Fundamentally locking in rates isn’t about gambling on the variable vs. fixed pricing – but the long term certainty in your interest costs

Agree Corey. It’s about looking at your portfolio and running some “what if” and “how much” scenarios.

Hi M&S,

When it comes to red flags the advice I would give if asked is trust your gut. After that what I would do if I was new to an area and trying to work out if a “problem property” was a deal is do a bit of digging.

The first thing I would to is try and find a comparable property that was in tip top shape or the condition your would bring your property up to. Get a realistic value of the property buy either finding out the actual sale price or look at the listing price and do some extra work.

Next get some estimates to fix all the issues that have come up ( these need to be fixed price tenders before you commit to the purchase).

If your purchase price + plus closing costs + renovation cost is less than the value of the comparable property your are in front. If not move on or simple purchase a property without the issues.

Mould and damp are one of the most common things tenants complain about and damp houses are generally unpleasant. Cost to fix are usually hard to gauge.

Probably better to start with something that is “ugly” but if push comes to shove you could fix yourself or organise cheaply, that is, paint, carpet and fittings.

I have read some articles and I think that Terry is right. Probably I should change my accountant :( not very happy that she gave me wrong information..

If anyone knows it will be Terryw . Give him a call.

Liana . with your budget I would perhaps consider the central coast NSW. You are 40 to 90 mins drive to Sydney. The market is very diverse so you will have to do a lot of home work on locations. Some areas have peaked while others are in the mid part of an upswing. There is a lot of potential. There is still a tone of property available where you can manufacture equity after you buy. If you are a passive investor who just wants completed stock and sit back and pray for growth it may not be that great. If that is what you what to do I would spend a few hundred dollars on hotspotting reports over at Terrys sites and research some areas then go and buy a median priced property with high depreciation benefits. If you want something you can sink your teeth into and actually invest/create something then I think the Central Coast is the way to go. Yields: A property for 320 will probably rent for around 320 to 400 per week. Having said that I hate to generalise. Even in Sydney there will be areas that will continue to grow solidly for the next 5 years and to talk about one “Sydney” market is false as there is no such thing in reality. There are plenty of people who still hate on the central coast and I am biased because I live there so you have to take both sides. Not sure about the rules on links anymore but here is the link to Terrys site. https://www.hotspotting.com.au/ Worth a look. It has been a few years since I have purchase a report but I found value in them at the time.

Who knows you may end up investing somewhere completely new and it will be an exciting life adventure as you learn a new location and a build a new local team.

Cash flow is oxygen when building a property portfolio particularly if you want to delink your “JOB” from your ability to invest.

• This reply was modified 9 years, 9 months ago by  Don Nicolussi.

The quote and proposal is a good development as you will see what the broker receives from the lender and also their fees if any at the outset. Often the broker will discuss fees, commissions and clawback (the fact that the bank simply takes back the commission if the loan is discharged within certain time periods) as part of the initial conversations and then develop this more if the customer moves toward application. I don’t charge fees but in certain circumstances I think it is entirely reasonable if brokers do. Most of the brokers on this forum have property investment experience that is far outside the scope of the general broking population. Some brokers don’t invest and some don’t own homes and never have (true).

That does not mean they are not or could not be good or even great. Although, I doubt you would get the passion and experience that you need from a non investor. When it comes to fees I think it has to represent value to you. For example, Stuart has an invitation only brokerage and then others such as Terry have multiple qualifications while Richard has many years of investment experience (much of it in niche and complex areas) to marry with his service. With this type of person there will be service overlaps where the value you receive would will be far above the broking transaction itself (there are others on forum that offer other complimentary and additional skills as well so sorry to those I have not mentioned this time). A fee would be entirely reasonable when you are receiving this additional added value.

• This reply was modified 9 years, 10 months ago by  Don Nicolussi.

You need to build rapport with tradies – not get them off side.

Haggle everything always.

The trick (and its hard don’t get me wrong) is to get a better price while maintaining a good relationship.

I also come from a building family. The trades time is money. The more time they have to spend on bs the less time for work. There are things you can do your end to help:

* make access easy
* return calls and be easily contactable
* pay on time
* clean up
* don’t double book trades

Also, make sure you tell the trades that price is important at the outset. Some trades have a precise quoting process and some individuals are just simply going to charge based on supply and demand of their services.

If you don’t need a job done for 6 weeks plan it now and get someone booked in for then. It will help them out to know they have work for March booked in and you may get a better price.

Don’t negotiate over the phone or email. Waste of time. Hope that helps.

• This reply was modified 9 years, 10 months ago by  Don Nicolussi.
• This reply was modified 9 years, 10 months ago by  Don Nicolussi.

OO = owner occupied
SMSF = Self Managed Super Fund
NRAS = National Rental Affordability Scheme
PM = Property Manager

I have a Martin Ayles course somewhere. Although I have just moved house but I am sure its somewhere.

Hi,

* Move non structural walls in properties with wasted space to turn 2brm home into 3. – A lot cheaper than you would think. Increase yield and equity if done well.
* Introduce natural light – windows, skylights
* Subdivision – get to the approval stage without doing
* Find properties on the market (comps ) that you aspire to be like that have the same bones as yours – devise the budget to copy and see what the cost versus equity gain might be. Would have to back this up with sales data as opposed to just listing prices

• This reply was modified 10 years, 1 month ago by  Don Nicolussi.