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I am assuming the property is in South Australia.
Try these links;
http://www.parliament.sa.gov.au/Catalog/legislation/Acts/S/1988.13.htm
http://www.parliament.sa.gov.au/Catalog/legislation/Acts/C/1996.37.htm
A little light reading for Boxing Day.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Mgr,
Don’t be seduced by the rental guarantee as there can be a number of pitfalls attached. A well chosen property, marketed at the right rent should be able to sustain itself at market rates.
1. Who is providing the guarantee? I have seen instances where the ‘guarantee’ was provided by insurance companies, another by a $2 shelf company and yet again instances where the guaranteed rental was far in excess of market rates and made an otherwise poor investment look glowing.
2. Some developers (not saying this the case here) use a guarantee to move a property to investors and the cost of the guarantee is built into the price.
3. Irrespective of whether or not you decide to go ahead with this investment at best you will need to find another bank – the one you are currently using will not value the property anywhere near the asking price.
Another bank may use a different valuer in which case you will not be required to make up the significant shortfall – although given the discrepancy I suspect other valuers will still come up short.
Such a difference is going to be hard to make up in the current market and as such you are better off looking elsewhere.
Good luck with the hunting.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Marisa,
I would suggest that you maintain the pool properly and also get the rent reviewed to ensure that the tenant is paying market rent + premium for the pool. This way the property becomes a little more attractive to a would be tenant and increases your gross returns.
Correct and proper maintenance of the pool will also send the right message to your tenant – I look after this place and expect you to do the same. And, if you were to sell, sell in summer and gains extra $ because of the well maintained pool.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
The question of wrapping legalities in WA has come up before.
Try this thread https://www.propertyinvesting.com/forum/topic/12120.html?SearchTerms=WA,Wraps
Note I am not a wrapper and hence cannot qualify any of the comments made.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Rob,
The other comment I would make is that some customers seem to have a ‘loyalty’ to a bank on the mistaken belief the loyalty will always be reflected in the deals the bank will do for you.
Obviously this is not the case for so many bank customers.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by The Mortgage Adviser:I would like to hear some feedback about why people pay more than they should on items that cost them so much money…
Hi Rob,
Speaking from personal experience the reason why we didn’t change lenders was my own ignorance.
Up until some time ago when my learned broker corrected me I was under the misunderstanding that if I refinanced I would also be up for ‘purchase’ stamp duty as well as mortgage stamp duty.
Thankfully I did listen to my broker, changed banks, got a better product and have moved on significantly from that.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by peterrowe:I have just watched the Channel 7 programme tonight about property investment and as a result went and found your website and joined.
Welcome aboard Peter and I am sure that you will find there are many people here who can offer you some sound advice and comment.
My wife and i have been thinking for some time about investing in property as a means to increase our personal wealth and rely less on super and pensions in the future.
You are already ahead of a great number of other who are yet to realise how much they will require when they finish work and how little they will have unless they do take considered action.
We have never been down this road before and are wary of so many get rich quick schemes. We don’t want to be millionaires – although if that was an added bonus it would be nice – just comfortable with an income and a way of paying off the mortgage on our residence.
Seasoned property investors will remind you that property should, in general terms, not be considered as a get rich quick process.
With considered research and a healthy ‘can do’ attitude you can achieve what you desire.
Initially my advice would be to read some of the text references listed at
https://www.propertyinvesting.com/forum/topic/6845.html
as these will give you some indication of other useful resources that are around. Ultimately as good/bad as these resources may be for you and your situation they will provide you with ‘food for thought’ – but just remember that you do need to own a property to become an investor and in some respects this is when the real learning takes place.
In some respects it is a little like starting a new job – all the induction and training is rounded off when you start on the job.
It is also important for you to work out what sort of goals you want to achieve as this will determine a lot of your subsequent actions.
We have about $200,000 in equity but hear so many stories of investments gone sour because of low rental incomes or just simply buying in the wrong area or at the wrong time.
We have discussed going to see a financial investor but after reading some of the comments on this site, who can you trust? Or, who is up to date with the latest trends.
With $200K in equity you are well placed to start an investment journey. However be aware that not all of the $200K may be accessible for investments as you banks will only lend to 80% of the value of the property less any existing mortgage. You can go higher, under certain circumstances, but you will incur mortgage insurance.
It is advisable to gather a team of people (accountants, broker, mentors etc) you trust around you so they can help point you in the right direction.
In choosing these people ensure they are also property investors as they will be able to speak from experience as distinct from someone who speaks from reading.
In the main the great majority of financial planners are salespeople who are more interested in selling a fund than your long term future. There are some out there who will offer a property focussed approach to financial planning – but they are few and far between.
Is NSW still good or because of exit taxes is it better in other states – or indeed, does it really matter which state so long as the investment is sound?
Many people initially prefer to invest in their local area on the belief that they need to be able to drive past their property on a regular basis. There are many people here who have extended their investment boundaries to include areas well and truly outside their own area. With good research and through the use of quality locals it is possible for you to also extend your investment horizon to beyond NSW.
From a distance it would seem that NSW is feeling the effects of the vendor (exit) tax as numbers of poorly informed ‘investors’ try to save some tax and give up the long term benefits of time in the market in Sydney.
I would really like some advice of starting 2005 off with a new personal business plan.
Can anyone offer a getting started advice plan.
Initially you need to sit down and analyse where you are currently at and what you are attempting to achieve.
Investigate the assets you have & constraints you face – time to retire, income levels, debt levels, mindset, knowledge, fear factors and then identify how to utilise and address these in a way that makes sense to you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by kstar:– it is depressing to think you’re stuck in a bad situation – now I see a light at the end of the tunnel – I hope we can find a mortgage broker who can help us
Hi Kstar,
The brokers are out there and there are a number of regular posters who could be of assistance. Bear in mind not all brokers are created even and I would recommend you get in touch with an broker /investor so they can assist you with the correct structuring from the beginning. It will save time and costs later on.
Certainly not trying to tell you to suck eggs, but rather to offer some encouragement…
One of the key things to remember is that a lot can be changed if you are prepared to change – keep doing what you have always done, and you’ll always get what you have always got.
A little ‘corny’ but I think there may be some messages there for you and others in your situation.
See if you can develop a ‘can do’ attitude, spend some time learning by reading voraciously, asking questions and then getting in control of your destiny. Sometimes it is easier than you think with the missing key ingredient often being knowledge.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
HI Frank,
PM ‘mortgagehunter’ he is a mortgage broker and investor based in newcastle area.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by pad1:I like many others am new at all this and have dived into my investment career with a darwin house and $270k mortgage. My gut feeling is to pay it off asap and own it outright
any thoughtsI am an I/O investor and will remain so while we have a non-deductible debt on our own home. Once this is paid off then we’ll review the I/O V P & I debate then. Bear in mind the loans will remain structured as I/O giving me the flexibility to decide how much extra, or not, I pay off.
A couple of of the critical bits of information you have been missed out – what are you attempting to do and how are you positioned for subsequent investments, if in fact, that is your plan?
Knowing your end point will largely determine what you want/need to do.
For example if you are aiming to own multiple properties and have limited savings and/or equity you would be advised to plough surplus funds into this property until you get to a stage when you have sufficient equity for subsequent purchases.
At the same time this needs to be balanced with the need to have some spare cash available so a redraw/offset account would be advisable.
While being a cautious investor is fine – you do get used to having debt attached to your name. All you need do is keep the level manageable and have resources accessible for the moments when the going gets tough.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Yack,
Have some more time on my hands (on holidays) so I now have some time up my sleeve.
2004 – The Year That Almost Was.
Moved to new school and immediately saved 1hr per day in travel time.
Reduced PPOR loan by 25% from 12 months ago.
Eldest daughter obtained scholarship and moved to Perth to study for final two years of school.
Current school won a statewide award.
Two staff won scholarships and travelled to USA on study trip.
Chairman committee planned conference for 850+ people.
Completed last two volunteer bushfire fighting modules in preparation for this fire season.
Repainted one units internally and increased rent.
Coninued to invest spare equity into share fund.
Co-funded commercial development in last remaining commercial block in central Joondalup with returns projected between 25%-40% over two years.
Refinanced to access more equity from existing properties in preparation for 2005.2005
Will lend family members some money to provide bridging finance for their new home.
Another one or two IPs.
Continue to release remaining available equity into share fund.
Aim to reduce PPOR debt by a further 25% of current debt level by end of 2005.
Family holiday in Xmas 2005.
Gold Coast holiday wife and youngest daughter in tow March 2005.
Eldest daughter to finish school 2005.
Repaint two other properties in my spare time.Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Check out the following thread for an idea of what people have read and how they reacted to the book.
https://www.propertyinvesting.com/forum/topic/6845.html
You need to identify what you want to achieve for your investment goals. This is a critical stage in the journey you are wanting to follow and the more specific you detail your goals the increased likelihood you’ll have of success.
Once you have established this then it will largely determine what sort of property will suit your needs.
For now I would be mindful of not blowing your existig profits and if necessary deposit the funds into a fixed term account to keep them a little out of the way.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Leewh,
Congratulations on wanting to improve your ‘lot’ – already you are a step ahead of many people in Oz.
To me the key issue for you both to address is where is your current income going? I always advocate people investigate their current habits to see if they are living within their means, inclusive of having some funds to regularly invest.
The easiest way to do this is for you and hubby to do up a household budget to determine how much (if any) you have in discretionary expenditure. A careful analysis of your spending habits may realise some realistic savings that can be made. There may need to be some ‘sacrifices’ made in order to facilitate this.
See the following thread for some idea of sacrifices others have made
https://www.propertyinvesting.com/forum/topic/14051.html
Earmark the savings and, if possible, some extra funds towards an investment program. Sure this may take some time but the more you become focussed on your future then the easier the achievment of your future becomes.
I wouldn’t be unduly worried about using your brother-in-law as your broker, provided he is familiar with the needs of investors, has access to a number of lenders, and you both can keep the relationship on a business level.
You can utilise your superannuation funds to assist with the purchase of investment property.
In a nutshell you establish a self-managed self manged fund, a trust and then use the super funds as a deposit and the trust borrows the balance (with you as guarantor) so that the property is fully financed between you and the super fund.
Please note that this is not something that should be done without specific and expert advise as the penalties for non-compliance, with respect to SMSF are considerable.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by eddiec:I think I’m pretty much ready, so I will:
1. Start looking for a property (I have no idea WHERE to start though … thought I might just flip through the paper on the weekend).
2. Start talking to mortgage brokers to obtain a pre-approved loan.
Sounds like a reasonable move?
Hi Eddie,
I would reverse these two steps – no point looking at stuff at $300K if you can only borrow $200K.
In addition I suggest that finding a good property requires considerable more than just ‘looking through papers’.
You indicated you were a growth orientated, long term investor and as such you will need to initially identify some of the macro features that will generate growth in a local area.
Once you have identifed the macro factors then start looking for properties in the identified area that have other features making them ‘good investments’
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Eddie,
I certainly recommend you get linked up with a broker for your financial needs. They will be able to align you with the bank that has the best product and range of products for your short and long term needs.
We were a bit like you and were very focussed on paying off our home loan before embarking an investments for our future. Did some maths and realised that we were due to pay off the PPOR loan about the same time we were due to retire.
Some research and located a number of properties that suited our investment goals and have purchased these, while at the same time maintaining an aggresive approach to paying off the PPOR loan.
In effect, we have been able to achieve both parts of our overall goal well ahead of schedule. In some respects the first steps are the hardest and then the snowballing effect kicks in and momentum is maintained.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Booboo,
I would be taking great pains to ensure the ‘retired folk’s’ money is secured.
I am sure this is not the case but I could imagine the headlines ‘Shyster Booboo Strikes Again – Rips Off Old Folk Again’ if things went awry.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi jdnat,
You’ll need to watch for fees, management issues and rights, LVR issues and refinace issues and that is before you start analysing the property for growth and cashflow issues.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Try also
https://www.propertyinvesting.com/forum/topic/14329.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by femaleage20:So the big question….do I pay them $10,000 in commision or attempt to do it ourselfs? Our town has a pop of about $30,000 and houses sell quite quickly so not worried about time it’ll take just wether or not we can do it as good as them!
Just a personal though and no direct experience to back up my comments.
I wonder if the attractiveness of selling your home boils down to a desire to save $000s of dollars in REA fees transpires to be, more often than not, a series of headaches and frustrations. This situation resulting from an inability to get a market presence through limited advertising and marketing. An agent is then employed at a time when the property has the perception of being ‘stale’ and with ‘problems’ largely as a result of the length of time it has been on the market.
As I said no direct experience just some rambling thoughts.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Joe,
Just adding my little bit to the discussion.
There is significant redevelopment and infrastructure valued at over $2 billion at the commencement stage. With Coomera projecting an 8 fold increase in population in the next 20 years.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
