Forum Replies Created
Excellent post Marc1;
I concur with most of your points. Comes down to attitude and not being influenced by the wet nursed PM’s, who in general may know something about managing individual properties, but have precious little experience in managing wealth from a personal standpoint.
Residential renters have it all over Landlords in this country. I found London and New York to be amazing. There the Landlord can be choosy due to the number of tenants clambering for properties.
That attitude shift is all that is needed, and of course for all those vast tracts of land surrounding each Metro area being cleared for new housing coming to a halt.
Cheers,
Dazzling
“Go hard or go home”
Hi eeshole,
I’m with the Commonwealth Bank.
Have no idea if the rate is available to the general public.
Cheers,
Dazzling
“Go hard or go home”
Zippys,
Locked in less than two weeks ago on a commercial financing deal.
Fixed for 5 years at 7.17%. Loan is a tad bigger than your amount though…scale effects – don’t know ??
It was 6.85% when we exchanged contracts with the Seller, and during the settlement process went up by 0.32%…not happy…
I’m told by my lender the rates have not increased for 4 and 5 yr fixed rates after the recent RBA hike. Variable, 1 2 & 3 yr fixed have though.
Cheers,
Dazzling
“Go hard or go home”
Waffles,
Have you read the lease in full yet ??
Don’t understand how the rent can float between 25K and 27K, is it dependent on something ??
Who pays the 4K outgoings ?? If it’s the owner I’d walk away.
25K – 4K ~ 6.77% nett
27K – 4K ~ 7.42% nettIf it’s the tenant, I’d still walk away…
25K ~ 8.06% nett
27K ~ 8.71% nettThere are way higher nett returns out there in the comm market than mid – 8’s.
My verdict – keep looking.
Cheers,
Dazzling
“Go hard or go home”
Phil,
I think what Kerry Packer said was “You only get an Alan Bond come along once in your life” – referring to the buyback of his beloved Channel Nine Sydney and Melbourne for around 300MM after flogging it off to Bondy for 1050MM a few years earlier.
As for props coming off the boil, Perth, like Adelaide as Carlin refers to, is not experiencing the falls that the eastern states have seen. having said that, both Perth and Adelaide didn’t enjoy the highs seen in Sydney / Melb / Bris so it’s only fair I reckon.
All up after the correction I think the eastern seaboard is still in front compared to WA & SA – so no whingeing from you guys OK ??
Cheers,
Dazzling
“Go hard or go home”
Woodsman,
I’ve asked the same question to the Principal of the largest QS organisation in Australia. His response was thus;
“Our highly qualified surveyors assess that during the site visit and we then feed that data into our proprietary model here. The output to the model is what you see in your report.”
Being totally unsatisfied with his answer, I pushed further and requested a copy of the input sheet and some formula on which his model works. Both were completely ‘out of bounds’ and I had to simply trust what they were doing was correct without seeing any of the data.
I obviosly had a large problem with that as the data solely pertains to my property (which I think I have a right to know – especially the input sheet) and when I submit the return to both my accountant and ultimately the ATO for assessment, I really have no idea if the numbers are based on fact or guesses.
After explaining all of this to the Principal he condescendingly said that his organisation had never had a problem with the ATO before, and if I did encounter any grief with the ATO he would step in. Once again, as the investor and taxpayer ultimately liable who signs the return, I am still completely in the dark.
To say I was peeved at the end of the conversation was an understatement….apparently the general public who engage these QS’s are not intelligent enough to understand either the input or the analysis processes and hence are kept in the complete dark.
Cheers,
Dazzling
“Go hard or go home”
Sharon,
For the non-residential stuff – yes absolutely – have already done so and locked in further increases for subsequent years.
For the residental stuff – forget it – check out Baloo’s comment above…very realistic and the very reason we now shy away from the stuff…they simply will not pay and are happy to ‘up stumps’, knowing that there are desparate, negatively geared and happy res Landlords out there, just falling over themselves to provide their tenants with brand new everything with extras thrown in at ridiculously low nett rental returns.
We are not prepared to compete with Landlords like that anymore.
Cheers,
Dazzling
“Go hard or go home”
Jan,
Thanks for the suggestion about Simsmetals. It’s something that was tossed around a few weeks ago as a very neat solution to the problem. On initial enquiry Simsmetal said for that amount of weight and the location they were prepared to come and pick it up themselves (the yard is literally around the corner from one of their depots).
We thought we were onto a winner there for a while until I mentioned we were clearing it up as part of settling a new property and the junk was likely to be left there from the Sellers. They said if we didn’t have legal title to the ‘goods’ they were not prepared to touch it and didn’t want to get involved.
I think the best recourse offered so far is just not to settle until it is clear and clean…puts the economic interest back onto the Sellers to do something about their junk.
Thanks for all of the suggestions.
Cheers,
Dazzling
“Go hard or go home”
Avranjes – Good post. Perhaps try your state REI for their farcical, unenforceable “Code of Conduct”, it’ll be a guide at best but the agents are not lawfully bound by any means to follow them.
My father was disappointed a few years back when he successfully bid on a property at auction and after the crowd dissipated and contracts exchanged, the agent didn’t put a sold sticker on the auction board. He said he forgot about it – his loss really I suppose. Dad felt a bit deflated however. Sign stayed up for the next 3 weeks without a sold sticker being slapped across it ?? Who knows.
Yack – I agree with you, they are an eyesore and potential security risk. Definitely detract from the neighbourhood amenity.
Monopoly – Disagree with you totally. You have reduced this fine thread to a drivelling mess, with enough pschobabble and personal attacks on Yack to be laughable. I’ve noticed many times on this website when you disagree with someone, or more specifically if they dare to disagree with you, you smother them with headtwisting rubbish and deviate off into a personal attack until they relent. Yack continued with integrity despite your vehement slandering. IMO you ain’t no sleeping lion.
There have been quite a few posts written about forum members reducing some threads on this website to a slandering match and adding little constructive value, even supported by Steve.
Monopoly, it’s OK to have other forum members question / or heaven forbid disagree with you without you flying off on some psycho babble slandering tizz.
Cheers,
Dazzling
“Go hard or go home”
In general this has been a very positive thread with some good suggestions from all concerned.
Unfortunately I have very little positive to say about my experiences with students. I was once a student renter myself so cut them a bit of slack whenever I could. Finally woke up to myself and realised my objective wasn’t to wet nurse them, but extract a decent return.
My frame of reference changed and since it did, students dropped off the radar as a very poor option.
Compared to Fed. Govt depts and co’s like Telstra and the Commonwealth Bank, students make extremely poor tenants.
See how far you get asking students to sign a binding 10 year lease, cough up all of your property expenses, pay to refurbish the place when they leave to your satisfaction, and leave a 6 month cash bond….no I don’t think so.
Think I’ll leave wiping the noses of students to other time and cash rich investors who can afford to look after them.
Cheers,
Dazzling
“Go hard or go home”
I’ve found in the past the members of REIWA are a very tight knit bunch…in fact they have a very tidy little monopoly going on over here in the West – as alluded to previously.
We decided we didn’t like playing their game, with the standard line trotted out of “I’m sorry, we don’t negotiate on fees. You’ll have to downgrade to a lesser manager if you want that”. Well having tried 4 or 5 different managers over the years, including the current REIWA Prez, we found them all to be incompetent.
There is only one person with your property interests close to their heart – you.
Our group also does not subscribe to this theory of – “Oh I’m too busy finding deals to manage my properties.” Our opinion is if your too busy to look after the deals that are in the bag already, you’re in the wrong game. We found chopping out TV frees up more than enough time to do just about everything one could possibly list down.
We also discovered that with one house, the high fees still didn’t encourage the managers to look after your investment, there simply isn’t enough money to make it worth their while. (8% of $200 p.w. – how much time per week do you really think that will buy you ??). Hence you receive little to no attention.
At the other end of the spectrum, with multiple props and rental income through the roof, the % charged is outrageously too high (8% of a 10 MM p.a. rent roll is way too much, especially if that 10 MM rent is generated from only 10 or 15 properties).
The only solution we found to work is to beat them at their own game. Works especially well with very large Comm and Ind props, as they literally manage themselves, and if they don’t they pay the Landlord to manage them. Rental houses on the other hand…hmmm…lotsa work and whinging tenants.
Cheers,
Dazzling
“Go hard or go home”
I suppose we are all going to do exactly what the older folks amongst us did the last time..[blink]position ourselves to weather the imagined ‘storm’, and then get set for the next ramp up. Kaching kaching…[cigar]
Cheers,
Dazzling
“Go hard or go home”
Jules,
It’s not a big problem.
The property’s greatest attribute will always be the dirt, and more specifically how much of it you’ve got and where it is.
Do what the ‘experts’ do, walk around with a flashlight and a screwdriver…it ain’t too technical
Cheers,
Dazzling
“Go hard or go home”
Paul,
In short, to your questions – yes there is plenty around.
Having just exchanged contracts on a deal two days ago, we are now out of the market for a while whilst we consolidate our position and expand our core of expertise.
I have 16 props left on my research list that are all +CF, given a 100% loan with stamp duty thrown in as well.
I suspect you are looking in the wrong patch…
Cheers,
Dazzling
“Go hard or go home”
Chaps,
That may be an effective solution if you are most like people and have very little to lose.
I thought the objective of property investing was to firstly accumulate wealth and secondly to preserve and protect it.
Going around swinging bats and causing injury or evicting tenants unlawfully is a fantastic and very effective way of undoing many years of wealth creation…
I’d stick to the lawful avenues…in the end you’ll be way ahead.
Cheers,
Dazzling
“Go hard or go home”
Gatsby,
Bought an upmarket IIP last year with a gym as the tenant.
Is doing fine…happy with the purchase.
Due diligence on the tenant, and their financial viability is vital.
Tenant is one of these hardcore gyms, none of this fluffy girly stuff. Lotsa cast iron…came with the property deal, so the wife most of the hardcore iron being pumped in the state.
Tenant been in the business 30yrs, and have them signed up for 10 yrs on our lease….works great. They keep the place immaculate.
Slightly better than Mr and Mrs Low Income in a scrappy house.
Cheers,
Dazzling
“Go hard or go home”
LK,
My philosophy has to always keep the lawyers and solicitors out of it and everything shall be OK.
Before you know it Seller and Buyer will be countersuing each other and slapping caveats on titles over a $ 20 retic widget. At the rate quoted of 270 + GST, the part is worth 4 minutes of lawyer time.
As one of the senators was quoted off ‘GI Jane’, “Can we forget about the peas and concentrate on the steak ?”
Cheers,
Dazzling
“Go hard or go home”
Rob,
What exactly do you mean by ‘struck an agreement’…doesn’t sound too legally binding ??
Cheers,
Dazzling
“Go hard or go home”
Marisa,
We were in the same position as you a couple of years ago. Numbers didn’t stack up after agent fees / CGT etc so we very reluctantly began renting out the holiday house. Hasn’t been an issue for us. Our reluctancy was unfounded.
We didn’t want to pay all the fees and taxes in the sales process, and also missing out on the future growth of the place that we were contemplating selling.
Worked out good in the end.
Cheers,
Dazzling
“Go hard or go home”
Mark76g,
Well…where do I start…our philosophy for the past year and a bit has been to steer clear of RIP’s and so far it’s been marvellous. I can see many years to come of never having to buy a house again.
We sat down and did the whole pros and cons list of both and it won hands down to move towards Comm & Ind.
We don’t support all these ‘phantom’ risks that the RIP proponents continually push, especially the self styled guru’s…usually without having been substantially exposed to the market they are writing off.
In fact, being contrarian investors, we fully support the big bad risk myths about CIP and IIP being perpetuated….
Which one is riskier ?? A national or govt agency tenant on a 10 year +CF lease, with agreed rent reviews (typically CPI or ~ 4% p.a.) with all outgoings including insurances and PM charges paid for, plus 6 months of rent deposited in an account as a bank guarantee plus stated options for further extensions plus a commitment to refurbish with new paint and carpets to the Lessor’s satisfaction….or….Mr and Mrs Low income on a 6 month -CF lease and you cough for everything else with the full weight of most Residential Tenancy Laws stacked against you as Landlords. Gee, ummmm…
Below is a list of some of the small things we are currently enjoying, that were all a burden to us with RIPs;
No council rates
No water rates
No land tax
No PM fees
No renovation costs
No lawnmowing costs
No insurances to pay
No dogs
No students
No domestic disputes
Tenant has a commercial interest to keep your property in pristine conditionWith our strategic focus shift last year, our portfolio is starting to look after us, instead of us continually having to look after the portfolio.
This 70% funding myth I also believed, based on what all the experts continually kept telling me. We have just been granted 80% and I firmly believe this isn’t the lenders limit.
Stay in residential for sure, it’s far better having to wipe your tenants noses every step of the way…leaves more for us to choose from.
Cheers,
Dazzling
“Go hard or go home”
