Forum Replies Created
Its not the perth oricing that worries me its the prth agents. Managing rules in WA are so pro tenat we just sold our 2 in the last 12 months to be rid of the hassle. Be aware they ofteh charge 8.8% then 2 weeks letting not one and then $66 initial inspection fee, $45 for a qtrly then have the cheek to charge a whopping 2.5%on top of any tradies that work through them.
A complete rip and something to be aware of.
Pricing will either go up or down either way you can make money.Happy Hunting
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Bevan French Rae & Partners Solicitors 3rd floor 93 York Street Launceston Tas 7250
PO Box 1257 PH 03 6337 5555 Fax 03 6334 1693
(Sharna-assistant)He does all of the deals for all of my clients and mine as well.
Say you are a referral from Dave Thomas and you get a major discount.
My good deed for the day!!
DD[biggrin]
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Well possums and rats and roadkill are light compared with termites who eat the house!!!
This is a nice thread.DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!The 2 to 1 ratio quoted is actually 10% flat
1.5 to 1 is 7.5%
1 to 1 is 5% etc.So to have a property worth 200k getting 200 rent sucks as it is only achieving 5% return.
For every $1000 invested you need $1.50/wk to get 7.5% return. This covers the mortgage and the managing agents fee but DOES NOT cover the body corp fees or council rates. So even at 7.5% return you are up for an average of $2-2.5k/yr actual costs.
This can be claimed against your tax as well as depreciation which you should have on every property anyway. So if depreciation on a $100k property is about $2200. Your total tax deduct would be in the vacinity of $4500/yr. At your marginal rate of 30% tax you would have $1350 actual cash saved off your tax bill. So if this amount is then redirected back into your shortfall on the property in the second year, it would mean your real cost of annual ownership in year 2 would be less than $1000.
So what you really need to cover costs in total is about 9.3% return or just under the 2 to 1 ratio suggested earlier.
Hope this helps.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hey Guys im in Coffs and they are having a meeting this coming Monday. I’ll be there and have a look too.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Great news about Colonial too nice so I can pass that on to people looking for 1 bedders. Go with the 2 bed if possible but I dont know the asking price and the body corp fees are a high ongoing cost to be aware of.
I tend to look for smaller blocks with low body corp fees and of course good returns. In a lot of cases the gross return of 8 or 9% is erroded to 5 or 6% by all of the usual costs including rates as well as any maintainance. Just do your figures properly and you should be right.
Good Luck whatever you choose
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Michael has always been a confident project builder and marketer and is successful beacuse he seeks it. Those using the share market and those usuing property will counter each other in quoted wins and losses forever.
I love our diversity and I also love all the passion each of us shows in what we do to achieve. Hats off to all of those that made money whichever way and lets all share the knowledge and info that got us here so we have great chats at the BBQ’s with like minded intelligent people.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!For example say we have 18 ip’s and with all of the interest, management fees, rates and body corp fees we go back about 40k. Add 20k in depreciation on average and we can earn personal income of 60k without paying tax. Anything above this is then taxed as normal.
Any negative or tax credit is carried forward so when we sell an IP and have say $16k carried forward and about $60k in actual deductions its then nice to sell the odd IP make $160k cap gains then pay tax on 50% after holding IP for a few years. So $80k cap gains and $76k negative from deductions means I make $160k and still get a $zero tax bill as having earnt $4k I pay no tax as this falls under the tax free threshhold for the year.
Derek this is how I see it. Do these figures seem right? This way we remain negative, and the cash injection from the cap gains covers our shortfall is real $$ whilst still minimising tax.
Then I help people as well get into property for living $$. Just wanted a second opinion.
****This is an example only and should not be mistaken for true figures.****DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!$240/160k buy is a straight 7.5% return. What rates and body corp fees do you need to pay? You may find the deal isnt quite where it started out from.
Secondly expect a high deposit for sure. I have heard recently that Comm bank are doing 38 mtr 1 bedders on an 80% lend so may be worth a chat with a broker.
Good Luck
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hi Aaron, it all depends on what you personally call cashflow positive. Is it all costs covered, mortgage and management rates covered or something else.
At the moment all of the deals available through me are only 7.5% return which does cover mortgage but not rates and body corp fees.
I am cautious in WA deals as the management there sucks with several extra charges and fees, just for actually doing their job. Add this back into the deal and you need an extra 2% on each deal to make it bearable.
Good Luck and happy hunting.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!HI Mike C talk to Redwing. Seems to me “mic” has some issues.
DD[biggrin]
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!In the past I have been a currency dealer, stockbroker, dealt in the building industry and in IT. The last 5 years of my life I have spent 95% of my time on property. Now 5 years on I have a nice portfolio, live 250 mtrs from the beach and am learning to fly.
None of this possible without property!!!!!
Sure I have some small parcels of shares and will be adding more over time, but im a houses man first and last and feel there is enough diversity in residential, commercial, industrial, locally and interstate to absorb all of my efforts for some time to come.
My only great wealth has come from property. As I do most of my own reno work as well the savings and quality of work I can do gives me quite a lot of confidence that even in this lull in property in most sectors except WA, and SEQ units/townhouses, I can increase both equity and rental yields.
We intnd to hold our existing portfolio for quite some time and add to it as the opportunities present themselves.
Good luck all and dont forget, we are all different and thats what makes this all work so well.
Happy hunting
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!If you are after simple cost effective ideas for renovations maybe a back issue of may 2005’s API which had 50 top tips to increase your rental yield as a cover story might be worth looking up.
Nice looking guy on page 48 feature too[fear]
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Attaching the posts is easy. Pre drill holes thru the timber and the metal fencing at the right height(place the timber supports against the fence and measure where you need the holes through both) buy a bag of self tapping 75mm or 100 mm metal screws and simply wratchet them in by hand. This is the time consuming part as if you use a drill to wratchet them in they tend to over screw slightly and not give as good a grip.
Then once all the verticle posts are attached to the existing fence simply place the lattice on top of the fence and screw to the supporting timber by self tapping wooden screws(hex heads are best for this.
YES you have to paint. If you dont and the treated pine is weathered by the elements, a nasty grey colour is not what you need. We did the lattice in mission brown to match the fence and the lattice surrounds and the verticle posts in green fence paint, and the contrast looks good and is enhanced by the vines growing over it all. You do need to paint it, please forget this idea if you are going to do half a job.
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!It all depends where in tassie. For example a 3 bedroom house in west tas mining towns is a no no. Recently a tin mine was closed for 9 months loosing 260 jobs due to falling tin pricing.
On the other side of the well we have a nice growth happening in Launceston and Georgetown due to the new pulp mill being built there. Stable employment and high building costs in the main towns in tassie are making the old housing commision cheaper houses on good sized blocks very attractive.
With up to $18k/square building costs, the $120-150k houses are really being bought for little more than land value. Then adding the 7% return from existing renters and its stil one of the better options for entry level investments.
I now have 5 having bought 2 more in November last year. Current vals mean I have made 20K equity on each so far.
Your call always but know the market and why it IS the market there at all times. Buy when you are confident enough with the indicators, and not pressured by marketeers.
Good luck and happy hunting.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!cautious consolidation from Redwing and a few others[biggrin].
Well my wife and I have had 2 days of what if’s??, calculator out and CG tax and offsetting income being high on our lists of options to chase.Our end result was to sit and wait on the portfolio we already have and me off to do a reno every few months on what we have to increase rental yield.
I have one townhouse in Kingston left to paint and do new curtains for, one bathroom in Redbank Plains to paint and tile a base strip in a house and a stray wall after a leaking shower was repaired.
I have just added $30k to a house in Rosewood by redoing the bathroom, floor tiles, tile paint splashback and shower over bath recess, paint all cupboards, new shower head, new taps and vanity, had to trim base of doors to fit new italian tiles(bloody thick), then ceiling exhaust fan, fully insulated the roof myself, that took 2 days, ceiling fans to all 3 bedrooms, kitchen and living room, grouted splashback in kitchen which had never been done, exhaust in ceiling of separate toilet, and an exhaust fan above stove in kitchen.
Curtain quote on way, carpets ordinary but ok for now.
So my thoughts, tweak loans, tweak existing properties for best rent or resale, always keep your eyes open for bargains and always go against the flow!!!!!!
PS Lebanon beat Fiji Bati in the final of the 7’s this weekend in Coffs(as sponsored by our local boy Russell)[cowboy2]
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Hi Tan
we had a similar problem when the vacant lot behind our house was built on. As it was a gentle slope from front to back, where our fence was, the plans never showed they were raising the land 900 and then putting a really high slab of 300 on top of it. This meant that in total we lost 1.2 of the 2.4 metre height off our fence and privacy at the back. Asked the new owners to raise the fence and they said it was fine as is and they were a little broke as they had just settled on the new house.
Ok, balls in my court. I used treated pine frames and made up 600 high lattice which I painted in mission brown to match the fence. Neighbour stuck his head over and said “my wife doesnt like the colour “as their side fence was that pale “lets get grafittied” colour.
My reply was “tough, if you wanted a say you should have agreed to something sooner”. I got the lattice up and then got potato vine in three ground to top strips on my side of the fence and within 3 months of extra watering and blood and bone, dada!!!! no snoopy neighbours peering through. He also got the hint quickly and planted quick growing trees his side.
We moved 2 years later with beautiful flowering potatoe vine clinching the family sell for us.
Paint the timber with a double coat and the lattice too. Thats a pain but it is very resistent to the weather as it was treated then painted then attached to the colourbond fence with 900 long pine. As we did all of this work ourselves(easy just time consuming) we saved a bundle on the metal lattice that is only 300 high and 5 times the cost.
Hope this helps.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Love this thread, Have a house on a long narrow 1240 sqm block with 55% at the back below flood level. Raising the living above with carparking below, what an inspiration.
Im off to council, yahoooooooo
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!Wow, thought this was a new thread. Oops!! Well the main areas I assist people are in Qld southern regions, Rockhampton, Gladston and Cairns whilst the Tassie market I mainly concentrate on Launceston and Burnie on the north Coast. I have a few new sources of info for west coast mining and whats yet to come with that so its all a bit interesting.
For those still guessing, the Logan Central area had a 9% growth for units and townhouses in the last qtr alone. Hmmm, guess what Im looking at.
DD[fear]
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!The boom over, but bargains galore can still be found for the smart investor.
Never be afraid if it needs new carpet, tiling or painting. These are your opportunities to turn a suspect into a prospect. The potential there is often overlooked and where you see it others fly by.
So if you are twiddling your thumbs, dont.
We are looking at adding cashflow into our portfolio by adding air conditioners to 6 townhouses and 4 houses. Sure its capital improvement but for the $1000/property average you get a $10k val increase so whats the prob.
Go forth and rectify!!!
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!
