Forum Replies Created
Hi Wake,
In some respects whether or not to sell will come back to the reason/s you invested in these particular properties and whether or not they are ‘doing the job’.
If you invested for growth (sounds like it from your thread) and the properties have grown and are likely to continue to do so over the long term then hang on. Don’t expect them to continue to achieve the growth of recent years in the short term – if they do see it as a bonus.
Peter Spann advocates selling if; the property is a dud, if someone gives you an offer too good to refuse, or if you have a better use for the money – as distinct from selling an investment to buy trinkets. Peter Spann also advocates a leapfrogging approach similar to the one you have been using with success.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Asiababy,
Ensure you have landlords insurance which includes sufficient cover for your ‘belongings’, public liability within your unit, and coverage for accidental and malicious damage by tenants.
Ensure your body corporate has sufficient building insurance and public liability for common property.
Fiinally depending upon the nature of your employment and health you may also want to investigate income protection insurance.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi KDT,
Happy to email the index of Trust Magic so you can see for yourself what the book covers.
Drop me an email with Trust Magic Index as subject (not PM as you cannot attach files) and I’ll send it back by return email.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Louroza,
From http://www.homesite.com.au/build/before_you_start/off_the_plan_contracts/
Sunset Clauses
Be aware of sunset clauses, particularly if you are buying an apartment. This is a very tricky area. If you are entering into an off-the-plan contract it must come to an end at some specified time. The sunset clause stipulates the date this occurs. If settlement can’t occur at the time the sunset clause expires, either party has the right to terminate the contract and any deposit moneys (plus interest) will be returned.This is not a straightforward process, and many court cases result from sunset clauses. In some cases the vendor has the right to terminate a contract, but at other times this is not the case; the same thing goes for the purchaser. If a dispute arises, the outcome is determined by the exact wording of the clauses and the specific circumstances surrounding the case.
Because of sunset clauses and other related issues, you would be ill-advised to sign an off-the-plan contract without first consulting a lawyer, who can step you through any difficult issues, help you to understand your obligations and point out any traps.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by RodC:I’d suggest having a chat to the local PM’s who manage these type of rentals to find out what the market expectations are for furnishing standards.
There’s no point going overboard if you don’t need to, but you obviously don’t want to put cheap stuff in if the tenants are expecting top quality.
Should be able to claim depreciation on the furniture as well.
Fully agree with all of Rod’s comments.
If you are entering the ‘holiday letting’ market on a long term basis you are well advised to initially purchase solid furniture that will go the distance. The standard of furnishing needs to be consistent with your property ‘status’
It is fair to say holiday makers ‘expect’ a comfort level that matches their budget and will be reluctant to accept a mish mash of furniture from second-hand auction houses etc.
I am sure that your booking agents will soon learn that your accomodation, as a complete, package is only OK and holiday makers will steer clear of them and/or your property.
Therefore get in touch with the booking agent and find out what the holiday makers expect – are you going/expected to include cutlery and linen for example?
You will also find that your depreciation claims will be significant on furniture. With some beiing written off in the first year and much of the other having short depreciable lives.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Darls,
I wouldn’t consider either of these two properties a good investment.
Wembley is the equivalent of one bedroom flat city – they are a dime a dozen in the area and their long term growth has been average to say the least.
Norseman on the other hand is even worse.
When evaluating properties do not neglect the fundamentals of the property.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jay,
Australain Property Investor has median rents by postcode in every second edition. Be aware that not all postcodes are listed as some are statistically unreliable due to the small samples.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by MortgageHunter:My offer was as an investor rather than a broker, although I do have some finance knowledge to offer too.
No drama here Simon – I know your ethics are above reproach.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by MiniMogul:“good capital growth is something that in the main is restricted to capital cities and large regional centres or coastal cities and towns.”
I believe Kelbren is correct in this statement
wrong I think, (firstly because I have experienced annual capital gain of 50 percent – that’s twice the rate of Manly sydney at the top of the boom – in towns of 8000 or less!!!) or rather red herring. capital growth is related to growth in *demand* not size of town or proximity to the coast, although those two things often go together with cities and coastal towns, it’s not the *reason* for CG.
for example, apartments in cities. OK the city is expanding but apartments are going down in value because of oversupply, lack of land content, high strata fees, sloppy building standards, being so trendy that they date quickly, etc. so therefore decline in demand. then again a small town nowhere near the coast which is getting a major factory plant in, properties will go through the roof as the *demand* manifests and people will want housing.
Hi Mini,
The inner city apartment ‘downturn’ is not an accurate picture of a sound investment decision made by learned investors. Nor is the recent, short term, 50% growth figure you refer to for one of your properties.
Both examples are results of unusual short term phenomena in the property market. Inner city apartments flogged off to o/seas or poorly educated investors at high priced seminars and country properties sold to people recklessly chasing cashflow creating ‘property bubbles’ in smaller communities.
Not once I have seen, on any forum, a seasoned investor say that inner city apartments are (or were) a good short term investment or an accurate barometer of metropolitan investments – sure some have said long term they should be OK but to use short term growth in inner city apartments as an example of growth achieved in cities is erroneous at best.
A better study, if you are talking growth, is to look at each and every capital city in Australia. In the period 1986 – 2003 net growth in dollar terms varied between $144K and $370K depending upon which city you invested in.
By way of comparison and using the property Kelbren has found it is nearly 20 years old and in that time has achieved the lofty value of $55K. I have no idea about construction costs here but even with a freeby construction and land this property has achieved poor growth in the long term.
Sure this is a single property and at the risk of being accused of selectively using statistics I argue that similar figures to those being displayed here are posted from time to time from all parts of Australia and New Zealand.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Muppet,
There is still a lot of water to go under the bridge before there could be long term benefits to the local area.
The article indicates the company is ‘planning’ and ‘considering’ and as such only speculators would buy a property in this area given that there is a huge difference between planning and completion.
Too often I hear and read such announcements in the press only for the fanfare to turn into a resounding silence as feasibility studies reveal the economics of the proposed plan make the project unviable.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Darls,
One of the first steps an investor needs to make is to establish their investment goals in a manner that is consistent with their personal goals and situation.
I also suggest that a discussion with a broker fairly early in the journey is time well spent.
A good broker should listen to what you are wanting to achieve and help you structure your loans and bank accounts in a manner that minimises unnecessary costs and difficulties the further you progress along your journey. He/she will also help you establish your borrowing capacity – which can then determine your affordable investment areas.
A similar discussion with a savvy accountant is also valuable as they too can assist with issues such as tax and purchasing structures. Once again a little time getting the structure right now can be beneficial in the long term.
Once you have established your preferences and must haves, in an investment sense, then you will be better able to sift the ‘rubbish’ from the ‘possibles’ and subsequently down to the ‘that ones’ – then the real fun begins.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kelbren,
How old is the property?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by kelbren:The town of xxxxxxx is a small but growing community. This home is not only a peacefull place to live but also an excellent investment.
My thoughts would be to relocate other houses on additional land.
Hi Kelvin,
It is an interesting dilemma you find yourself in – publicise the name and someone may sweep the property from out under you but then our comments become a little ‘vague’ given our lack of knowledge of the area.
In many respect we can only ask questions that may help you clarify your decision so here goes.
The ad claimed the town is ‘growing’ at what rate and by how much? Is this a long/short term trend? What employment prospects are there for the growing population? Why are they moving into the area?
The ad also claims that the property would make an ideal ‘investment’ – why? who says so – the agent trying to sell a property? what are the short and long term vacancy rates in the town like? What sort of growth is there in the area (forget the last 2 unusual years)?
Will the local council allow you to ‘subdivide’? Will locals go for it? My experience of country people is they like their piece of space and as such they may reject a smaller parcel of land.
And finally – sure it meets the 11 sec solution – but is it a good long term investment?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Richmond,
The local rag plastered BIS predictions across the front page of the paper on Monday and no doubt caught the eye of many a ‘would be’ investor.
I happened to read Tuesday’s paper and there, buried on page $ (?) were a number of rebuttals from other experts.
T’was an classic example of bad news sells.
I am sure that some would be investors put their oney away after reading the headlines news on Monday.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Sonja:Hi Steve (and associates)
Thankyou
(understatement)
Hi Sonja,
You really must control that excitement[biggrin]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jenny,
The best use of the money will be determined by your goals and your current situation.
For example if you are ‘close’ to retirement and want no debt then pay down some of your debt commencing with non-deductible debt.
If however you a little way from retirement then use the money to assist with further purchase/s either directly or through paying down non-deductible debt and release the equity.
If you want to keep somethingup your sleeve put some of the money in an offset account against some of your debt with a preference for non-deductible debt.
A little scant of concrete comments as more information would be of assistance.
Cheers
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi MMM,
Try the Minister for Local Government (or equivalent) or The Local Government Supervisory Board in your state.
The council concerned will be able to direct to you to the relevant authority.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by recoveryman:if things dont get better finding a manager
HI Recoveryman,
Without knowing the full extent of the issues you have with your current PM I would counsel against making a rash decision.
Sure you are having ‘problems’ now but will the short and long term costs of ‘getting out’ of this property be worth it in the end?
Sometimes we get so focussed on the small matters we forget what the big picture is.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Folks,
Call me septic if you like but………
Two new members posting really positive and glowing messages about an organisation on their respective first days.
Me wonders same person different log on name, two employees of NBG or…..just satisfied customers hmmmmmmmmmm.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Ali,
Just got back from a morning tea with other property investors (including a few with million + equity and others with half million + equity portfolios) and it reinforced the value in having a group of people with similar investment goals and beliefs.
Of particular interest was a couple of people just starting out and who had started to ‘listen’ to their well meaning friends and relations (not investors) who had their batteries recharged over coffee and now understand, first hand, the value of like minded souls.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
