Forum Replies Created
Thomas,
If the lease stipulates the Lessor has to pay all o/g’s, I’d move on to the next one.
In comparison, saw another similar cheapy in WA about 6 months ago, it had an asking price of 115K, with the tenant on a 5 yr lease, paying $ 200 p.w. escalating at 4% p.a. and the Lessee paid all outgoings. The o/g’s will kill the deal for you every time if the Lessor has to pay them, especially on these little cheapies.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
No…
I used the money that was earmarked for the Palm Pilot as a deposit on a small +CF flat and do the Grade 6 Maths in my head.
Nigel,
Don’t be so lazy…I’m not about to spoon feed you like a baby.
If you want proof – get out there and get it yourself if searching this forum for the post is too hard for you. You said you were open to learning something new…your lack of action doesn’t support your statements.
If you are waiting for me to lead you to them by the nose, you’ll definitely be waiting a while, whilst lazily concluding they aren’t there because I haven’t spoonfed them to you. You’ll be wrong, but you won’t know that.
Being blissfully ignorant is a wonderful position to take. Perhaps stick with peddling NZ. Looks like Ozzy big cities are either too hard or too big for you.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Langrabber,
For a prop worth $ 1.3MM, I’d be seeking an income of ~ 130K p.a. nett, not 54 K p.a. gross.
This deficiency of 76K plus all of your outgoing costs every year is what is killing it for you.
Maybe selling is the way to go. I can guarantee that your opportunity cost is far greater than 4.3 K p.a.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Nigel,
Redwing challenged me with the exact same question about 2 or 3 months ago. Posted publicly about 9 or 10 examples of props who were all positive, and all within major cities (mostly Melbourne and Perth), but I’m sure if I spent a few hours on the net, I’d find plenty in both Sydney and Brizzy as well.
I’m not techno-clever enough to know how to search or to link the post…you’ll have to have a scratch around yourself. Good hunting.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
The wife and I have been juggling IP’s and children now for the past 9-1/2 yrs.
We were renting and had one IP when the first one came along. We thought we were busy before, but then cranked it up a notch.
We were still renting and had two IP’s when the second one came along. We thought we were busy before, but then cranked it up a notch.
We bought and moved into our PPOR 2 weeks after the 2nd one came along. We thought we were busy before, but then cranked it up a notch.
We bought our 3rd IP when the thrid one came along. By this stage we were flip flopping between house / child / house / child etc. At this stage renovating houses was the most stressful with two young girls afoot, especially from a safety perspective. We managed to negotiate that minefield successfully.
Thank god that pattern stopped and the children didn’t keep pace with the IP’s. Having just purchased # 11, I’m glad the kids didn’t keep up.
Now they are 9, 7 and 4…and are quite comfortable with M&D’s dogboxes. They don’t have to put up with looking at houses anymore, as we don’t buy them now. We all had great fun yesterday cleaning up a big industrial warehouse, and I’ve found they enjoy just spending time with us. Amazing how much work you get through when the 7 yr old is on the end of a broom and the 9 yr old is driving a wheelie bin like her old man, whilst the 4 yr old scrubs toilets and shower recesses with her Mum.
Having said all that, I have stretched all I dare and reached the wife’s limit when it comes to juggling kids / having fun in life vs working on the IP’s. She’s put her foot down, and we are now restricting ourselves to CIP’s that require no cost input, no work and no stress. We have three on our radar currently, all CBD office blocks over the 10MM mark yielding 11% nett.
Obviously the kids don’t need to come on inspections any more, and there is no cleaning or hassles involved….nice to have some of the hard yards over the past decade bear fruit.
The wife has vowed to write a book some day about juggling all of the responsibilities involved and how she did it….I think I’ll just plod along for the fun of it, and slowly introduce the children to the finance side of things after they get the times table under their belt.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Nigel,
I’d suggest you go looking in different cubby holes before writing off the big cities for +CF with wide sweeping statements like that.
As posted before, there are +CF props in all of the major cities – undisputed fact. This is not to say however that you or your clients have the capacity or the inclination to chase these. If not, and you narrow your search criteria down to a tiny sliver of the overall property market in which you and your clients are interested in and can afford, then perhaps you are correct…but it is quite misleading not to qualify your broad sweeping statements as such.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I know people with a RIP mentality never want to hear this, but the best way to avoid the situation as you describe it, is not to buy the thing in the first place. Problem solved.
In the condescending words of a recent seminar presenter “Say yes if you understand”.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Herb,
Have a squizz at the Tell Tale forum. Not much more to tell.
Numbers on your place look reaL good. Don’t understand why you haven’t loaded yourself up with more ??
Hey – I presume the dashes / squiggles and all that in the brackets are happy thoughts ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
You say it’s being managed ?? Are you sure ??
Why not step up to the plate and take the bull by the horns. If it all goes to custard it’s in your lap anyway, so why not try to do something about it yourself. Palming off to REA’s and PM’s is a sure fire way of getting an average result.
Ethics ?? You’re joking right ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Heya Herbage,
Nah…I’ve got a pretty thick skin…hard to upset me, everything is apples Herb…unless you’re one of those pedantic nit picking useless lawyer types.
I agree for ressy stuff, the return does seem a tad fanciful. Looks & smells a bit like the “big fish that got away”.
I’m not offended in the slightest Herb. Hope you aren’t either. Happy days.
Onya with your 13% return with the CIP. Why don’t you tell us a yarn or two about it ?? I’m sure people would be interested.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Simon,
To answer your questions, the place is a major part (45%) of a strata complex of 10 smaller unit developments built in ’97. i.e. buku depreciation write offs ($105K in the first year alone).
The tenant we have in there is a gym operator, which sounded pretty dodgy to us when we first saw it, as we all know that they typically go bust every other year. These guys have been there about 3 years at that location, but successfully been running their business for 28 years and moved in because their previous tenancy was just too small. We estimate their nett rent burden to be about 14% of their revenue per month, so we feel comfortable that even if they have a dip, their is enough fat in the system that we’ll still get paid.
The nett rent went up $ 100 p.w. on Friday, so that escalation clause in the lease is very valuable…crank it up I say !!! It’s very nice that we don’t have to argue and bitch and moan over a rent increase, with this knee knocking threat of the tenant pulling out. On July 1 we simply invoice them for the greater amount and they pay up…no questions asked.
As part of the purchase, all of the gym equipment also came with the actual building. They are literally buying the equipment off us (my wife really) at 10% per annum, so as part of the due and punctual execution of the lease terms, at the end of the lease they will own the equipment. It’s heavy duty hanging and banging kit which all of the huge guys in Perth use. It’s funny to think that my wife owns most of the premium heavy duty lifting kit in Perth…anyway.
We are very happy with the performance of both the lease, the tenant and the cap. growth of the building…although I’ve balanced it out with subsequent purchases being higher in land content, a bit of a mix is a good thing.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
I’m confused hmackay,
Are you saying all non-ressy stuff is too good to be true, or have you got your RIP only hat on and can’t/won’t believe there is a better/softer wall out there than the one you are currently beating your head against ??
Hi Steve,
My top three would be ;
1. Strategies for minimising the time and cost and stress implications when having to evict tenants who refuse to pay rent / trash the place / refuse to move.
2. Deciding what is an equitable balance for the same dollars between (a) larger land content and worse infrastructure vs (b) smaller land content and better infrastructure.
3. How to assess people quickly who will actually ‘honour and take ownership’ of the responsibilities they undertake when signing a lease. To have the commitment in writing is one thing, for the tenant to ‘feel’ that is also the case and therefore the Landlord encounters no resistance is another step entirely.
Just to be cheeky, I’ll add a fourth ;
4. In the future, which way do you see the burden of payment of outgoings falling to ?? Do you believe residential tenants, like comm. and ind. tenants now, will ever tolerate paying these for the Landlord. Or indeed, do you see the comm. and ind. tenants palming these off to the Landlord in the future with the influx of residential Landlords buying more and more C&I IP’s, bringing with them their standard expectation that the outgoings are the responsibility of the property owner ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Redwing,
Yeah we turned up and it was good for a laugh.
No we didn’t learn anything. The wife was sorely disappointed in the content. She thought the $39 event was just a teaser for the $ 1,995 event.
We got more involved though than we bargained for, with Craig referring to me in the audience every 15 minutes or so. Here I am in a room of 560 people and who does the presenter single out for constant treatment – Christ, he even asked where I lived, holding up the entire crowd for my answer and what I thought of his statements on several occassions.
Both the wife and I thought it funny when Craig picked us as candidates for the FHOG, and yet when I answered his question truthfully about where we live, I had the entire 560 in the audience laughing at us…thinking that we were lying. I guess the joke was on everyone else, including Craig.
Anyway….no, we won’t be taking up the offer to ‘go to the next stage’. We don’t think it’s appropriate going to a costly seminar trying to learn something off someone who is a few steps behind us on the road to property wealth.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Being in the oil industry, I absolutely love high oil prices. Our work commitment (the drilling schedule) is solid til mid 2008 and I’ve had two pay rises totalling 14.7% over the past 3-1/2 months.
Petrol at the bowser and slightly higher costs on everything else to account for transportation charges is extremely minor in the grand scheme of things for our family.
Being paid in tax free USD helps heaps too, although I’d dearly love the XR back to the AUD to drop back to 50 or 52c.
In short, for us, higher oil prices means property is much more affordable. Bring it on…100 $ oil I say.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Redwing,
Just got booked on….see you there maybe.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
You may well be in the ‘right’, but it could drag out 6 years and cost you more than $ 100K+ along the way, not to mention the onset of grey hair and far worse medical problems.
One of my work colleagues is/has been going through this very same thing since 1999. It’s aged him terribly and frankly everyone in the office is fed up to the back teeth with his constant court dates and hearings, onsite meetings with councils and pleading his case with anyone who’ll listen (MP’s / journos / councillors). Apparently it all boils down to how strong are your opponents (financially and more importantly ‘connections’ wise). I asked him one day last year (only 5 yrs into the drama) if he thought it was all worth it…he candidly said no it wasn’t, and wish he’d never bought the place.
He was also of the strong opinion he was ‘in the right’…over time he’s of the opinion it doesn’t matter who’s right about the original infraction, over time the case gathers it’s own personality and the original incursion almost becomes irrelevant with every swinging Tom and Dick and Harry getting in on the act.
“IF”….now there’s a monumental word…my mother always used to say “If is in the middle of stiff”.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Great story Wylie…some real life tactics in that. How refreshing to read;
“Discussions are going swimmingly (pun intended) when the non-pool owners slap a letter from a solicitor requesting $25,000 for the portion of land. Situation goes from friendly discussions to solicitors letters exchanged and much heartache and possible expense in sorting it out.”
Looks to me as though all of this generic non-committal advice/suggestions proferred by forum members about consulting your solicitor and swinging them into action isn’t such clever advice after all. Perhaps there is a far better solution than involving those overpriced clowns.
I remember reading some sage advice from Noel Whittaker in one of his earlier books saying that involving lawyers and going to court is almost a guaranteed way of ending up on the ‘losing’ side, with all of the protracted stress/time and money issues that go along with it.
In regards to your specific concern pasandbec, I’d suggest if the house structure is indeed encroaching (confirmed by a licensed surveyor) the problem ain’t going to be resolved quickly or cheaply. Simply realise that, estimate the cost to rectify (don’t forget to include your time, it’ll be substantial) and if you are still keen move ahead with that re-adjusted figure.
Methinks once you’ve added up the real time/cost to rectify the situation and put your appropriate lower bid to the vendor, they’ll reject it outright and you’ll be walking away. If you still ‘really really want it’…then put up with the heartache and cost that will surely follow.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
s-t-d,
I agree.
