Forum Replies Created
Arghhhhh, I did a monster reply to you and went to post it nd my internet had dropped DOH!!!!
OK go for it but be open to units/townhouses too as it is a stagnant house market but townhouses are still moving in SEQ at the moment.
3 years ago t/houses were 40k and houses were 80k, people were saving based on these figures. The market moved. Now houses $180k and t/house $120k. Gap widened but t/houses still moving due to affordability of the locals dropping into this market recently.
As your first if you have no kids maybe a townhouse which will give you some cap growth a little quicker at the moment would be a better first home for you.
Good Luck and I have contacts for cheaper legals, just PM me if you like.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
We, my wife and I, usually wait for a while to see some of our properties we have bought off the net. Always get building and pest reports and then you are less likely to just base the purchase on the emotional, “ooh isnt this colour nice”, dreadful type of purchasing I have seen.
One we have in Tassie we still havent seen, had a tenant in place who wore a $25/wk rent hike and signed a 12 month contract straight away. But we have a few so yes for the first 7 we took the time to see all first. Costs for this cannot be offset then until you sell where if it has been tenanted for a while you are just reviewing your existing properties so tax man happier to write off visit that tax year.
Just a thought for you. Same with renos, if you improve a property when you buy it you have to offset at sale time even if you incur the costs now, wait 6 months and it can usually be classed as repairs instead of capital improvements. Helps if you stage or stagger each improvement too. Say paint after 6 months and carpet after 12 etc. Very hard to achieve if you have good tenants that want to stay.
Co-ordinating these upgrades with the times of rent hikes usually makes the process smoother too.
Good Luck.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Everyone has different opinions due to their person experience or fell for an area. You haver only one opinion that really matters, yours. So if you read all of the above, then do a heap of internet research and phonecalls to agents then check council websites as well for whats been approved or coming up in the area(s) then you will make an informed decision rather than a stab in the dark.
Damn that was good………………….just kidding.
Do what feels right, it usually is.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Have you looked south at all?? The kwinana area is working class suburbs with good cheap buying and still reasonable returns.
Orelia parmelia Calista and Medina are the 4 suburbs that make up Kwinana and for 250k you get a 4 bedder and a 2 bedder unit. work out the rents and returns and the railway is extending to Thomas Street as we speak. I have one for sale but cant mention it here or I’ll get zapped so go do some more research first.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
the 11 second rule is just so you cover all costs totally with a 10% return. Ok so you live in Cairns, one of the best places due to infrastructure and developement to do investing in. So the returns of 7.5% or 1.5/1 dont interest you if you are religously following the 11 second rule. Markets change and so likewise should your thinking.
In South east qld I have some townhouses. If you get 100% loan on 95k on one which i bought in December you would laugh and run when it was only getting $95/wk rent. After a 4k reno including carpet upstairs, tiling kitchen and laundry, bathroom exhaust fan and kitchen rangehood, new toilet seat and tap heads, new shower head and painting top to bottom. It now gets $145/wk rent. This is pretty average for a small townhouse and is easy to achieve with a little homework and research. Be realistic that unless as some put it, you go to “woop woop” to get an investment or NZ the 11 second rule for this property cycle is almost dead in Oz.
Good luck.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Just like in rugby the kiwis keep property close to their chests and are very cautious in property deals.
I have dealt with kiwis in 3 deals and they all got the best possible deals they could with lots of haggling and tooing and frowing. Good on em I say but sadly that was all in Oz so im not really helping this cause much..
Good luck with NZ I intend to start deals there in November. Deep breath……. Here goes.
DD[blush2]
Don’t sweat the small stuff,and it’s all small stuff!!
No NO NO!! not a financial planner. this is a euphomism for insurance seller if they are mobile or bank product seller if they are in a bank office. DO NOT believe these people they are only into it for the bank/insurance company. They will suuggest a loan for shares or managed funds, you then have no control as your money dwindles with crazy fees and share fluctuations.
Go to a mortgage broker for a property perspective, and try to get someone who has several of their own properties as well.
Dont be scared about property be determined. Make decisions yourself, afterall it is your money and NOT the banks. Great brokers in here are plentiful and usually 100% on the ball.
Always do your own research as well as what others tell you to get a balanced view.
Good luck, happy hunting.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
If only we had all started so young we wouldnt all be so cynical. This kid is to be admired for what he has achieved where others go out every week on the grog in their youth this kid has saved like a demon and got into property. So not only is he smart, but if he keeps being diligent and hard working I feel he may be retired with 10 books under his belt by 40.
Good on ya mate. Have a go and show the neigh sayers what you are all about.
Make a difference through sharing your info, dont hoard it as some do. Others will then appreciate your efforts and other opportunities will come.
well done.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Wez we bought for cashflow only to find that if it is a CFP property it will get cap gains anyway. So by discounting this extra criteria we didnt need to take time on, we actually still achieved major success through buying cheap entry level properties which are easier to rent, have low vacancy rates and the greatest potential for rises.
Counter that with these properties always being the last affected in a property downturn, doesnt it make sense to buy based on consistently good returns rather than “I think it will have cap gains” then struggle with returns not meeting costs and leaking out of your back pocket. “oh it will go up” says the optimist who bought for cap gains even when Gold Coast has dropped 30% in 12 months. now the mortgage on some properties exceed what some lenders will offer in todays market means that if bought for cashflow first there are less risks.
Give me 5 x 100k houses in what someone said recently “woop woop” with a good cash return against a cbd based unit for 500k with low returns and good $$ in good times for cap growth.
We have won in this last boom with our buy low keep your head into entry level properties attitude without much recourse on cap gains.
It is good to get cap gains but if you havent done your maths right on the IP first then its all a waste as your cashflow determines how well you sleep at night in a quieting market.
Look for opportunities everywhere but to discount a fibro house in a cheaper suburb over a highrise with huge costs is just madness. Make informed decisions not wild speculations. Cap gains may or may not come quickly with those cheapies, but they always grow well over time.
Mt Druitt suburb of Blackett. House there 3 years ago was cashflow +ve at a 90k purchase and now would sell for $270k without blinking.so is now 1/1 ratio or 5% where the same house would have been 3/1 or 15% return if bought 3 years ago.
It is still not the most safe suburb for crime but with costs of property and rents rising it is weeding out some of the “cheap seats” attitude some had towards the place.
There is currently an oversupply in that area for units and they have several high rise developements happening south of the railway station which will not get good growth until they absorb these properties into the mix. Give it 2 years then look here for good buying and good demands.
All im trying to say is stay open to cashflow and cap gains will come.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Jaffa how would you like to have a 2 way sat link with same features for $77/month. New govt legislation requiring all who want it to have broadband means they will subsidise the cost for remote localities so get onto
Greg Cowie of Newsat on 0412 243 572 or email him on
[email protected] for all the details.I was looking at it for Coffs Harbour coz Telstra said they couldnt guive me broadband 4klms from city centre. I got onto local MP after they finall said no 4 1/2 months after me applying, and with MP interest, they did it in 2 weeks. The bastards. Im now on adsl 512k and feeling im not at the end of the world anymore.
Go ask this guy he seemed pretty clued in when I met him at a telco conference in coffs 2 months ago. It cant hurt to try.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
All i do is go to the freebie seminars as I find even they have the odd tip or trick or website they promote that gives me extra insight into this changing beast the property market.
Dont want to pay, fine, dont pay, but let people have a choice to do what they want with their moeny and not get harrassed by you about those choices.
Boring if we all did the same, thought the same and ended up on the govt handout queue wondering how it happened. Make your choices good ones and even if you have the odd bad seminar and get nothing from it. Dolf siad hi to my wife and I at a seminar in brizzy because my wife said hi to him in a bookstore the night before. We have 20 properties and had 23 then, so when mentioned by Dolf, we got very popular very quickly at the intermission. So there was a slant on a ‘paid’ seminar that gave us dividends of clients for our property searching as well as Dolf’s insights.
Never say no, ask why not. Then be open to what responses you get. You may be surprised by what you do get out of it.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
I have a 5 bedroom 2 bathroom with spa house in Hassall Grove for sale for $360k it has dual driveways and a good yard in a quiet street. I have moved and this was my ppor before that. Rental would only be $270-300/wk so would be negative as is. House was completely rewired with electrical and data points at the back as I worked from home. 3 x split system air conditioners and I painted the last 2 rooms at the back last weekend. Covered entertainment with a real wood BBQ. Even has a cubby house with curtains and lino for the kids.
Yes I did a reno on my old house. Touch ups on the cornices and watered the garden. Was about to mow when it rained DOH!!!
Any interest let me know. Saw Penrith beat the Eels on saturday night, was bliss to see a game live again.
Happy hunting.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
To be really successful in helping others as a birddog I would suggest you do the property thing yourself a few times to go through all the hassles and dramas some deal cause you so you can really relate successfully to your clients and their needs.
Just a thought.
Hi Mini, love ya.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
HI Kristine, hope you are totally motivated by the gang in here, I always get a buzz from replies I read on how we all think positively and yet slightly different from each other.
My start was buying a dud of a negatively geared unit in a develpopement in Blacktown sydney. It was $172k off the plan and took 18 months to build, we got a tenant straight away and patted ourselves on the back. Then the body corp bills, cleaning bills, bigger mortgage than the rent could cover and general feel of the place was slipping inot the “oh oh.” area.
We stuck with this financial drain for 12 months, in this time the Government implemebted the 50%discount if you had held a property for >12 months rule for cap gains. We stuck it out, sold it at 14 months and cleared $60k profit. Awesome return but all by accident. This paid off the last of our PPOR home loan. The champaigne popped and we were in the clear.
Itchy feet and palms got us looking on the internet again for an investment property, this time one that wouldnt cost us our shirts to keep going. Wife found one in Regents Park for $95k and screamed at me to get in there and have a look. I asked ” what, no roof, termites, whats wrong with it?” We looked closer at the magic screen of life(internet property pages)and found it wasnt in Sydney at all, rather that then to us hidden and mysterious land of Qld, due to a misprint on the website. This was Dec 2001. I got the last Qantas flight on 18th dec with a seat and 2 nights accomodation in brizzy, Avis’ last commodore on the lot and raced to see this for a 6pm appointment with the agent. It was a dump with bad drainage, in need of a retaining wall$$$ and tenant wanted a big shed for his truck$$$. Needless to say I was less than confident about this little gem that looked so good in the piccies.
Out at the car I said no thanks and then asked the agent what we could see the next day as it was getting dark. He said “sorry” it was his last showing before holidays with the family leaving that night. He gave me the details of another agent in less ceubrious suburbs of Crestmead/Marsden/Kingston which were Qld’s Mount Druitt with all the pre conceived bad connotations. At 10 am the next morning, i met Peter Coleman. Then an agent for Raine and Horme Marsden. He turned up on a motor bike, took off his helmet to reveal a marajuana leaf earring and smiled with his gold capped teeth to give me quite a scary first impression.
He showerd me three houses that morning, the last(as usual) the one he was really trying to sell. I had a budget totalling $170k to spend and this house I negotiated for $84,500.00. The pest report(always get one no matter what)showed termites in a tree at the back of the house so we immediately needed a termite barrier which cost $1320.00. This we took straight off the purchase price which the vendor accepted grudgingly. So we had a house for $83,300 with a rent of then $145.00/wk.
We didnt sit on it long as we had funds in our itchy palms again. My wife and I with our infant daughter hopped on a flight in Jan and went back to see Peter who proved to be a relaxed, calm and thoroghly professional agent despite his appearance. He showed us some 2 bedroom townhouses. One listed for $47k which we negotiated and got for $40k wow!!! and while in his office he showed us one in the next block that needed a reno and was listed for $44k. I asked what he thought they would accept, Peter replied they had knocked back $38k 2 weeks earlier but the lady was willing to sell. Just as a test I said offer her $34k. He was frowning at me when he made that call but to both our surprise she accepted. So with a $6k reno of tiles throughout the ground floor, paint, back courtyard fence and some minor plumbing fixups, we got $100 rent and $110 rent respectively. So with legals etc the mortgage on all three of these was $171k with a return of $355/wk. This far outweighed the $172k/$220/wk for the blacktown unit and without the exhorbitant BC/rates and cost of the Sydney property. We were on our way. Mostly by mistakes on a webpage as we had never looked at Qld before, and now have 15 there, 3 in tassie and 2 in Perth. It is now Sept 2004 and we have moved into our dream house in Coffs Harbour NSW with water views from this desk I’m writing on. This was the worst financial decision for investing as you cannot claim a $500k mortgage on your PPOR. We are now selling some of our properties to kill most of this mortgage and will have a core 10 properties and this great house at the end of this financial year.
Where we go from here , no one knows but with what we both now know, the sky is the limit.
Kristine, hope I havent bored you too much but I earnestly wish you all the best with your investing and if I can help PM me from here and i’ll gladly chat with you.
DD [buz2]
Don’t sweat the small stuff,and it’s all small stuff!!
Firstly Patrick. Call me, you need a confidence injection and a big smile drawn on your face dude.
Secondly Hi Shirl, good on you for being proactive and seeking several second opinions. My god you will get them here. All those cautious dont do it types will never get the great rewards of actually putting one foot in front of the other.
No problem is too big, no obstacle is one that is too high to get over(or around) and nothing will stop you unless you let it.
The problem with no equity means higher interest rates for a period or finding cash for the deposit. AND THATS ALL!!!.
So with most lodoc loans these days you have to pay a slightly higher rate for a period then it reverts back to the normal rate. Rams is 2 years and others are one year but the best I have found is the Suncorp one which reverts to normal rates after only 6 months. So there is your first problem solved. Go get a lodoc with Suncorp and the higher interest is minimal.
Secondly I cannot magically make a deposit appear thats up to you. So go get em girl and take no prisoners. Lodocs are easy for self employed. I am and have 19 props in 3 years plus my home.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Im a yes for Brizzy too or if Im on baby duty (4&2) my wife will attend as we are a great team and do all of our investing together.
Sonja, babysitters whereforartthou babysitters!!!!!! We have recently moved to Coffs, still trying to get someone for us to have those occasional grown up evenings too.
Seminar for Brizzy please.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
hi Cheeky. Well I touched on this subject last year when one of my real estate guys in Ipswich took me and 3 of my investors to a questionable lunch at a retirement home. We ate what the “inmates’ate. I was sad to see that the tastless food matched the tastless attitude of the homes managers.
When you buy into one of these homes that take 78% of the poor retirees pension to supply a roof and food to these good citizens you do get a cashflow positive investment but at what moral cost. These people who have worked for thier whole lives have little more to look forward to than scrabble and a 4pm dinner I wouldnt feed my cat. All are pokey and lifeless units and the people do not look at all happy with thier lot in life.
I and my investors chatted about this at a hamburger joint later that afternoon, you arent buying real estate you are buying a management system. As the laws are being changed and tightened in this industry, what seems fair and rosy now as an investment might be a non sellable bugbear in the future.For me a standard vanilla type “rent a box” home or townhouse fits my portfolio a lot better.
Karma can be a killer.DD
Don’t sweat the small stuff,and it’s all small stuff!!
Celivia we did what you now suggest is the best way to go. We bought an off the plan unit in Blacktown while still owing $100k on our own house. Had a few payouts from wife being retrenched and father passing away so we were down to $50k. As the unit was negative geared and we had our first child and had lost my wifes income(oops) it was a strain to have to cover the mortgage shortfall and then the body corp payments as well. We waited until the 12 months was up and then sold the unit for $60k profit. This paid off our house which we then mortgaged for IP’s.
Now 3 years later we have 20 houses, ours plus 19IP’s. So dont be afraid of doing what you feel is right, because we got ahead so much quicker by giving it a go.Happy investing.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Zen dude read hi read lo then off you go. There are heaps of opportunities available if you actually are serious and want to get ahead. Some are cashflow based some are capital based and those rare few that cover both. May last year I saw that the positive property ratios were drying up in my “pet” areas so I bought 6 houses.
By the time I settled 6 weeks later they had gone up 223k and they were all positive. Now because im a greedy bugger some are slightly negative but I have more properties by peeling out the cream as it appears and by going again.
Those same 6 properties Ill be lucky to get 80k growth in a year from now so it all depends what you want. I for one am in a consolidation phase as I have just purchased my dream home. This has severely hampered my empire building and will continue to do so until at least September.
We are all different and all Im saying is that we should always look out for those elusive opportunities and be flexible to change as the market does.
Good luck
DD
Don’t sweat the small stuff,and it’s all small stuff!!
Cool DaMan, always good to foster discussion although this was not the way you intended this string to go. I appologise to you for any waylaying of your questions so lets look seriously. You have cash now in a softer market. All indications are that the booom is gone but for you a new buyer this is a good thing.
Where the rental ratio of 1.5/1 or $1.50 rent for every $1000 invested was unattainable 6 months ago, whch gives you 7.5% return by the way, is now occasionally to be found with some creativity. My example was 2 x townhouse bought for $95k each in december,I renovated 1 totally in a week where I painted and co-ordinated services that week, the rent went from $95/week(1/1) ratio or 5%, to $145/week or roughly 1.5/1 7.5%. The reno cost me about $3k in total which is either immediately deductable or depreciable over time. Nett cost of reno due to tax benefits is practically zero and I’m now getting a reasonable return.
Secondlty the neigh sayers say no cap gains if good return. Well its now worth $120k so you do the maths. So if that were you, you would now have another $20k + if sold to add to your deposit. So that is my opinion only.
Think outside the square most live in. You get ahead that way.
Baloo sorry if I misread your replies, it just seemed to encourage a leave it alone attitude which doesn’t really help Da Man get ahead.
Kojo I have positive properties almost all the time for sale as Im a spotter. Maybe you should PM me.
Hope this helps.
DD
Don’t sweat the small stuff,and it’s all small stuff!!
