Forum Replies Created
Shahabr hi, Im finding great deals all the time for my clients and sub-$200k. $140k 2 bedder with $200/wk rent, $150k 2 bed unit in a block of 8 in bundy with 3 others owned by my clients, 3 bedroom house in tassie for $156k with $195/wk rent.
All these sorts of deals are readily available.
This is what I do.
Good luck in your search, Happy Hunting!!!
DD
If you have available under bench space I would suggest it was a great idea, same as a clothes dryer. Unfortunately tenants have a propensity for breakups and one partner left one of my rentals recently with a rangehood and a dryer. Still chasing him.
My advice would be to bolt them down from now on.
A small unit with a dishwasher and an air-con is ideal. So is the extra rent it would achieve.
Good Luck
DD
One of my clients has bought a unit in the same street I own 4. He has been away working so I asked him what his rent is. He tells me $210/wk. Mine that are identical to his are getting $235 x 3 and $240 x 1. So $100/mth hes duding himself by not reviewing the rent regularly. Keep on top of it.
Nathan is on the money with his analogy as well. Like your tenants fine, but its a business and its your business. A lot of agents don't review rent or suggest rental hikes, as they actually have to deal with irate tenants from time to time. Isn't that exactly why we pay them in the first place.
Do a review on places for rent in your investment area and jot down all of the rents for similar properties. Quietly phone other agents and keep on top of your own nestegg. Its so hard to accumulate wealth and so easy to loose sight of all of the small stuff.
Good Luck.
DD
Madness to do it now as you wont get a red cent from the tax man.
Once you have rented it out for over a month then do any work you need and its classed as new capital improvements and depreciable on your tax. A good trick with air cons is to get one invoice for the unit and another for installation and labour. Installation and labour can be claimed 100% in the year you do the work and the unit cost if under $1000 can usually be written off immediately as well as it would be classed as being in a low cost pool for depreciation purposes..
Any major improvements or capital expendature is claimable on depreciation, but only over 40 years and at only 2.5%/yr.
Hope this helps.
DD
If I had something that would return 10% II would try and duplicate that as a success story. $160 purchase and $320/wk rent is a flat 10% so depending on strat and management costs you are sounding like it is a winner. Get a val, dip into equity and go again.
Nothing but fear holding you back.
Happy Hunting
DD
Ok so if you grab cash out of your offset $$ the real question is will it make you better off or worse off??
As the funds are for investment purposes out of your LOC, it is then deductible for the interest on that money.
You are pulling out deposit plus costs so estimate about 25% of the value of any new property you buy.
510income /475 cost means its about 5.2% return. This in itself would deter me from doing it as you are about $160/wk in your pocket to start with. After this there are holding costs of rental managers, rates and maintenance, so be cautious buying smething at this price level. The property sounds like it needs work so where is that funding coming from? Family members are emotional partners not business partners and if their personal circumstances change they will want out, or not to do essential repairs down the line. It's only a suggestion but don't do business with family.
There is so much more I could suggest, but lets see if you get any other opinions and then make up you own mind on what sits better with you. Either way goodluck.
DD
Carna20, what you should do is ask your bank which 3 agents are currently on their panel of valuers. If you then get a valuation from any of those valuers, this can be applied to your property for up to 6 months should you wish to access equity from it. Not only a good idea to find out from the bank as whatever you pay for a valuation now is saved when approaching the bank within the 6 months.
Hope that helps.
DD
Ive heard someone where I live had a similar hassle. They paid out a phone contract, have a $140 default a year later when applying for a loan and would be charged $1500 to clear it. What a joke.
Im surprised at this sort of madness creeping into our lives, in some cases detering young couples from getting ahead.
DD
oo3c, Thanks for that, she was 35 and I was 45 when we split. The kids are 7&9 as well.
DD
Richard again has nailed it as most valuers are coming in light on vals, im pretty sure you would get a rude no thanks from your bank.
I had a deal recently where you could buy a 2 bed unit for $140k with a $200/wk rent return. Not as Amazing as Richards client but available last week. Block of 10 reasonable holding costs.
They are out there. You just need to get the earlybird phonecalls from agents that like you give occasionally. Talk to agents, not just look at the web. Make an impression by chatting to them. Its amazing what listening to people can sometimes achieve.
Happy Hunting
DD
If you want cashflow and growth immediately you really are a dreamer. Units by nature incur body corp fees. To avoid these you need to find a duplex 2 bedder and hope the other half is the guy that owns it so there is no body corp fees. apart from that avoid pools, tennis courts, and onsite managers like the plague and you can find reasonable body corp fees.
Does it have to be the gold coast?? Is this a work related location or can you move?? Would something in the Logan area give you a 45 minute bearable trip to the GC as well as a 25 minute drive to the brizzy cbd. Many in this area have a $1200/yr or less body corp fee which in this day and age is great.
So if you want it as an investment why stay local? Look further afield for greater pricing and holding cost flexibility. Cairns or Townsville, maybe Bundy all have good deals available right now.
Its all hard to start with, but the options you have are only limited by your thinking.
Good Luck.
DD
I organise renos for clients and have found that when Im in Tassie, the local bunnings has a measure and quote service. The builder I use down there that does the full rip out and replace for me gets them to deliver on site and then he and his offsider do all the hard stuff in 2 days.
The only thing is you need the walls repaired between the rip out and the new install so Im usually up till midnight doing the walls so its dry for the next morning. The only delay is if the plumber isnt on time to disconnect the first morning and then re-connect the next afternoon for the sink and taps.
Just another option for you.
I always advise my clients to cross out the "assignment" clause and also to change the 90 day period to cancel the agreement to 30 days and initial it. You may start with a manager that is awesome and lock in your business, but if they go off to have a baby, or go to a better paid job with a different agent, you are left with the dregs and this is sometimes when we as owners get very piaaed off.
So when you sign a contract, always check all the clauses where practical. Getting stuck with less than great service has let me move on in several cases. I would imagine you are stuck.
When you find a new agent, maybe a good idea would be to get them then to forgo your first months management fees to transfer the property to them. This means that if you had changed the initial conditions to 30 days, a one month earlier transition to a new agent is now possible.
Either way good luck.
DD
What I usually find from a post like this is that you have become emotional about your tenants and their circumstances and not detached and looking at the bottom line. I achieve rents in a block of units in Kingston of $240/wk. My sister who has paid off her unit in the same block has her tenants paying $180/wk. As she is now divorcing, she needs to sell the unit. As the prices are now about the $210k mark, she either needs to radically raise rent now or take a lower sale price due to perception that the rent is dismal for the area.
Same tenants for 3 years, a retired kiwi couple that have installed ceiling fans and painted at their cost. Theres always a cost but $60/wk in lost rent. Id do the fans and painting and get a real rent.
DD
Anything thats been standing for more than 10 years is probably going to get a rubber stamp from council. In 2000 when my father died, his Forster NSW house we put on the market. The agent found the whole building had never had its final occupancy approval and it had been there 12 years. The council signed off on it without a problem.
The house was then sold. Richard is right, get on the phone.
DD
Leases, if it's a new tenant 6 months. If they seem ok after this then a max of 12 months. I often lock in a rent hike at the same time.
What I do is say the rent is $180/wk and I want $190/wk. I get the tenant to sign for 12 months, 6 at $185/wk and 6 at 190/wk. On one lease.This does 2 things, firstly gets me the rent I need locked in to a lease and secondly I dont pay any more fees for the rent review in 6 months.
With interest rates about to jump later this year Im happy to allow for this with simple short leases. After all, if there were 3 or 4 rate rises and your locked in at a rental rate for 3 years you are basically stuffed.
Does this help??
oo3c, wow. Im on the other side of your situation. She moved on after we had amassed a sizable property portfolio. Just told me she had had enough after 18 years and boom, the dream has ended.
The settlement was that as I kept the house I was to give her a big settlement to buy hers. I took out $450k extra in loans on the IP's which meant the cashflow died from the Ip's to pay the mortgage on my home.
So now instead of comfortable I have a huge personal mortgage and my business is very quiet. I would agree with most here in that you buy a unit or house you can value add and sell for profit.
I had a deal available to my clients last week in Cairns. A fire sale of a 2 storey house for $180k, all it needed was a good paintjob, the resale would have been in the $220k vicinity after spending $5k on it and dada!!! Equity or cash.
I couldnt get anyone on it before it went to auction. These are the sorts of things you need to find, pay someone to do the reno and sell it. Make 20-30k after costs and repeat x 4 each year for 2 or 3 years.
Why arent I doing it?? I need the cash first, so I will have to bite the bullet, sell off some of mine that aren't producing and then cashed up practice what I preach.
Kids are vital for both parents health and well being, but taking care of yourself financially and mentally will mean they see you in a better light.
Good luck on your journey, you can survive and with self confidence and pride.
DD
Guys, another way is to get a solicitor onside who will do the odd title search for you as a thank you for referring business to them. Sometimes being nice really pays off.!!!
DD
Dr Spock, its so good to get on here after ages away and see someone achieving debt retirement so well. Well done. So many of my clients are frustrated as they approach a property deal, only to show this credit card or that unpaid debt stopping their approvals for what otherwise would be a simple loan.
Great work and super well done.
DD
Ok big flashing lights here too. What you havent considered if you sell it to your friend is that you probably have an exclusive contract to sell it with the agent. If you just turn around and sell it to your friend within the exclusive period with the agent, you are up for the agents commission anyway. Thats even if you sell it yourself.
Please make sure that you read yout contract you have with the agent to sell it and determine whether or not you signed for a 60 or 90 day exclusive with the agent, when that expires, and do not mention your friends interest to the agent or you will have disclosed an interested buyer to them. If you take the property off the market with the agent and then sell it yourself to your friend, but still within the initial period signed with the agent, they will just check on sale date through RP data in a few months and send you the bill.
Of course this is a footnote only for other readers, Im glad it didnt get complicated for you and the sale went through anyway, but be aware you can get caought out if njot reading the fine print.
Regards DD
