There are a swag of basic checks to determine if a property is a good investment …. BUT, the psychology of the buyer is also part of the ultimate equation of whether to buy or not.

The decision rests on assuming a certain price range and ability to service debt. Again, the buyer’s characteristics enter, some having cash and some borrowing the…[Read more]

Past treatments are not enough until the nest is destroyed. As an earlier post said, they are often in the lower trunks of largish trees.

Get a recommended pro who will drill into trees until he finds the nest. Then he will pump in about 50 or so litres of poison and the nest is gone, the tree gets healthier and the varmints are gone.

Make…[Read more]

Since there is some crystal ball gazing going on here, it’s time to recap on reasons for the possible slowdown.

It’s patchy, say my agent contacts, some districts are still going gangbusters.

Consumption, as opposed to investment, is subject to all sorts of things but sentiment is most important, as it is with property.

When an international…[Read more]

Take a look at Hastings on westernport bay, near melbourne. It’s the last place you’ll find waterfront suburb homes within walking distance of the foreshore for 190k to 250k. It’s underpriced cf rosebud and the like.

For the record, BIS Shrapnel forecast the boom very accurately.

Only quality will be a good purchase for the next five or so years. Many regional centres will flatten out for a long time to come. There’s almost no upside left for anything other than equilibrium to settle in and a return to long-term trends.

Is world growth, and hence…[Read more]

Steve, re looking at Video rental stores, read page 18, Monday, Feb 9th, of the Australian Financial Review. If you must invest in a business, buy large coffee lounges with good staff.

An agent told me that when Ballarat agents return to fixed prices, or “offers up to..”, rather than the still common “offers above…”, then the market is in equilibrium again.

Another told me that late March will be when the 50% NOT selling at auction in Melbourne will have amounted to a large enough stock of unsold properties to reduce…[Read more]

Mornington Peninsula, Victoria.

I guess this will only interest Victorians, but, a few years ago a real estate agent told me, regarding some properties for sale by auction in his area, “Well, Sutherlands* are auctioning them so at least we know they are REALLY for sale” (His emphasis).

* Now called Sutherland and Farrelly.

In all these discussions which deal with selling and buying, I wonder how many people in Victoria realise that buying costs on a median priced property are around $19,000. Then to sell after 12 months, selling costs amount to about $20,000 inc GST (on a typical gain of 8% taxed at half the gain and a marginal rate of 48%), agents and…[Read more]

In Melbourne it looks like the wealthier and pricier the suburb and property, the more likely you see auctions. Toorak, almost all, Dandenong, almost none, (No insult to Dandenongians intended).

For those who are fixated on positive gearing, which is just a function of how much cash you put in yourself, I cannot recommend too highly the works of the Wakelin Group, in Melbourne. Specifically you should read “Through the Looking Glass, Residential Property View 2003”, pages 8 to 11.

I can’t paste them here because it is copyright but these…[Read more]

Because you have given someone such a long lease, you can’t get your hands on the business yourself so it’s compensation for that. Other commercial leases are 3x3x3 or something similar. Also, over 20 – 25 years you are going to have to put in some cash to keep the structure sound. As landlord you have to keep up painting, concrete, gutters,…[Read more]

I’ve done motels to death. I don’t want to be responsible for peoples needs on a 24 x 7 basis so I’ve never gone into one. But here are some rules of thumb picked up from agents, lawyers and seminars.

The ultimate aim is to own a freehold and lease it out.

They sell as leaseholds at a price which is roughly equivalent to the annual…[Read more]

There are two “Stamp Duties” in property, one, the biggie, is a duty on purchase and a one-off. The second is stamp duty for “stamping the mortgage document” which has to be done when the mortgage liability changes, such as when you top up etc. This second one is much smaller than the first. It could be the one your “Personal Banker” was…[Read more]

My observations over many years is that Kay Henry is right. The best example I’ve ever seen was in the window of a Peregian Estate Agent, which advertised one magnificent property for sale for $1.2m. It also said, “Currently rented at $220 per week”. The luckiest tenant in Australia, possibly the World.

This discussion makes me think that,…[Read more]

I’ve done a few “renos” and reccommend you read back copies of API. Their articles are spot-on. When you finish a reno it has to look like it belongs in the street and is in the top 25% or so of houses. It has to look inviting, not un-ususal. Buyers concentrate on kitchens, bathrooms and convenience. A good outdoor living area is a cheap but…[Read more]

There are a couple of issues about buying overseas. First the good news is that in the US, UK and a couple of others, the gross returns are around 6.5 to 7.5%, cf Australia at around 3%.

But exchange rate changes can defeat you if they move the wrong way. This is a minefield for Australians, not to mention the complex legals just getting…[Read more]

Several agents in the South Yarra, Elsternwick and Prahran areas have told me that the market is flat, or even a little down now. Note last weekend’s auction clearance rates were in the 50%+ range!

Time to cash up and wait for the bargains to appear. Apparently in Melbourne are a group of investors who can’t wait for Docklands to crash so that…[Read more]

I recently had a market appraisal that was spot on my own estimate after watching local prices for six months. Then the bank did a valuation for re-finance and came within 4%, which is OK.

However the bank valuer asked me if it was a new house, (it was a renovation of a 27 year old house,) and then he asked me what style was it. I said it was…[Read more]