Forum Replies Created
Hi Highflier,
This is a method that some people are aiming for in their ‘retirement’ – whether it suits everyone well that is a different matter. I am regularly in touch with someone who is currently doing this with success and no problems.
My initial aim is to acquire a portfolio of properties with a low debt/asset ratio so that I will have a number of options up my sleeve – from a line of credit set up & structured before retirement through to Steve Navra strategy through to a sell some and live of the rents of the others (Jan Somers strategy) through to sell the lot and live off the proceeds.
Already in the last two/three years we have seen major banks introduce the concpet of reverse mortgages, an increased availability of low doc and no doc loans and so – so an asset rich client – no dramas.
Whichever option you ultimately choose you will be constrained by the need to ‘spend less than you earn’ – this limitation exists with a growth related retirement plan equally as it does with an income related retirement plan – mind you it also exists in a working life too.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Getahead,
Responsibility for insuring the property after the initial contracts have been signed varies from state to state. In New South Wales, Victoria, Western Australia, South Australia and Tasmania the onus is on the seller to insure the property until settlement. In Queensland and the Australian Capital Territory the buyer is responsible for home and contents until settlement. Your solicitor/conveyancer should advise you about this.
Source realestate.com
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Sonja,
I must confess I know nothing about Warren (or his package) but based on Jamie’s comments it would appear as if he is based O/S – and as such some of his strategies may need adjustment due to different finance and/or taxation laws between here and there (wherever there is?)
Before rushing off I would recommend you seek professional advice.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Bid,
Income is declared and costs claimed in proportion to your ownership ratios.
In the example given above 99% of the income is declared on your return and 99% of the costs are calimed by you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Devil,
Some interesting suburbs in that lot.
Comparing Sydney and Perth is not terribly valid – sure entry level prices are more affordable in Perth than they are in Sydney.
But on a question of growth Sydney wins hands down – 20 year average (83-02) around 7.9% compared to Perth 5.1%. That, almost 3%, makes a considerable difference.
Or put it another way Sydney’s growth over 20 years was 461% whereas Perth’s grew by 330%
In 1983 Perth median prices were 59% of Sydney’s median and in 2002 they had dropped to 47%.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Pursefattener,
I certainly would make the phone calls and talk to the experts on the ground over in NZ and identify who you want to contract.
Talk to them about the property and they should be able to give you an indication of whether or not it will be getting a report done. As laws differ between Aus & NZ it would also be useful to refer the matter to a NZ savvy accountant.
Then when settlement is effected and the property is yours you can get the wheels in motion if it is going to be of value to you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Devil,
Once you go over 80% you are generally at the mercy of the mortgage insurers – and as you have found out there are times when they do say ‘no’ even if the bank said yes – after all they carry the risk.
Based on your description and your other post I would suggest it is the property you purchased that caused the stress.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kay,
Reserve Bank board meets on the first Tuesday of the month and any announcements of changes are made on Wednesday usually without much in the way of comment.
This week is a little unusual as the board will also give a March quarter report which by default and because of timing may give a more definitive indication of interest rate moves.
By way of comparison the US Reserve can meet at any time – and my prediction – when Greenspan increases we will follow accordingly.
I fixed one loan in August last year 3 years @ 6.06% and have just fixed another at ~6.7% also for three years (I am yet to see the paperwork on this one – so number may be out a little)
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Devil,
I wouldn’t touch the units in Wembley with a barge pole. There are som many of them and there is no unique or WOW factor to accelarate their growth.
I know of people who have owned units in the area and have made no money over a long period of time.
The availability of future and long term tenants would have to be questionnable as Edith Cowan University has moved its campus out to Joondalup and as such the tenant pool took a major hammering.
There are better investments in Perth – get another REA.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Pursefattener,
As a guide:
A depreciation report in Australia can be purchased through Deppro for ~$440 when I last bought one. Scott (AKA Depreciator) charges around $700 (from memory) and will refund the fee if they cannot get refunds with a value higher than their fee.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Joni,
Congratulations on wanting to ‘do something’ for your future – you are already ahead of the pack. The challenge is for you to actually do something as distinct from someone who just wants to do something. There is a big gap between wanting and doing.
I would advise you to work out what you really do want to achieve and how. There are many ways to invest in property and not every method suits everyone – so ultimately you will need to determine what suits you.
Your decision here could also determine whether or not a trust is required. It will also give you time to find good team members such as a broker and accountant and maybe even a solicitor to assist you with the legal side of things.
Make haste slowly here and it may end up saving you considerable sums of money later on.
For me I would buy a property that suits your beliefs and philosophy and hang onto it for the long haul. Buy and hold it and learn some of the finer details of investing – buying a property is only one part of the equation.
As time goes buy you can then explore more property investment strategies as your knowldege levels improve and your expertise and experience grows.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Realdeal,
You have asked the same question in this link
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=9939
Sugest you delete this thread so the repsonse to your question are in the same thread
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Pursefattner,
I was anticpating some of the New Zealand investors may have been able to point you in the right direction with this one. So I’ll be upfront in saying I am only passing on ‘what I have heard’ and as such you will need to check the situation out.
As I understand it any tax deductions you earn in New Zealand can only be offset against New Zealand income and as such they provide no benefits to your Australian Property.
In answer to your question may I suggest a look at NZ Tax Office website and possibly do a search for NZ depreciation companies. They will be better placed to provide more accurate information.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Realdeal,
I think you need to work out what your investment beliefs and philosophy are as this will largely determine where you will invest.
I am sure that experienced investors will find a suitable ‘deal’ (according to their beliefs) almost anywhere – however whether or not it is a good deal for you is another matter – and that is where you come in – are you a growth or income investor?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Robo,
Certainly younger families with kids in tow would almost demand a bath. Whereas it is possible lots of singles or students or young marrieds etc may be perfectly comfortable w/o a bath.
I would seek the counsel of a local PM (not from the selling agency) to find out what the demographics of typical tenants in the area is. Ask them how difficult it is to rent a property in the area without a bath and what effect, if any, this has on the rental returns.
Depending upon what your research reveals this will determine your course of action. Locality wise the property sounds OK – and maybe the lack of bath could be a bargaining chip for you to use in your potential negotiations.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Nandos,
It seems to me you need to listen to your alarm bells or take extra steps to ascertain they are bona fide. Based on your comments to date this is difficult to imagine.
If you are this wary it is highly likely you will continue to be dubious for some time. As property should be considered a long term investment then you may well have many years of ‘have I do the right thing?’ questions floating around in your mind. This has the potential to make you extremely uncomfortable.
My impressioon from reading what you have said is that the two are somehow in a ‘relationship’ and they will each only earn a fee on a property you purchase in Gladstone.
PS In terms of your property manager in Melbourne issue – you will need to provide an area to refine things a little. You are better off with a good property manager in the neighbourhood in which you own property. Vacancies are likely to be shorter if the PM has a presence in the local area and can pick up passing traffic.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Russ,
To me friendship comes above any possibility that I could make something out of their situation so to me this is a no brainer scenario.
After commiserating with them and offering my apologies I would also tell them not to do anything with the house until they had spoken to me.
After talking to them when they are ready I would talk to them about the two options which basically could be classified as ‘sell’ or ‘keep’ it.
Plan 1.
Help them to use the property as a part of their investment portfolio – or how to start one if they hadn’t previously considered RE.Plan 2.
Ensure they do not make a hasty decision and ‘give away’ the property to someone trawling deceased estate sales.Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Karen,
It is highly likely that you will have to look further a field than your immediate area and you will have to develop relationships with real estate agents in the areas of your choice.
Find an agent you are happy working with and talk to them about what you are seeking – be firm in this – and they will, in all probability, give you a call when property matching your criteria is listed or known to be coming onto the market.
It is highly likely that searching the net and/or looking in the weekend papers is not going to be particularly successful – in my experience stuff that is ‘good property’ gets picked off very early and will often not even get listed.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Avranjes,
This topic is being discussed in another thread – here is the thread.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=9746
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Shane,
You need to look a little further than simply looking at your weekly cashflow on your existing properties.
Sure they may be ‘costing you’ money each week – but if they have grown by more than they cost then you are in front – consider it a little like savings and placing money away to be used later or even better releveraged into something else.
I would also ask have you taken every step to minimise the weekly outgoings; depreciation report, interest only loans, tax variation completed, maximised rent etc If you haven’t considered these matters then address them and then see where you currently stand.
Now back to your original question – you will be surprised by your borrowing capacity.
I wonder how extensive your investigations about your borrowing capacity have been. While you may believe, or your lender has said no – there are a number of lenders out there who will, in all likelihood, be able to find you a symapthetic lender with policies more suited to you and your situation.
Lenders will consider your total asset value and will consider a large percentage of your rental income. They will also consider the expected rent whenever you apply for a new property loan.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
