Forum Replies Created
Never undervalue your own gut feeling
Look for the difference in applying your skills to each properties percieved problem and obtaining a happy outcome
Listen only to those that have done it and done it well.As 95% of all so called “investors” never have more than one property, why listen to their limited and usually not the best experience. That goes for your solicitor or accountant too, if they dont have a property portfolio, it is definitely time to move on.
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!buying with a good tenant in place is also good as they tend to want to avoid the hassle of moving so a reasonable rent hike for minor cosmetic things is on the cards.
I use managers because they are nice to deal with, totally proactive and if maintainance is needed our IPPY agent gets quotes before calling to save me time and hassle. Managed one IP for 6 months and the tenant was always late and the measly $10 we saved weekly wasnt worth the hassle of STD phone charges to constantly chase payment. Got an agent to manage it and she took no prisoners. 4 Months later on her recommendation we kicked them out.
She did the court appearances and it was like gliding on a glass lake, very smooth. So with several properties in 3 states and different areas as well it is worth our while to get it managed. Sure some have been vacant but they dont usually take long to fill.
advertise yourself if you must, but I would include movie tickets and a bottle of wine on a signed contract after references are checked.
Good Luck whatever you do. The more you have the less you worry about the odd vacancy, as percentage wise it is less with 5 IP’s(20%) as it is with 1(100%).
Have fun
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!Don & Liz and Baloo, great to hear you have had the foresight to rent while accumulating weath with IP’s. This is what I recommend to some people and it really makes sense. A client from Sydney was paying $460 for a unit in Abbotsford on the water that was worth $800k.
To buy this would be $1200/wk mortgage so the diff between owning(mortgage) or renting(haha subsidized) is a whopping $740/wk. Tha is a whole chunk of servicability to help get properties while still renting.
Eventually you could still use the FHOG and get a monster deposit for your “I want to own it” PPOR in a few years by selling off some of your IP’s or just leveraging equity off them to avoid cap gains.
Good work guys and…………….what was this topic again???
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!a simple formula is the rent over the purchase price. Say $100k house has $100 rent a week. This is 100/100 which is 1 to 1 or 5% return.
The same $100k house getting $150/wk rent is 1.5/1 or 7.5%
Again the $100k property getting $180/wk is 9% and so on. Thats as simple as I look at property. Get this and your council/water rates and any body corp fees and know your management rates and a projection of maintainance and you should be fine.
We allow $1000/property/yr for maintainance as an average. If there are lifts/pools/tenniscourts your costs double as a rule so be cautious, try to buy houses for land content and units/townhouse for cashflow a bit better and there is your start.
Good Luck
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Tony, to say new gets you the best rent return is bunk. You buy a new house in say Deebing Heights for $395k new, your rent will be $285-295/wk tops. Thats less than 5 % so you really buy a neg geared property and pray the higher depreciation on a new place softens the blow when you come to tax time.
Personally a 14 yo 2 bedroom townhouse that cost $95K 14 months ago with a $5k reno that gets me $150/wk rent is a much better prospect. Immediately Im on 7.5% gross and I also get a depreciation schedule on everything I buy and get $2-3k a year which percentage wise isnt too shabby either. It also covers rates and body corp if you buy right as well.
I have just repeated the process for one of my clients where, yes me, I did his reno and the rent went from $130/wk to $160/wk making his $107k purchase price look quite nice. And with new carpets/tiles/vanity/curtains/paint to depreciate hes looking good at tax time too. This property with $160rent/$107k purchase is 50 cents off 7.5% gross so dont tell me you get the best deals for new, and that renos are mad either.
bnag1, make your own choices, but informed ones after listening to several opinions first in here. We are all different so find the median on what you read and be confident with what you choose.
Im also a buyers agent but its Tony that got this reply, sorry Tony.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Goodnas crime is still high. Ipswich is $185k buys $185/wk rent soi one for one which is 5% return……..not good!! Beenliegh good and growing.
Logan Central area, hot and getting hotter.
Inala has too many weatherboard houses and no new infrastructure.
Teviot Downs I havent heard of Please please please tell us more.DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Guess what guys, to be a qualified and active financial planner you have to be associated with a banking institution or an insurance company. This means that the term independant financial advice is a farce. I should know, Im a qualified finacial planner and feel the industry is too structured to be effective in actually helping people to better outcomes.
See three financial advisors and guess what, you get the recommendation that is allowed for by their bean counters known as PARA Planners within a tight scope of thier own products and services in all three cases. If you are fortunate to get actual advice that isnt a rubber stamp of insurer X or bank Y get back here and post who you got it from and Id be the first to congratulate the guy/gal for having the gonads big enough to be honest with you.
Sorry to be so glum but one of my investors a young guy from Parramatta was gobsmacked by a bank X guy who said 18 months ago dont buy property its too risky, told this 21 yo to take out a loan to buy shares and invest in his(surprise surprise) managed fund.
I’m so glad to say that without my input on his decision, he decided to buy a townhouse in Cairns instead, which has gone from $95k to $124k in value and hes looking to go again. Time before last I saw him he told me I had changed his life forever by just showing him options which he then had the gonads to follow up on.
He is now the manager of the store he only worked in before and is a much happier guy as well.
All I’m saying is with the right knowledge, decisions for the better are easier to make, so dont be disolusioned with the lack of Fin planners in Alice Springs, ask yourself why its the case there.You may be surprised to realise that in smaller comunities the commisions for fin planning are scarce and its not financially viable for them to operate there unless they are subsidised by AMP or colonial or tower or Mac Bank or whoever.
Maybe other forumites are a better source of info and suggestions that may work for you, albeit with a property slant thrown in just for good measure.
Call me a sceptic, sure, but dont hold the average financial planners up as some kind of demigods. And for Gods sake make sure they are accedited under the ASIC(australia wide)PS146 and PS164 certification structure if you do use them as this is the safest way to cover your butt should things go slightly astray.
Good luck and sorry to harp on, when Im tired(1.30am here) I get a little too synical.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Whats your PPOR worth? If you can see a market with a high cap gains potential or something off the plan in a good location with demand high, then if your PPOR is worth $500k and you owe $235k then you have $165k for deposits. So if you just get standard 80% loans this equates to a total investment portfolio of $835k
So get 7 x $100k investments that are neutral or positive cashflow plus costs just off your PPOR. With 7.5% return the banks will love you, then sell your dog of a first investment (negative little beast) and all of the profit goes off your PPOR as non deductible or bad debt component.
Do this and if you do it right in 2 years you have 7 x 60k profit from your small investments so sell 2 pay off your ppor bad debt then with 5 left use this as your base to grow. With increased rents 2 years later as well, these smaller IP’s will then be positive for you and things will be rosy in time for the kids.
Just an idea. I have them all the time.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Hi Melbear, Waterford west is a nice suburb just south of Kingston and slightly to the left. The main road is Kingston Road and this intersects with Loganlea road. There is a small shopping centre on the right heading south with a supermarket, fruit/veg, cafes hardware and a chicken takeaway place(henny penny?). Accross the road is a large tavern that offers cheap meals to patrons. There is a paint shop and service station all on the left at the same lights.
Turn left and you have several sets of small factory units with hobby shops, 2nd hand dealers, 5 real estates, hairdressers, chinese restaurants etc. This Loganlea road has Alora street one street back which is predominantly large 60+ unit/townhouse complexes. These are slightly upmarket with onsite managers. On the other side of the street are single dwellings that back onto the playing field of the local primary school. About a klm down the road is a uni campus and a strategically placed maccas just before the gold coast freeway onramp. I usually eat there before hitting the motorway home south to Coffs after a reno and dropping the keys back to Ray White Waterford who do all of my management there and in Kingston for me.
For rental management deal with Kerri and Kylie on 07 3805 1506 and the sales office is next door. Ask for Lorna and get great service.07 32009088 is the sales number.
Tell em Dave T sent you.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Guys the best way to get cash positive props in SEQ is to buy a townhouse in an area where the rents are quite higher for freshly renod properties, isolate the cost of reno and then get on with it. One of my clients bought for $107k a 2 bed townhouse and renod for $6k. The rent went from $125/wk to $160/wk in a week of reno.
So with 107k/$160.00 rent you are 50c off 7.5% gross. In 6 months put the rent up $5.00/wk and bingo on the money. This is one example of which there are many. the API mag is doing a reno special this month coming. The reno kings and some guy called DD gave info for the article.
Do the reno, get better cashflow. Its not too hard if I can do it.
DD[build]
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!I try to help people and if people are sceptical they can easily not deal with me or others. With so many people trying to get a “good deal” some pick your brains, set up viewings with your contacts and then after working with them for a week they say”hey I can do this myself now……Seeya”. Where are the ethics then when I for one have had this sadly happen a few times when there are others who are crying out for help with getting deals and holding their hands through what to some is a quite daunting process.
So ok I have had people do the dirty on me and Im not happy about it. So do most service based industries. Not to worry, cop the odd one on the chin and move on. Thats cool with me but our hard work and efforts get so much negative press in here sometimes its easy to discern who will be successful by how they approach life and some discussions.
Always check out who you are dealing with, their track record, and please make sure they have runs on the board themselves.
Mini, Castledreamer, and Westan have all had good raps from several people so always be happy and lets all get out there and do something rather than bury ourselves in a discussion where the same effort in research could net you a nice IP.
Have fun, enjoy the sun, be creative and for Gods sake make money!!!!
DD[biggrin]
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Tassie too is an anomaly where fees are concerned. Unlike most other states they charge 2 weeks plus GST for letting which is legal theft.
The charge 2.5% for arranging maintainance work, and the total management fee is 8.5% for one and 8.35% for 2 or more. Big deal!!!
Well I recently nailed a 7.7% inclusive management for the first time ever in Launceston for my clients so Im a very happy man. Postage and petties $3.30 per statement.
WA for me died as an investment location when I first discovered all the rediculous and unnecessary costs of managing property there. The world isnt that big that a state can think its Gods gift and still atract investors reguarly.
For me that buying trip was 3 days and about 8 fees too long. So we had 2 of which we have just sold one there. Not intending to buy more until the agents wake up they are part of a great country and not an island state with noone to compare against.
My focus is still Qld and Tassie and if people want to buy in WA good luck to them……for now.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Queenstowner, give me a call I may be able to help.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Thats right Brenda, rea;ising profit at a sale is good for the soul and will actually clear the decks for forward thinking again.
The two we sold in Bundamba recently were $109k to $165k sell and $120k buy to $185K sell so Im with you. The one that sold for $185k had a major storm leak into the bathroom in the week that followed the sale and cost a whopping $5k to rectify for the new owner. So we dodged a bullet on that one and we didnt even know there was a problem.
Sometimes you get lucky I suppose.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Thanks PK will be doing the renos on these two in June/July this year when leases are up. Usual 5K then $30.00/wk rent rise.
Chat soon
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!LMI is loan mortgage Insurance. you pay this on behalf of your lender to an insurer to cover them if you default.
LVR is loan to value ratio which is the percentage of equity you hold in the properties.
Hope this helps
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!All granted Anubis, but I think I have had enough runs on the board to have an opinion. Part of our recent strategy was to buy a house in Coffs 250mtrs from the beach. If thats not enjoying it now, please let me know.
Its tough living between the Novotel and the Anuka Beach resorts!! We even use the Anuka room service menu and walk and pick it up occasionally.
We buy our own Moet though.[biggrin]I meant tight with the investments and cashflow, not referring to lifestyle. I think we have that covered. Sorry if I was unclear.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Ipswich Rentals and Sales Ph: 07 3202 4042 Fax 07 3202 4048
Angie 0438 641 415, Liz, 0411 233 317These guys are good, sorry to not have gotten back to you earlier.
DD (Dave T.)
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Thanks for that clarification Michael, I have been off doing renos and not watching the posts as well as I usually do. Yeah it is a personal choice and the best any of us can do is to make informed decisions with the best knowledge we can muster.
This forum always lets me fine tune my thinking by reading posts from others so thanks Michael, nicely put.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Rents are the slowest moving in the country south of Perth anyway. There is so much available land that house prices wont feel too much of a squeeze for some time.
With stagnant rents, rediculous agent fees and high maintainance for older properties, we have just sold one 4 bedder in Orelia and are using the funds to paydown a qld ip instead.
Bought it for $91k sold it for $149k so yeah cashing in was ok as there was never one rent increase in the 20 months we have owned it.
We have also bought 2 more townhouses in Qld Dec/Jan so thats where most of the focus is now.
Good luck with your sales and happy investing.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!
