Forum Replies Created
Hi Kingmike,
I am curious. Do you have any further details about the property eg location size and return. The reason I ask is there has been a bit of negative sentiment about the UK market (hate to generalize like that ). Your post is indicating that you believe the rental market is firming. Do you live in the UK.
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I agree with the others. Don’t make it personal and try to keep the tenant at arms length.
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Good Luck.
.Sorry about the plug but maybe you guys need to get on the same page financially. Playing the cashflow board game is a good way to find out what each party knows and challenges your assumptions. Work on getting rid of that 90k as part of an organised strategy. You will have heaps of fun too.
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Good Luck.
.Redwing and Dazzling are spot on. You need to go out and get some accurate information about rental values in your area as a starting point. Armed with this information you will be confident of the product you are showing to prospective tenants.
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Is the property local to you, interstate or overseas?Hi,
My point is that buyers have become far more cautious and savvy recently. Also, thanks to renovation tv shows, many have an unrealistic expectation of the costs involved and will therefore only see $30k worth of expense in option a). This may in fact be true if they are prepared to put in some effort themselves and live with the results rather than pay for tradesmen to do the work..
Very much agree with this.
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The other point I was making was that the builder just gets the wages regardless of what impact his efforts have on the capital value of the property.
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Ie there is no profit sharing unless there is some sort of JV agreement.
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Your point about wages in the building sector being cyclical is a good one.
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I base my support for the reno idea on personal experiences, however, these jobs can become money pits if you don’t know what you are doing.
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Broadly speaking at the lower end of the market you will need to do most of the work yourself. Redhaven seems happy to do this and seems to have some confidence in his ability to do it.
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Good Luck.
.Hi Guys,
However, you desire to earn $80k per year through buy/reno/sell at the same time as spending more time with the kids. Here’s my problem – most tradesmen in your area would have to work overtime to achieve that kind of pay in a stable market, so how do you figure you & your husband will be able to add more value and work faster than somebody with years of experience?Hi foundation. I’m not sure what you a getting at with that comment. Redhaven is taking about adding value and making capital gain, not working for wages as a tradesman. It is very very different.
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Most tradesmen I know would smash that 80k figure anyway. Sure you have the 6 till 2 then down to the pub sub contractors that work for large project builders as subbies. However, anyone working as a sole trader would certain achieve a higher wage than that. That’s just the builders not to mention the plumbers and electricians who are earning on average more than GP’s (last sundays paper).
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Redhaven, I think it may be viable for you to earn sufficent income to replace one wage through the reno/sell idea. What you will really need to consider is the entry and exit cost including capital gains taxes etc.
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You will be aware that you make your money when you buy. This will never be more important than when you are trying to turn a property over quickly. You will need to negotiate a low fair purchase price and possibly get access to the property before settlement for repairs. (avoid spending alot of capital on the property in this period in case things dont work out.)
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The most important thing about this idea is to be realistic about your costs and sale price. Try finding finished properties (to the standard you are going to renovate to) and compare them to yours. Make some offers on these to establish how much fat there is in the selling price.
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Keep your material cost dowm. Source building auctions and high quality second hand material. Negotiate everything and build solid relationships with your suppliers. Stick to a time line and budget and do one project at a time. Most of all have fun. Get the whole family involved.
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Good LuckHi Bornfree.
Yeah I agree. Well done for getting into the market. Seems like you have the right attitude.If you keep an open mind and stay willing to learn new ideas and keep your mind open to new opportunities you will do very well.
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Remain flexible and keep your eyes open.Not so long ago Peter Spann was in the forum answering some questions. I have read both of his books and found them to be very informative and motivating.
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Peter freely advised that his seminars are not for everyone and that there was no information that you could not get from his books. I respect him for such and honest answer in a public forum. However, others who had been to his seminars highly recommended them.
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These days you can get alot of these books on mp3 through amazon or sites like limewire etc. For people that do alot of driving or travelling on the train etc it really makes sense.
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I have heaps of this sort of material a freely lend it to friends and family. Sharing these resources is great for keeping the costs down and also exposes you to ideas that you may not have selected off the menu if you were making the purchasing decision yourself.HI DD,
It’s exactly like that in our suburb. You can rent brand new 3brm townhouses for 250-280 per week that are listed for sale at 510-600k. When we bought our home in the same suburb (2001) we paid 240k. Old fibro homes selling for 500k plus are renting for 200 per week. Just does not make sense to have a half million dollars of non deductible debt for the sake of a roof over our heads.
Good luckratherBfishn, I wish I had bought in portland in 2001 or 2002.[biggrin]
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I tend to agree with the others. There is no harm in consolidating your position right now. You may be better to sell one or both of these properties and get back into the market when you are in a better position to move forward. It would be better to have capital in the bank for a while than wait until you a forced to sit in the sideline through a bankruptcy.
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Good LuckHi Resiwealth,
Alot of the ideas you are talking about are in the millonaire next door series. I found them fascinating books to read for many reason. The most obvious was the way the data was collected. ie finding actual millionaires and asking them questions and following up with indepth questions in a focus group situation.
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Some of the ideas floored me. Like the examples of a deca millionairs wife still clipping coupons to find the best available croceries at the best price.The others like each had never paid more than x dollars on average for a car, ring, watch etc.
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There was also one about those with net worth over 10 mill buying their family home within x amount of time of a major stockmarket correction. ie at that end of the market the value of the homes has more to do with finding a buyer with cash than worrying about the general real estate cycle.
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Can’t remember exactly but I think the point of the coupon clipping was to teach the value of the exercise to the kids in the family so they may learn these important skills. If you have not read these books I recommend you do it.
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If you are the type that likes to listen in the car you can borrow my mp3 copies if you like. They are over 8hrs each in the unabridged version but well worth the listen.
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Frugality can be fun when you get into it. I would much rather save a dollar than spend it. .
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The reason is that option two gives me the freedom to spend it later on bigger and grander things or add it to the pool of investment capital and buy more houses.
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However, being frugal is just part of the equation. It is vital that you invest in growth assets. I would not advocate one form over another but it must be something you understand very well and have a passion for.
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Without understanding and passion it would be to easy to lose your way.
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Good Luck.
