Forum Replies Created
Variable or fixed really comes down to personal financial circumstances.
Is your sister someone who will fret about the direction interest rates may take? Is she someone with minimal spare cash after meeting all of her finaicial and living commitments?
If the answer to either question is yes – a fixed rate may bemost suited.
The key is not to fix for too long – personally I like 3 yrs max fixed rates. Seems to have a nice balance between flexibility and certainty. A key consideration if your sister fixes is that break costs can be very high so only fix after looking at the whole picture and considering a range of factors,
Hi Aj,
Definately not a financial planner – their training does not expose themselves to direct property investments.
There are a couple of organisations around that are endeavouring to get some accreditation & recognitiono of property investment advisors. Check out their websites PIPA and PIAA.
In a nutshell both organisations are endeavouring to 'clean up' the property investment 'advisory' industry.
I am half way through full accreditation with PIPA and I must admit I have enjoyed and appreciated the content to date.
Hi AJ,
You will still need to work out what you are trying to achieve so you can properly brief your buyers agent otherwise you may end up with a property that doesn't necessarily meet your investment needs.
Hi Mezma,
No harm in advertising that pets will be considered. Can only add to your pool of potential tenants.
Hi AJ,
Adding further to some of the comments above
If you do choose to use a 'company' make sure their philosophy and strategies suit your needs and that you are not made to fit their strategy.
Hi Sams,
In WA you'll pay stamp duty on $460K if it is a true off the plan property.
If it is house and land you'll pay full stamp duty on the land value if you purchase the land and then build a house on it.
Hope this helps.
Check your soil profile.
Some parts of WA have a signifciant underlay of clay and require some additional foundation work.
There has also been a tendency in some parts of WA to do infill projects over long established swamps and lakes.
PS. If you have a floor plan in mind make sure the plans will fit on your chosen block. On a similar note will the block fit an 'appropriately' sized property?
Hi Booge,
If you are borroing at 70% then the loan will be $140K. You will need a funds to complete of $70K being $60K deposit and $10K costs.
If you are purchasing the property with an 80% lend your loan will be 80% of $200K = $160K. Funds to complete of $40K deposit and approximately $10K costs will be required.
If you are borrowing at 90% your loan will be $180K. You will require funds to complete of $20K (deposit) + $10K costs (approx) and a further $3.6K (LMI approximate based on rough 2% LMI fee)
If you are borrowing at 95% then your loan will be $190K. You will need funds to complete of $10K deposit, a further $10K for costs and $4K (LMI at 2% of borrowings)
Please note LMI fee will vary to that shown above – I only use 2% as an indicative figure. As your total borrowings and LVRs rise then your LMI premium also increases.
At the risk of being howled down some things are more important than property.
For what it is worth I would enjoy the birth of your first child (congrats by the way) and let things settle down before revisiting the question of buying again or not.
By all means convert your existign IP loan to interest only but definitely take time and smell the roses.
Hi Dave,
Just as I stop looking at technology when I have bought the latest gadget for fear of seeing something better/cheaper I stop tracking prices in the suburbs I have sold property in. Can't do anything about it so need to move on.
For me the key issue is to go back to your original plans with this property and then see if the property has done what you wanted it to. If it has done so – sell up and put your money to better use.
Hi Patrick,
Agree with Terry – need to look beyond cashflow and look at the fundamentals of the area too.
Being end of year and start of a new year chances are the property will not be snapped up overnight. Sometimes you need to pause before rushing into something half prepared.
Been following the to lets in the weekend papers and they have contracted over the years to such an extent that the current to let in the papers are as short as I have seen for many years.
Newspapers, in my mind, are a more accurate indicator as there are costs involved with each insertion and therefore ads will be pulled as soon as property is rented.
A couple fo property managers I know who work in Vic Park area are sayign the same tjhing.
Looking good for stronger rents in the Perth market at the moment.
If the reported property shortage is on the money I expect we'll see rents further marching.
Put a clause in your lease agreement 'Pets only approved with prior approval of owner"
You can vet the type of pet permitted.
Hi Wade,
The issue fo rme is getting finance to do the construction when you are ready and meeting development costs in the meantime.
Getting finance for developments is not a piece of cake at the moment. banks often like to see a lot of pre-sales and the ability to get these pre-sales can prove a challenge. Make sure you have a good broker who is working with you all along the process to keep you on finance track as you go. .
Hi Wakebrown,
On a similar, but slightly different, note I wonder about the wisdom of having your portfolio so heavily Emerald focussed.
Puts all of your eggs in one basket – not my cup of tea and just food for thought for you.
Hi Andrew,
There are a group of 'educators' who regularly participate in wealth creation platform speaking events. The wealth avenues include everything from shares, property, internet marketing, e-bay marketing, social media marketing and so on. The list is almost endless. Aussie Rob does participate in these events along with the likes of Rick Otton and others.
A lot of the events are co-ordinated by Pat Mesiti and Greg Owen and each speaker endeavours to get as may people as possible. The events themselves are free and the speakers follow a formulaic structure which starts with some self depracating statements and ends with now look me and my wonderful ifestyle. you can do this too (approx 20 steps in between) – all you need is to buy this package, followed by some classic upselling strategies and is usually followed by a stampede, and I use that word deliberately, to the back of the room, credit card meltdown as there are only a number of limited special priced packages available today.
But in asnwer to Vet's question – I am aware of some people using Aussie Rob's system. They have kept their levels of 'success' to themselves.
Hi VK,
Cannot agree with that statement at all,
As a property investor looking to build a portfolio you need equity and cashflow.
Some would argue you can use the surplus cashflow to pay off your loans but to do this in a reasonable time frame your cashflow needs to be extremely high (relative to property price). In reality for most people they need growth too. Without growth your portfolio building will stall.
The other question you need to consider is what is your end goal?
imagine your target is $200K/annum (using a number from another post by someone else) how will you get there?
Obvioulsy you will need to replace the $200K with your number but the same process applies. .
Von Krumm wrote:Want to know where CF+ properties exist?I have been doing some research and cairns has properties (1-2 bedroom units) that are CF+ straight out the blocks.
But there are many properties on the market, often cheaper than 2+ years ago and what's not to keep them from falling further…I am lucky enough to have APM data nation wide and there is one property id like to discuss…
1 Bedroom apartment in cairns suburbs
Heres the price history:
1993: $83,000
2003: $49,000
2004: $87,500
2005: $106,000
Then it went on the market for $130,000 in 2009Dropped in 2010 then again this year…
On the market for 2 years it finnaly sold private treaty for around $75,000This has to be the time to buy something right?
My only concern is when it went back to $49k in 2003. Wow that's insane.
What rent are you looking at?
If you are looking to invest in the Cairns unit market then the property will have to be very cashflow positive to mitigate against the risks associated with investing in Cairns.
Cairns has had massive numbers of units built there in recent years and I am sure part of the probelm your price research has shown is due to the building surge of recent (and not so recent years)
Hi David,
Tough decisions indeed are required – much like the tough decisions some European Governments are required to make at the moment.
Can they do it? Only time will tell.
Watched an interesting documentary the other week which pulled apart the behind the scenes details about the factors leading up to the GFC. Now we all know about the sub-prime lending etc but what I didn't know according to this documentary, was the alleged misbehviour, compromised decisions making and so on by key banking personnel in teh years leading up to the GFC. The documentary outlined how a number of decision makers who were part of the erosion of banking and investment practices are now key decision makers and policy developers in signifciant political positions.
But alas – I cannot remember the name of the documentary. I am a watch it and forget the name type of person.
Another link on some apparent anomalies in US economy.
http://www.businessinsider.com/economic-numbers-important-2011-2011-12
