aggregated on the same land tax client ID as dazzling 99% mrs dazzling 1%.
OK….if you say so…
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I tend to agree with Simon’s philosophy and have put my money into that direction.
Long term I don’t think the sky will fall in or real estate prices will flatten out. Dips and bumps for sure, always have been and always will be, but buying dirt should be a long term proposition.
Many guru’s have said they churn and burn to climb the net worth tree and keep their cashflows ticking along, but a few have been quoted as saying if they had sat on their holdings and not been “active”, they would have been in a much better position. Buying alot of real estate and then just sitting on it and letting it grow is a boring yet pretty good strategy. Sometimes the “do nothing” option is the best.
Where we are living now, the blocks were carved up in the initial development in 1914. Blocks sold for 26 pound (I think that’s $52). One pound deposit, bugger all repayments per month and no interest charged…geez the oldies had it easy. Given the latest VGO data, they’ve done 11.77% p.a. compounded over 91 years.
Our industrial blocks have averaged 12.91% over the past 41 years. I think Simon’s comment about dirt doubling every 10 years (~ 7%) is a tad conservative. Long term that’ll affect your projections enormously.
Sure, through the years there have been bumps and humps, but if you look long term things certainly stay ahead of inflation and you eventually get a “bob or two” behind yourself.
Simon’s proposition of magnifying that effect by purchasing more than one and holding the debt constant by paying IO definitely has merit…IMHO.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
I reckon the colourbond roof is the go.
Much lighter than tiles (I read 3 times lighter, but I reckon it’d be more like 5 or 6 times lighter).
Rafters can be slimmer, supporting less weight.
If you get white ants eating your rafters, there won’t be an enormous disaster with massive weight falling in around you.
No need for batons to hang the tiles off.
Much quicker to install…hence cheaper.
Better security. Tradies especially, but anyone worth there salt can very quickly remove tiles and enter the house via the manhole.
Colourbond doesn’t crack if tradesman step on the wrong bit of the tile.
Better water tightness – IMO – not as many cracks everywhere. Rectangular sheets of colourbond can be enormous.
Capital cost per sqm is alot lower.That’ll do….it wins hands down IMO.
Durability….probably tiles but then I don’t think colourbond has been around long enough to have the runs on the board. Corrugated iron has obviously and there is no comparison…hence why they invented colourbond to compete.
My mentor exclusively installs colourbond on all his developments. You pay buku extra if you want tiles….but then more expense is not necessarily better. Just a recognition that it’s more expensive to produce and install tiles. He sells after developing, so durability isn’t a large concern. Cheap, quick, looks good and does the job are his main criteria.
Looking at the ‘market’, I reckon the developers have chosen the colourbond roof as the go for all of the above criteria and hence made the decision for the market, and spun / marketed it in such a way as to be more attractive. They’ll do the tiled roof for you if specifically requested, but I’d say you’ll be forking out for a hefty premium.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Shawn,
I’ve used a Gerni before to clean a black tiled roof.
Cost $ 95 to hire for the day.
Nozzle pressure was 1,500 psi.
Best results were had with the nozzle held about 2 or 3 inches above the tile.Wasn’t aware councils had problems with the water used. Volume used wasn’t that much.
Straddling 3 or 4 tile rows with your feet (wearing steel capped boots just in case you swipe your foot…which I did twice) gave both good purchase and stability, but also time for the water to dry a bit before you came back for the next run.
Didn’t use a harness, but then there was nothing to anchor it to up there. Needed a big brick chimney or something, but only spindly little breather pipes which would of snapped off and fell on my head if I went south in a hurry.
Did use big pair of goggles to protect eyes, there is little bits of grit and vegetation flying everywhere. As Jan mentioned, be gentle with the capping and cement. It’s designed to keep out gentle rain, not 1,500 psi applied at 2 inches.
At the end of the job found out the roof was actually coloured green, not black. Thankfully the outside paint job hadn’t started, but we had to modify colour schemes thereafter.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Hey guys,
It was really good fun making the ads. The time spent with the make up and hair stylists on location was great !! Mullets are tops…
The pay wasn’t that good, but it may launch me onto bigger and better things later on in my career as an insurance salesman.
I took some advice from Luigi – the old Italian guy who has been doing all of the WA Salvage commercials for the past 25 years or so, you know the one with the blue truckie singlet and the handkerchief on his head folded at the corners.
All of the poncy Financial Advisers on the set had the personalities of wet cardboard boxes.
Next cab off the rank is a series of ads espousing the virtues of independent auditors who have to clean up the mess after hapless investors have taken advice from and then subsequently acted on and relied on qualified financial planners and things have gone completely belly up as usual….it’s sort of a rolling campaign I think ??
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Brissy,
I’m not qualified to give advice. I don’t know your full circumstances. All I can say is what worked for our situation, having taken some legal and accounting professional advice.
I’d suggest having a chat to your professional advisers…the cost of doing that compared to the ongoing higher Land Tax bills will probably be money well spent.
Maybe ask them why they didn’t suggest it to you in the first place ?? With trusts though, I reckon there would be a lot of factors to take into account. Changing the ownership structure may affect other areas that you currently enjoy…who knows….
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I’m absolutely staggered after having read all of that.
That is only one step down from all of these tenant advisory services, highlighting every trick in the book to avoid and evade responsibility.
The local friendly Moari tow truck driver is looking more and more valuable all the time.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
C@34…nah mate…everything is apples. I didn’t pick you for getting around in an Accent though…what exactly is an accent…is it an American drawl or perhaps a clipped Irish twang ??
C2…why ?? Are you selling ?? Have a squiz at the car thread.
Sorry Giddo for pulling this off-topic.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Thanks G7….no these are different. A grumpy old drunk Scottish woman who said she signed her marriage certificate…that all went to custard and now she refuses to sign anything else.
She may well be trespassing, but once again just because you own the property doesn’t give you the right (according to our wonderful laws) to turf all of their **** out.
None of the lawful muscle (Sheriffs or Police) will lift a finger without a court order…and you can’t get a court order without going down the “lawyer – let’s write 50 letters to one another” route which takes waaaayyyyy too long.
I don’t want to do anything unlawful though. Definitely no fires / firearms etc…definitely not worth it.
As has been seen previously discussed on this forum regarding quickly evicting rogue tenants without tying yourself in knots for months and forking out huge sums in legal fees, there doesn’t seem to be a viable solution for Landlords.
Looks like I’m back to the ol’ bobcat and truck again.
Taking back control of the common switchboard and turning their power off may be the go. Can’t do much in a factory without power. Don’t even know if a Landlord has the right to do that even ??
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
most of us don’t charge our clients a fee for our service as we are remunerated by the lending institutions.Steve…this is the bit that I always have trouble with. How do you squeeze the lending institutions for lower rates when you work for them and are renumerated by them. Surely there is a conflict of interest there somewhere ??
Is it like sitting down as a buyer with the real estate agent who is paid by the vendor and asking him how to get the lowest price ??
What leverage do you have against the banks ?? Are brokers price takers or price setters ??
I haven’t used a broker in over 10 years after a horrible debacle that cost us over $ 15K, a very significant sum when first starting out.
Hopefully the whole show has been cleaned up in that time.
Any comments ??
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
This is a very interesting thread. Obviously Milly you will get nearly 100% agreement on the Lawyers bit.
The bit that really interests me is the follow up after settlement – that indeed the official recording of the new purchasers in the exact format as specified in the Transfer of Land document has actually been carried out.
I must admit this is something I could not confirm, and have assumed that my Settlement agent and Titles office has indeed got the right structure / purchaser listed as the legal owner in the correct % etc.
You never get any feedback after settlement…other than the standard “congratulations, on this day the title has been transferred over to you and the mortgage has been registered to Bank X”
You never actually get confirmation what was recorded on the title. I suppose a couple of $9.00 searches would do the trick, but it’s something that never crossed my mind to double check my agent that the people you pay to do the job actually did the job 100% correctly. If the agent / solicitor did the right thing and the Titles Office stuffed up, I’d imagine that’d be a difficult one to chase down.
I must get onto this…it’s slightly important to be 100% sure the registered proprietor is indeed correct.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Is a survey of 0.12% of the population and then extrapolated out 1000x statistically relevant ??
I know the intent is to draw conclusions and general trends….but can this really be done ?? It’s probably the best data there is, but does it cut the mustard or is the data worthless…the question is C2, is the data and conclusions drawn out really better than nothing ??
Ah…statistics…ask want you want and you can manipulate the data to prove black is white and white is black.
When you were describing the overweight 40 to 50 aged male, I thought of alot of handymen and frugal property owners I know who are constantly towing a large trailer around the metro area fixing up problems and building and renovating homes for the “I love to shop” individuals. Perhaps they are all working their bum off to strive ahead and that filters through in their non-tolerance of lazier individuals. The softly softly attitude that is prevalent at Uni’s and inner city metro cafes where the “I love to shop” people thrive and chinwag isn’t fully appreciated on building sites thank God. Get in – do your job – get paid – get out.
The reason I thought of that, is that I am currently looking at purchasing a large gas guzzling 4WD. My current car is struggling to pull the trailer I have, which is essential to carting tools and equipment to keep the portfolio ticking along. This is where the whole PM thing and her highly greased tradesmen falls down for me. The cost of fuel hasn’t even entered into the equation. It’s chicken feed compared to what the props are making.
As you highlighted, the big 4WD is also great for when the family tragically meet up with a fully paid up member of the chardonnay swilling set on a Sunday arvo, having had too much to drink and as they swerve home in their environmentally conscious, jazzy, funky little Mazda 121 from the local caf definitely come off second best. Beautiful.
Hopefully I’ll find someone who is feeling the pinch of fuel prices and wants to get rid of their big 4WD.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
I spoil my tenants every single day by unfailingly providing them with a roof over their heads and four walls around them. I make a point of providing this to them every single day as is required in the lease.
Despite my absolute consistency, sometimes my residential tenants decide that paying the rent is optional, despite it being required in the lease. Apparently this is my fault when it happens.
Still waiting for any residential tenant to throw any goodies my way for free, as I am surely one of the most consistent and long termer type of Landlords. I’m not holding my breathe. Apparently this is one way traffic only. Landlord’s don’t enjoy choccies and wine….we subsist on bread and water apparently.
None of the above applies to my non-res tenants.
The industrial tenants spoil me every day by spending money on my property, always pay rent a month in advance and keep the property clean and attractive to their customers. I reciprocate in kind and our business relationship flourishes. Actually, they appreciate being left alone most of the time and simply get on with making oodles of money in their respective businesses.
I think if I gave some of my stone cutters, truck drivers and wood merchants a bunch of flowers and choccies at Xmas there would be a few strange glares.[blink] Maybe some electric power tools and a handy pocket knife….now ya talkin’.[biggrin]
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Onya Len….good venting.
I also find that the deals I have gone through with never made it to the net. Sniffing around and being as up to speed as the resident locals is the way to get the good deals.
Once they are taken, the dross is then put up on the net for all to squabble over. Why put up on the net and go thru the rigmorale when keen local buyers are scrambling over themselves to buy the joint.
Do compassion and hard nosed business really mix anyway ??
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Absolutely Redwing,
I think in WA we are seeing general rents rising by 5 or 6%…about time too. Tenants have had it far too low for far too long.
Personally, I’m negotiating jumps ranging from 12% up to 60% on past leasing levels that were woefully inadequate.
Corporate profits are up, especially in resource based businesses, and they don’t mind a bit securing properties with higher rent levels.
It’s all good from my end. Thank God I don’t own anything in the Eastern States.
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Ozzies think petrol is expensive and think that’s bad because we are on the cost side of the equation.
If you think about it, there are quite a few chaps who think this is absolutely fantastic as they are on the revenue side of the equation. There will be large and powerful resistance to stay in this regime…or improve it further.
In the short to medium term, these green alternatives are mickey mouse and not nearly of a scale that is relevant. The transportation energy consumption is immense. Until the voracious US domestic and industrial market does something to rectify their habits, nothing anyone else does will count for a hill of beans…we are just too small and totally irrelevant to make a difference.
Production of crude oil and natural gas is still the # 1 game. The Ozzy Fed Govt already gives 125% tax deduction on exploration costs for companies willing to try and find /produce more. I think the key is to find and produce more and reduce our dependence on massive value imports.
If not, those floating supertankers out there on the seas, whose contents are bought and sold many times over (sometimes up to 17 times) by ‘speculators’ and traders in New York and London. If you could kick those leeches off the bandwagon…they produce nothing and do nothing other than shuffle paper and create this waffle called “market sentiment”, and of course add $ to the cost of the load, the price of oil would be back around it’s normal 35 to 40 region.
If the US would back off and get out of Iraq, and allow them to bring on stream their 3.7 MM/day production, that would drop the price of crude enormously. With them spending a Billion USD every week having US carrier groups protecting the Straits of Hormuz…I can’t see that happening anytime soon. God Bless America.
If you are unhappy about fuel prices, call up Johnny Howard’s boss here in Australia, Mr Tom ‘something’….the US Ambassador, and have a whinge to him. He’ll tell you…
“The US is working for the good of all Ozzies and don’t you worry your pretty little head about it…we’ve got it all figured out. Please turn on CNN so you can form your own special brand of opinion…you’ll soon come around to our way of thinking.”
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Great topic Wylie.
I find it depends who exactly you are interacting with.
With my grubby industrial tenants, I find overalls and sneakers the best.
When negotiating with General Managers and Directors to take over large properties on 4+ year leases, smart casual….never suit and ties. Alot is by email and phone…so back to the tracky daks.
When getting quotes with tradesmen…definitely the overalls.
When getting finance with the Bank, I usually stagger out in tracky daks, unshaven and bare feet. My Banker comes to me and he knows every financial detail, so clothes and image mean nothing to him. He goes by numbers on the page. Of late, we always seem to be either chopping down a tree or digging out stumps when they pop around. It’s funny discussing likely interest rate movements and intricate details on loan negotiations with sand and sawdust in your hair. I’ve had sweat drip down from my nose on the bank application before….the female associate banker was dolled up to the 9’s and was a bit grossed out at that, but I quickly told her to toughen up and stop being such a great nancy. I asked if she wanted to muck in and help dig and chop out the stump with me. Surprisingly she declined. My Banker didn’t bring her next time.
When dealing with residential tenants, smart casual always…never overalls.
Happy days….sounds like we are all in the same boat. You simply can’t get anything done dressed in a suit or Prada….whatever the hell that is…sounds like a car from Czechoslovakia ??
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
Aly,
We purchased a holiday shack between Two Rocks and Jurien about 5 yrs ago as a ‘get away house’. It’s on the top of a hill in Guilderton with 180 deg ocean views. We have it on casual holiday rental, and we sneak up there every now and again when it is vacant.
According to VGO figures, it’s been doing 35% cap. gain over the past 12 months…I’m not sure I quite believe that though…probably a low number of properties have turned over.
There’s a whopping difference between Lancelin and anything south vs Jurien. The coastal road only goes to Lancelin. If you want to get to Jurien you have to go around on the Brand Hwy. Apparently the plan has been to extend the road up to Jurien for the past 15 yrs or so, but as usual there is the usual bickering and arguing between State and Federal Govts over funding and timing.
In terms of cashflow on the place, it costs us about $4K p.a. to hold the place after tax. It’s gone up about $220K in value in those 5 years, so we’ve made 200K and had great holidays for free for the past 5 years. The wife and kids absolutely love it up there.
Takes 70 mins to get there from the Perth CBD. Much quicker than the 3 hour ‘down south’ thing. Best of all there is a lovely quiet fresh water river and no awful skanky estuary smells.
Best thing about Guilderton is it’s on septic tanks. The council has said “No more lots”. Apparently 414 lots is all the environment can handle and that’s it. So if you want to be near a fresh water river close to Perth with ocean views in a country atmosphere, there’s only one mechanism to cope with increased demand…higher prices. [biggrin]
Cheers,
Darryl Moore
“No point having a cake if you can’t eat it.”
