Westan, always the sceptic. OK so you wouldnt, but neither would I based on location and being solely reliant on one industry in the area.

Yorker is confident about it so thats great. If we were all as stringent as you I personally wouldnt have a house overlooking the water in Coffs Harbour, three years after starting investing.

Ok so I am less concerned with 48 weeks or 52 as I have had only one house in IPswich that took 4 months to rent. Hasnt missed a beat for a year now so on average based on our current 20 IP’s and our house that aint bad buddy.

Sorry to get your back up but boy, everytime I have dealt with Kiwis you have always been the toughest to deal with from both sides of the fence. That means you are harder to bluff, and less likely to sell me a bargain. (Thats a compliment in case you missed it)

I love the fact that everyone in here thinks and does things slightly differently so lets agree to disagree on figures here, as my criteria isnt devised by using a HB pencil and triplicate carbon. I am usually not thinking three steps ahead, but rather thinking how I can swing this one or that one around to be positive.

So interest rates go up,yawn, so top end of market takes a plunge, yawn, so lets still be sharing our opinions in here in 5 years time as freely and subjectively as we are now.

Great to see different perspectives as it keeps us all on our toes.

DD[bigeyes]

Don’t sweat the small stuff,and it’s all small stuff!!

The west coast of tassie, deals aplenty, agents none.

Not one agent has an office on the west coast, most manage to drive from Burnie or Devonport weekly for listings. There is not enough business to sustain an agent so what does this tell you??

Stay out, stay away and for those of you that wish to waste time and money in a 1 1/2 horse town like Rosebury, go ahead, means that the nicer suburbs and properties are left for us.

People may retire there but its those hard on their luck so dont expect massive rent rises, or awesome capital growth.

For the wombat that says $100/wk from a $50k house isnt positive. Poppycock!!!!! 100/50 gives you 2 to 1 ratio or 10%. Even if you have one of the awful local agents that try to screw you for 10% management rate you still get a gross 9%. Interest at 7.2% leaves you 1.8% for rates, and maintainance which is minimal in most cases.

I think what you were trying to say is that you personally wont get much out of it after costs. This is true, but it wont cost you anything either. Maybe you need to rework your sums a little.

DD[biggrin]

Don’t sweat the small stuff,and it’s all small stuff!!

A good idea is dual occupancy, buy a house that can earn you rent now and get a relocatable for the back. Dont skimp on the job, steel posts with the screw top, full height for options later and then get it tenanted asap. You pay a bit more in rates but 2 incomes in one title awesome.

Problem is the site has to be big enough to get the approval for the back. Allow for things like sloping blocks near river have a limit as to how far you can build etc.Research then act.

Happy hunting.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

Always, I can see where you are coming from. In a house we had paid off and with 23 properties all our funds were keeping us afloat rather comfortably, when we bought our ‘dream home’ this year it has nearly crippled us.

The house we left in Sydney hasnt sold, our mortgage here is 1.2 mil we are now trying to sell 5 houses to kill 1/2 of that.

Sometimes the harsh reality is that you make major mistakes and then have to be ruthless to fix it. Try selling the 2 most negative and keep the third. One set of rates, body corp fees and maintainance will probably get you over the line. As rents go up too, look to the one that has the greatest potential for rent increases with small renos too. So you dont have to pay stamp duty and cap gains on the three sales, maybe next time you actually save 20% before getting into new ip’s.

That would mean that any growth can be used straight away. We bought one and due to location got a 65% lvr loan so we had to throw in a wopping $35k plus costs. 3 months later we got a val of $120k with a new lender got 76%. So we peeled 26k out 3 months after setting it up.

Think hard before borrowing more than any property is worth, and if you borrow 80% you always have a buffer.

Good luck, hope this helps.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

Wow well done, if I at 22 knew how to do this property stuff, I would, as most of us would have been much better off by now.
What state are you in as that determines the tax law applicable to you. Definitely agree with Simon goto a broker not a bank as they often try and steer you away from property into managed funds etc for your money.

Good to see you are proactive and on this, one of the best websites around. Read extensively, analize well, but make decisions and move forward. A lot of first time buyers suffer from analysis paralysis of what do we do when we have it is all ready to go. Most learn as they go and no house is perfect, so go for it and have fun.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

OK lets turn this wheel a little bit. Tassie main cities of Launceston Hobart Devonport and Burnie are all going ahead quite nicely. I have a “stir the pot” option for you, forget there and look tassie.

Just a thought on why go there with no cap gains for 4 years (another poster said this) where the Australian ‘south island’ hehe is still a happy land for the right deals.

Look outside the Kalgoolie you think you know and look qld and tassie for other options before committing.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

Ok the way I work out return is a little different. Rent is 90/purchase of 35 which is 2.5714 to 1 ratio. Given that 1/1 is equal to 5% return($1 dollar for every thousand invested)and that 1.5 to 1 is 7.5% by the same criteria, this property is approximately 12.5% gross return. Not too bad.

So with you having an approximate mortgage of 7% and allowing another 1 % to cover management fees you are 5% return clear of basic costs. Maintainance and rates are the only other considerations so this is quite a nice toy to have in your portfolio.

Good Luck with it.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

My sister and her husband just went thru this as well. One solicitor in 6 said yes and they wanted the loan asap so they got it done.

This was in Port Macquarie nsw. They were each buying an IP in individual names with a third putting up the deposits in joint names.

This solicitor did it for free and was very helpful. I’m glad they were sorted out but it did seem a bit weird to me. They were using a small financier through a broker.

I only use lowdoc loans and have never come across this. But it is out there.

Just another little hurdle when you are under pressure already I reckon.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

Nab after that trading scandal last year where they lost millions, tightened their lending. Homeside finance, the renamed Bank of NZ they own, had a new product last year which was an 80%lvr low doc loan. I used this to purchase two townhouses putting up a third security as deposits. Loan got approved then a month later got a letter from them stating that due to “unforseen circumstances” the low doc loans were all being deemed to be normal loans from then on.(they cancelled lowdocs) and if i wanted to do anything on them I would have to apply under normal loan conditions which may risk the status of this existing loan.

So I am not happy with the NAB/homeside and always have heard disturbing things regarding service and helpfulness about them in the past. So this was my first and last foray into dealing with them as flexibility is the main reason I get loans for property.

Lodocs are great and I now use one lender whos standard loan is 76%lvr IO lodoc loans. Sure this is less borrowing but as Kay says, a lower LVR is good.

Good luck with the banks, they all have their foibles.

DD

Don’t sweat the small stuff,and it’s all small stuff!!

<I have edited the sales pitch DD – Derek>

As prices have jumped and rents take forever to catch up, an IP bought last may for $100k returning $180/wk is nice but the same thing for $195k today returniing $180/wk is a dog. So people are trying to find townhouses and units which are lower in entry level $$ in the same areas and where small renos make them as close to cashflow + as is possible right now. Country NSW was a poss until stupid idiots put exit tax on.

Some qld sites still have reasonable returns, finding these properties however is getting harder and harder. Dont be scared, be determined, because as we are having a slow down prices in some areas are correcting as much as $80-100k in sydney and $20-40k in qld. This makes now nice for buyers to get something reasonable. Go out and seek the holy grail of cashflow and be determined. It is out there somewhere.

DD

Don’t sweat the small stuff,and it’s all small stuff!!