Hi XDans,

Like Richard – those sorts of faults in a building 4 years old is not a good sign. It will need further investigation.

You also need to double check the building warranty issue. From memory (and it has been a while) if the property is multi-story (above 4 storeys) or has an underground carpark then you may not be covered by the 6/7 yr warranty. I suggest a call to the NSW building authority.

But in answer to your query, warranty cover, if it exists will transfer to the new owner.

Hi Richard,

Not necessary – I just like to try and keep a light finger on the general market, including finance developments if possible. For me finance is the most important matter becuase of the different LVRs surrounding different property types and locations, structures and so on.

And while I am not a broker it is important I understand a bit so i can suggest what questions clients need to ask their broker. After all, I am not qualified to give lending advice.

Could be a good time for those looking to resolve SANF with certainty of expenses to lock some of their loans in.

Anyone locking their rates should way the SANF benefits with loss of flexibility.

Hi JL,

Following the predictions of the popular press who love the 'Hot Spot' phrase as a marketing tool for their magazines, website, email list, feature property article etc is not a recipe for success.

Property Observer did an analysis of last years 'hot spot' predictions in two popular property magazines – here are the results.

Hi Kris,

One of our properties was very suitable for the student market – 3 bedroom place.

When we bought it (mid year) we put the tenants on a lease which was due to end at the peak rental time for students. In case this was Feb/Mar.

After that we insisted on 12 month leases so expiry fell at the new university year. Worst case scenario would have been to time the lease for mid-year intake students.

Generally our tenants were o/seas students who often undertook summer school studies so there was no problem with vacation vacancies.

When making  your plans make sure you find out from the local institution when the academic year gets into full swing and when students start looking for accommodation. It is not necessarily a January thing.

Hope this helps

Aside from possible wrong price it would also seem that the unit is/appears small.

Can you remove some of the clutter (excess furniture, chairs, kicthen ware etc) to make the place seem more spacious?

What about a change to lighter colours to make the place seem larger?

Having curtains and blinds open?

A couple of strategically placed mirrors can make a place look larger.

Have you spoken with another agent. Some agents are LAZY – there is no other way to put it.

Hi SM,

You still haven't answered the question – don't panic as many would be property investors haven't really thought this bit through.

Basically there are those who aim to live off excess/surplus rent. Typically these people will pursue a cashflow investment strategy.

Then there are those who will look at a sell down strategy to realise their profits. Typically these people will pursue a capital growth type strategy.

Having said all of that, property investing isn't quite cut and dried and there is a point of balance which differs from person to person.

With those thoughts in mind your later comment suggests you will be more cashflow focussed than growth focussed.

The follow-up question is how much do you want?

Let's assume you want a passive income of $100K/annum (before tax) then your 10 properties will need to deliver an average income of $10K/property – $200/week.

Note this figure has to be surplus to costs.

Given the purchase of a PPOR is likely make sure you set your loans up properly from day one. Really important you have a good broker in your team.

Leave those ones for the brokers.

As soon as the property is available for rent. For a list of deductible items check out the ATO website documents here

Contact a Quantity Surveyor. Depreciator, Deppro, BMT & Washington Brown all come to mind. They will inspect your property at identify all of the depreciable items in the property including the depreciable value of the building itself.

When you receive it give a copy of your report to your accountant and he/she will be able to use it to prepare your tax return.

New v old. There is no straight answer – each individual has slightly different perspectives on this question. Given your property is 20 yrs old it will have reduced depreciation remaining. The key is whether or not it performs as you planned.

Probably note as the items needing repair were there when you purchased. You may be able to defer some of the repairs until a tenant is in place in which case they may be claimable. Suggest you carefully read the document I linked to above. This will help clarify the repairs V upgrades issue for you.

Send me an email to derek@eosproperty.com.au – I have one which is very simple but easy to use. I now have a book-keeper and she uses MYOB. But you are welcome to the spreadsheet.

I suspect there is so much more for you to be aware of. I must admit I am the type of person who needs to have a pretty good grasp on what I am doing before I make a move. It seems you are not – I would strongly recommend you spend a fair bit of time getting up to speed on some of the basics.

PS – Why Point Cook?

Hi Chris,

Not across all aspects of NSW RE tenanting laws but my first thoughts were you have been spun a line.

If the tenant is currently on a periodic tenancy give them 60 days + 4 days delivery notice of a rent increase as soon as you possibly can. I suspect this can happen before you take ownership – but seek some professional counsel on this.

If the tenant is on a fixed term lease then you'll have to wear the remains of the existing lease agreement. If the lease is within 60 days of expiry give notice of rent increase as soon as you can. The increase will take 60 days to come into effect.

If the tenant is a on a lease which goes beyond 60 days then you can give notice of rental increase no less than 60 days from lease expiry. If there is a review clause in  the current agreement you may be able to use this.

Bottom line is any rental increase requires 60 days notice.

Recommend you check out the NSW Tenancy Act – would be very helpful to you.

Hi ML,

The zoning is generally the sole determinant of how much a bank will lend. Activities on it will have negligible, if any, benefit to a borrower.

If you do start making money on the land it is possible that you will be able to negatively gear the land. Having said that the ATO does like to see some legitimate business activity taking – agisting 2 cows on 1000 hectares probably wouldn't be considered normal by the ATO.