Forum Replies Created
- Originally posted by nordicskier:
BUT how do you apply for finance from bank when they want to know what the property address is? Seems like chicken and egg stuff to me.
Hi Skier,
Without going back and rereading all comments in this thread – the suggestion to get finance first – is more about knowing how much the bank will lend you in general terms without necessarily geeting to the stage of actually applying for the money.
Barry,
In some states it is required to get insurance once you have signed the contract.
Irrespective of whether or not you have to have insurance you now have an interest in the property and for the sake of a small portion of your annual insurance bill would not want to be left uncovered at any stage of the purchasing process.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Price,
Income and expenses are apportioned in direct relationship with the percentage owned, which in your case is 50/50.
Salary sacrificing is a process whereby you can make certain approved payments from your before tax salary this has the effect of reducing your taxable income. Depending upon your employer there may be different aspects of your expenses you can package off – some of which will/may be subject to FBT.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Apprentice Investor,
Has closed down – not sure why – ran out of legs?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Rose,
Suggest you contact (via PM) one of our resident brokers – (in no particular order) – stuart weymss, mobile mortgage, mortgagehunter or terryw – sorry to others who slipped under my radar.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Deanna,
If you are goign to buy sight unseen then you will need to ensure you do complete building and pest inspections as a pre-requisite.
I would also talk to the local council to see what is happening in the area, a few of the local businesses and search the Vic Ed Department website to see what is happening with enrolment numbers in the local school/s and a search of DOLA (Vic equivalent) to see what some of the sales history in the area have been like. All of this can be done from ‘home’.
I would also argue that given this is your first property – for your own peace of mind – you should go and visit the potential places. You have already done some short listing and as such you are in a position to maximise your time away. I would also contend that there is more to selecting a ‘good property’ than just the 11 sec rule – there are a number of other important fundamentals to consider – employment, populations changes, infrastructure in the area, proposed infrastructure, economic resiliency, distance from large centres, access to transport and so on.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Stuart,
Saw a similar piece of research in API – was that the same one as you are refering to?
If not that articles gave a similar answer albeit (from memory) there are a couple of brief windows in time when a fixer was better off. I would argue we have been in a ‘trending down’ period since the late eighties/early nineties and as such variable rates were falling.
It would be interesting to do a similar survey in a ‘trending upwards’ period to see what the result show then. That is not to say we are in upwards cycle now either.
For me I fixed (3 years) one of my loans in August last year at 6.06% – wish I did it for 5 at 6.19% (from memory). I’d suggest I will win that gamble but as you indicated with your research I am like the many others I am losing [bigeyes] with a couple of other loans.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Fnomna,
I will state upfront the following comments are not mine but I believe they may be useful to you at this stage of proceedings.
The author, Jason Wier, is a Victorian based REA and the message was posted, as is, on another property forum.
“I run a real estate business and recently sold a place in Glenroy. I didn’t find the local papers to be that effective for buyer Inquiy. So be careful if you feel you are being pushed into a big advertising spend where a large proportion goes on Print media. The intenet is by far the most prolific form of advertising used by genuine buyers on the hunt, combined with a for sale board – you will find that the active buyers in the market will be straight onto it if it is not overpriced.
I would be very careful of any agent trying to charge you to list on the Internet for a standard listing, as they pay by subscription and it should be consumed as their own marketing overhead not your Vendor expense.
So my first point would be ask them what they expect advertising will cost and why.
Their fees will most likely be a percentage but be aware they will rarely discuss the GST component and many sellers end up thinking they’ve negotiated well to get say 2.5% but it actually works out to be 2.75%. It can make a big difference on your net return. Most sellers find this out when it’s too late to change anything. I don’t know what the standard is in your area and it will likely vary – be very careful of anyone trying to take large chunks of profit by charging you 10% plus on amounts over a certain figure – It reeks of profit grabbing greedy business practise although in this market it is not as common.
We operate on a discounted flat fee system, only payable upon satisfaction. I think it’s fairer. There are now more agencies going this way. Just make sure they have a genuine “loop hole free” fee structure and that it’s not just a business marketing hook.
You should also ask how long they think they will take to sell the house? My advice is do not tie your house to anyone for more than 30 days. While we would all like 60 as a minimum. It’s not necessary if they have quoted you an accurate estimated sale price. The extra 30 days is normally used to get the price down if they have high balled you for business. If you are happy with them and for some unforseen reason they can’t sell your house – that is reasonable, they should be confident they can get your business for another 30 days. We only ask for 30 days and haven’t had to re-sign anyone. I’d prefer our clients be happy to stay with us than forced by a contract.
The authority period to sell has nothing to do with settlement periods. I have heard of agents tell vendors they need at least 4 months because it might be 120 days before settlement. Be very careful statements can be made that are irrelevant and used to confuse. Infact if the agent sounds confusing – steer clear.
You should be asking the exact levels of service to be clearly identified in print.
Stay right away from sloppy agents, if they’re late, poorly groomed, crass – drop them straight away. Don’t even waste your time listening to them, regardless of which agency they come from, if you are really fond of an agency better to ask for another rep to be sent out. Some of the best presented businesses have the sloppiest agents – if you get stuck with one of these you wont be satisfied and will be paying an undeserved fee.
The agency you choose while certainly needing to be reputable, is probably less important than the individual you engage as your listing agent. It needs to be some one you feel very trustworthy and honest . So ask yourself do you trust the person, do you genuinely feel good about being in their company?
It is your property that is the product/stock the purchaser buys. It’s not realistic to believe an agent who thinks they can get a better price because the agency looks bigger. The purchaser will pay on the merits of the property. Try to find the agent who seems to have the most genuine enthusiasm for you and your property, not he/she and the agency. Be careful enthusiasm doesn’t necessarily mean highest price or most agreeable, if the agent agrees with everything you say or comes across with a lack of firmness to their views, it signals a problem.
You may be asking why I haven’t mentioned price yet and that is because, if you rely on any agent for the price of your property before doing an objective assessment yourself you are heading for big trouble. You should already know the accurate value range (no more than 5 – 10 %) before they come in. You should scour the market, get past sale result data and view recently SOLD property. You will have to act as a buyer again. Assess using variables of Land size, House size, Construction type, Car accommodation (separate to house size), Street Appeal and Location – Use the property sold that is closest to yours as the top/first ones for comparison, so much can very between even a couple of blocks of the same suburb. Assessing the market value is tough but educated buyers know the difference and it is important that you work it out also.
At the end of the day we agents are a simple breed, honestly we just want your business. How we go about it as individuals is what seperates us. The Vendors who do the best are the same as those Buyers who do best, they are the consumer whom educate themselves the best.
So when it comes to price. See if you can test the agent on their knowledge of the recent immediate local sales. Don’t let them rattle off results that suit them, quote addresses you know the result of and see if they know as well as you. If they are properly prepared and a true professional they should impress you with their knowledge. If they claim a poor memory then ask, why they don’t have the data on them a professionally prepared agent would.
Good luck
Any further questions please reply.
Jason Wier (owner)
realestateangel.com.au
Ph 1300 781 901″Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Acey,
Appreciate your suggestion was about alerting the vendor to the agent’s actions.
However there were a couple of earlier comments that said the vendor could save on REA commission if a ‘private arrangement’ was made – hence my comments about the commission could still be claimed if the agent had introduced the buyer to the property.
Cheers
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
Certainly souns like this agent won’t get many referrals from you elinitha.
With respect to bypassing the agent – I believe there is a little clause in the authority to sell which says something along the lines of ‘the agent is entitled to their (or part thereof) commission if they introduced the buyer to the seller.
As such in the scenario being discussed the agent may still be able to ask for their commission from the vendor anyway.
Obviously issues associated with timelines, state legislation and standard contracts and the question of proof etc may all come into play.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Sonja:One thing to be careful of with evaporative A/C is that there should be a pipe that runs from the unit to the guttering. This is because there is a concentrated amount of salt in the water that is dumped when the unit is shut down. This can lead to rust problems both in and around the unit as well as the roof.
Hi Sonja,
We used to have the pipe configured so that the waste water could be put onto the garden.
A tap fitting at the end of the outlet pipe and connected to a hose which could be shifted around the garden as required.
The salt effect is minimal when used this way and also saved the guttering from constant exposure to ‘salty water’ and thus saved maintenance bills.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by flanno40:“sinking fund” ???
Hi Flanno,
Sinking Fund is a levy imposed by the Body Corporate which is put aside for upkeep projects on the complex.
Some BC groups have an annual levy that build up over time so that major works can be undertaken, often without the need to charge special levies in their place.
Anyone buying into older complexes should investigate the health of the books to determine how much is held in reserves.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by kay henry:*shoves Supa Freak off the perch* [angry2]
Hi Kay,
No need to behave like that there are still eight places left. [exhappy]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kate,
Welcome aboard.
Suggest you look at books by Jan Somers (Story by Story and More Wealth from Residential Property) as a couple of good ones to kick your learning journey along. Even though Jan does advocate a different investment philospohy to Steve McKnight there are many paths to IP investment – and you may find it to your advantage to consider the alternatives before you start out.
There a also list of books and comments by readers at
https://www.propertyinvesting.com/forum/topic/6845.htmlDerek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Shane,
If you are cashflow focussed and have sufficent equity to use for other ‘deposits’ then maybe.
Edit Inserted – But bear in mind lenders don’t do 80% lends as such you will also use more equity than would otherwise be required.
However make sure you check the figures out to ensure the good gross figures do not become marginal net figures. Often there are high costs involved in retaining and maintaining these units and what looks good on the surface may not be glowing underneath.
You will also need to check the management agreement that is in place on the property – some devil may be hidden in the detail.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Yorker (and others),
More than happy to email the sheet out to anyone who thinks it may be of use – just email me with ‘subject excel sheet please’ and I’ll send it by return email.
It’s purely a recording tool and doesn’t do anything special – but it is free – and my accountant appreciates it. Saves him wading through all my receipts.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by bennido:The apartment is not new by any means. My guess is that it was built in the 70s or early 80s (I think). I have been trying to get hold of documents relating to the cost of contructing the building so I can claim my share of the building depreciation. But so far no luck.
Hi Bennido,
Given the property is built before 18th July 1985 you will not have any building depreciation available to you apart from any major renovations done post 1992.
You will however have available some depreciable claims for plant and equipment which could still be sizable depending upon the individual property.
Ultimately buy or sell has got to be your decision. To me a sale after 6 months will see you lose too much in selling and tax – and if selling is right wait the 12 months to minimise CGT.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by camder:Where do I go from here ?? We have bought 7 properties since 25th March and have now all settled. Spent $620,000 and all are “positive” IP’s. Looking to retire in 4-6 years and estimate paying down $200,000 of initial debt over 4years.
Some opinions pls ??? Should we keep buying or should we concentrate on paying the debt down with the rent and also added contributions . I am having trouble working out if paying the existing properties down with the existing rent is better than letting more properties pay down more of a bigger debt.We also have a Neg Geared property which will offset some positive income(tax purposes)and should give us a much better growth than our country properties but of course it is not positive and costing us about $1200 per month.The correct answer will revolve around how much you want in retirement and whether or not your current portfolio – as is – will sustain itself and your ‘retirement goals’
By paying down one third of the debt it will mean your interest debts are proportionaly reduced and with some refinancing of loans you should be able to create some additional cashflow from within your existing means.
On the otherhand extending your portfolio will allow you to widen your income and capital base that may be more sustaining in the future.
The numbers (and your comfort levels/needs) will determine whether a portfolio extension is required.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Have sent one through – hope it is of use.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Bennido,
Nonetheless I am in the hold camp too provided that you do have the capacity to service the shortfall long term – if you don’t then I would only consider selling after the 1 year and a day time line for the 50% CGT discount has elapsed.
In the interim you may want to consider (if you haven’t already done so) the following strategies to maximise your cashflow; convert loan to interest only, ensure you have a depreciation report done by a quantity surveyor and submit a section 15.15 PAYG tax withholding variation to reduce your pay period taxation.
Collectively these three strategies could make significant inroads into that shortfall.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi BB,
Kalgoorlie is a community that has it’s own set of market conditions that are closely related to the performance of the mining sector. There have been periods with stellar performances and yet again periods with little or no growth. These cycles may or may not coincide with the wider property market.
Be aware that there are pockets in Kalgoorlie that should be kept away from at all costs.
Land in Kalgoorlie is limited by Native Title and mining tenaments and in some respects could be referred to as being in short supply. As such there has been some redevelopment of the larger inner city type blocks over recent years.
As a rule of thumb there has been a quantum lift in general housing standards in the area over the last 20 years with more and more high class homes being built there. As the regional centre it also services the outlying gold mining areas and also provides the government base for many of the northern and interior communities.
Boulder, apart from the golf course subdividion near the airport, has older style homes and most of these would require varying degree of maintenance.
Adeline is a no go area – the term ‘Bronx’ comes to mind when remembering Adeline.
North Kalgoorlie, Hannans and parts of SOuth Kalgoorlie (racecourse subdividion) tend to have the higher quality homes – mind you big $ to buy into these areas too.
Areas around Kalgoorlie central would be largely safe in terms of an investment. As always do your reserach, consider the neighbouring properties and I would angle for a Government Employees Housing Authority (GEHA – or whatever they are called now) leased house for the consistency of rent – IF I was buying in Kalgoorlie. Mind you expect a premium to be built into the price if you do buy GEHA.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
