Forum Replies Created
Hi Grant,
Peronsally the DHA property are not something I would go after. If you are putting yourself in a situaton where you put miney towards the property each week out of your own pocket you need to ensure that the loss is covered by capital growth.
ie you pay now because you think that the property will go up more than it is costing you in the future.
I ma only suggesting this because you asked. I would start with a detailed money diary. You could use a spreadsheet and add up every sent you spend and where you spent it. You need to find out where your money is going.
Once you have done that do a budget and start saving. This sounds very simple but it is something that many people never get around to doing and then wonder where all their cash is going.
It is a good time in the property cycle for your situation. Property prices have leveled off and you can now save without hopefully being priced further out of the market.
I am assuming that as a fire fighter you have plenty of spare time (14 hrs shifts ect) so you could use that to your advantage.
When the time is right find a property that you could add value to through a cosmetic make over and start from there.
Cheers
Stargazer,
looks like you have some experience in property investing an have accumulated a bit of euity over the past few years.( the suburb you have purchased your IP in has not exploded like some but has shown some growth)
Good to see you putting your situation out there for people to examine. Did you do this to motivate yourself?
My advice is along the same lines as the others. You need to work out what you are trying to achieve and set some big goals.
I would suggest using leverage to get into a balanced property portfolio. Spread the risk around and focus on the management.
Cheers.
I have not heard of a person having a policy cancelled before now I come to think of it. This person must have remembered and event like that and been making a conscious decision not to insure.
In that case this person should probably question whether property investment (direct) is a suitable wealth creation tool for the.
No insurance!!! I mean what about the public liability side of things. What if the tenant injured themselves while in the property and not just burnt it down.
No ill feeling to this person as it must have been traumatic but we need to be realistic about the risk and responsibilities of being a landlord.
Best of Luck.
Thank inez,
There are so many variables in a deal like this. Firstly, we made our offer through an agent that we had dealt with before.
Although the market was very hot and the agent indicated that he had received offers of 105k I submitted a written offer of 100. In the offer I detailed info about how I would proceed with the deal and where I had secured finance and details about myself.
The offer of 100k was accepted. The agent said he put the two offers to the vendors and stated that he had confidence that although the other offer was higher I/we could make the sale go through and see it to the end. Perhaps this was because we had purchased properties via this agent before and had never pulled out of a deal dispite many obstacles.
Although we had finance pre approved as usual we asked a broker to source a better rate for us. We struck problems at the valuation stage. The drive by valuer stated that he would not accept this property as security.
That was the end of the line for that broker. It was all to hard for him after that.
We got straight on the phone to the agent and stated that we could make the deal happen but as the finance was going to be harder to obtain we would need a concession on price. We negotiated the price down to 95k.
I went down to the local building society and spoke to them directly about the property armed with some photos and was completly honest about the previous drive by valuation.
I had purchased my first IP through this building society when I was 21 and they must have been fairly happy with me because they gave me a 95% io stand alone lend on the property that the other bank would not even accept as security.
So when you see value in something there will be plenty of people that tell you that it’s the wrong thing to do or try to put you down. The broker was telling me I was crazy. Needless to say we do not have room in our lives for these sort of negative people.
The 4k represented the cost of materials and included $1800 to pay someone to sand the floors. I have done this job myself many times since and would never pay to have it done again.
Never underestimate the value of learning the hands on skills of property investing. This is especially true when you are first starting out.
Some people say that while you are doing the painting and hands on stuff the property deals are passing you by and you miss out on opportunities.
I find the exact opposite. While you are at the property people (locals) will come out of the woodwork with new info about deals and properties that are coming up, who is buying and selling, what is happening in the town etc etc.It’not hard to keep a mobile phone handy and keep in touch with agents about whats coming up.
It seems people are more willing to come forward with info if they see you are willing to get your hands dirty and have a go. A smile and a bit of courtesy with tools and noise etc also goes a long way.
You will find that neighbours will offer to lends tools, advice and even the odd home cooked meal. The value of being there is huge.
You will also get a much better deal from tradies when you demonstrate an understanding of the process and detail exactly what you want done and what you are trying to achieve.
Don’t let people tell you there is no money to be made in low end renos. This deal was done in 5 weeks so its not fair to say the market did all the work.
The best advice I can give for these sorts of deals is to develope a good gut instinct for value. Do a detailed costing and be realistic about your skills. Once you have decided on the deal ignore the negative and surround yourself with people who can help you get it done.
Cheers.
Hi,
We have had quite a bit of experience renovating during the period after exchange. I suppose technically the work we do falls more into the category of make overs to increase yield. Usually the materials cost of these sort of jobs are low and the time/labour cost is the most significant part of the job.
In 2002 we did a job on a house that we secured for 90k. We spent 4k and got the property revalued at 165k by the time settlement was due to take place.
This was a good outcome for us, however, the property was a deceased estate and ended up getting held up in probate and did not settle until April 2003 (we bought in november).
So during that time there was a bit of doubt.
We negotiated with the vendors (estate) to rent the property and receive the rent based on the fact that the property was not in a rentable condition when we had purchased it.
We got a tenant in at $180 per week and did not have to pay any finance costs for the entended settlement period. We ended up buying another and completing it before the first settled.
So the moral is if you are worth taking a bit of a risk then it can be a very worthwhile process.
Good luck.
Hi all,
Please do not underestimate the importance of management when investing long distance. We had a few problems early in our NZ experience. This was difficult for us because we had experienced excellent management in Oz for years. We now realise how lucky we are with the Oz property managers.
Since that time things have changed for us in relation to management. We have made some changes in the people we use and have made some changes in the way we supervise the managers.
Now we call the manager at least every 14 days ( more frequently if the property or tenant has issues ).
It can be difficult to keep track of insurance policies when there are multiple properties but it is something that must be done. We currently use the national bank and there policies self renew via direct debit. ie you get a letter saying that your policy has been extended another year when it comes up for renewal.
In this instance the fact that the insurance company cancelled the policy should have been a trigger to boot these tenants. I would take a vacant property over a bad tenant every time.
You need to make sure that you are getting honest and reliable feedback from managers as well as doing your part by making regular and diligent enquiries about your own properties.
If any NZ investors need a fresh set of eyes over their properties drop us a pm and we could organise some photos (good and bad) and a detailed inspection.
Once you know the true situation with your properties you will be able to move forward and find the best way to fix these problems and get quality tenants into the houses.
Best of Luck
Don and Liz
Hi Guys,
Just a few things to add to this. Investors should not worry to much about control of assests while using a NZ based complying trust. The way it works ( in a nutshell) is that you have absolute discretion (hopefully) to appoint or change trustees whether this be a corporate trustee or not. As well the NZ shareholders of the corporate trustee will have limited or no voting rights. So effectively no decision can be made without you.
The issue of residence for individuals or otherwise goes far beyond where you reside as others have said. Best to seek professional advice on this ( was about to try an explaination ) Although this area is straight forward the provisions are extremely detailed and I would hate to create confusion.
Cheers
Good Point. I have never been to a semiar but I heard that most of them outline what is going to happen and then have morning tea. Then all the people who feel they have been scammed can leave and get their money back. Is this the case?
If so why all the song and dance? Just go along and leave if it was not what you thought it would be. Simple.
Noone is forcing you to stay.
Cheers
Hi MA,
They were around but most of the ones in the older buildings were and still are company title. That’s why they were so cheap. There was one a few months ago in Crick Ave under 100k. It was a dog box and technically Crick Ave is in the heart of Kings Cross. However, your mail would still read Potts Point. You would also have junkies shooting up in your doorstep. Although, that comes with the turf I suppose.
Biggest opp would have been to Buy in St Neots Ave in 98 when studios were in the high 80’s. Not like that now though.
Cheers
we are down in Invercargill(feisty little city) The stags take on the British lions at Rugby Park soon. I don’t think it will be much of a contest (hope noone heard that). We will be “up the naki” or in the Taranaki Region of the north Island next week. Should be up that way for 6 to 8 weeks. If anyone is up there drop us a pm.
Cheers
