Generally I’d use a conveyancer, but if you have any special conditions then you might want to get a lawyer involved. I also reckon that you’re better getting a lawyer in NSW as, in my experience, you might want to be a little more careful there (different laws, especially regarding settlement times – you need all your ducks lined up perfectly!).

As far as having someone view the property, a buyer’s advocate will give you a better feel for the place whereas building/pest inspectors do their specific job. Most of the inspections are a checklist where you get a tick or a cross in a box, so you don’t get a great idea of the feel of the place. On the other hand, buyer’s advocates aren’t inspectors so you need to get the inspections done as well.

I recently used a buyer’s advocate and wrote a blog about it:
http://www.everydaypropertyinvesting.com/purchasing-property-four-benefits-i-gained-from-using-a-buyers-advocate/

Good luck with your investing.

Cheers,
Den

Hi Nathalie,

I'm sure lots of people would be happy to be your mentor, at a price! We do free podcasts which might help you get started in property investing. Head over to iTunes (you can search "investing" or "property investing" and look for EPI, or go to our website to have a listen. We release a new podcast every fortnight and there are quite a few in the archive – I reckon it's worth a listen, and it's free!

We also do mentoring, but that comes at a price.

Have a listen and see what you reckon.

And good luck with your investing.
<br /:)” title=”>:)” class=”bbcode_smiley” />
Den

Mate, you need to do some research!

Go to any of the real estate websites and have a look at apartments in the Toorak Rd / Chapel St precinct. Look at their rents too. You will find that 2BR/2Bath apartments and cottages start in the $400s per week and go up from there. Possibly $600 is a lot to ask although you might get it. Almost every time I’ve been told by a sales agent that I could get a certain amount of rent for a property, I’ve found I get about 10% less. Remember they want to make a sale!

Looking at the sales, there’s a whole page of similar stuff for under $650k.

Just do your research!

You also need to find out the size of the apartment and whether the second bedroom really is a second bedroom or more of a study. (I bought a two-bedroom place once and the second bedroom was so small it could hardly fit a bed in it!)

Good luck with your investing and remember that shiny and pretty with good views doesn’t necessarily make a great investment.

Den

I’m with Commonwealth Bank and I recently negotiated a further decrease on my loan. I’m now on 6.61% which I think is 1.14% below their standard variable rates. I’m happy with this but it’s not out of the question to fix part of it if I see a really good deal!

Den

With no real reduction in demand, and prices softening, there are more and more good buys popping up here and there. I’m starting to write a series of articles on where to have a look,beginning with an article on three areas in Melbourne where I think there are good buys right now. Feel free to go to my website and have a look (www.everydaypropertyinvesting.com).

Cheers, and happy investing

Hi Steven,

My advice for a beginner property investor is to avoid this kind of property. A few years ago I fell into the trap of buying something similar (I had 20% deposit and loaned 80%) because the numbers were great as far as cashflow was concerned. Not long after I bought the property the bank changed its lending requirements and would only loan 50% on this kind of property – due to its size, not its purpose. The bank said that for any property under 50 sq.m. they would only loan 50%, or allow the owner to use 50% as equity.

What this meant is that I could no longer access a considerable amount of equity. This dramatically reduced my ability to grow my portfolio as quickly as I would have liked to. While the bank might currently loan enough for you to purchase this property (are you sure they'll loan 90%?) they can change their rules and this could impact you the same way.

I would suggest that you look at more conventional kinds of property that you can be more certain will help you grow your portfolio. It's also less likely that lending rules will change for these more traditional properties.

I hope this helps you. Good luck with your investing!
Cheers,

Why not ask an expert to come and have a quick look? The amount you pay will surely be worth it in peace of mind…<br /:)” title=”>:)” class=”bbcode_smiley” />

I tend to agree with ALF1.

There seem to have always been reasons why property is about to crash in value, yet this has never really happened across the board in Australia. It certainly hasn't happened after such a considerable period of sideways movement.

If you're going to buy a property, the number one consideration is that the property you buy is not costing you an unsustainable amount of money NOW. Property is for the long term! Make sure the rent you get NOW is enough to manage the debt costs you have NOW. Of all of my investment properties, none have reduced in rent in the past two or three years. Some people may have had reductions but this is surely the exception rather than the rule, so as long as you can sustain your properties right now you should be fine.

In the long run, I can't see how property will decrease in value over time, in real terms. Put simply, population increases over time and available land doesn't. This causes demand to increase and with it price does as well. This, coupled with the fact that the average person now has more disposable income than ever before (and this trend of increasing amount of disposable income over time doesn't look like abating), means that people have more money to spend on property, underpinning its value. Furthermore, most current reports suggest that the projection for numbers of new properties is below the number required – further increasing demand. As long as demand is strong it is unlikely that prices will drop significantly.

So basically what I'm saying is that property might be moving sideways now and it might not be the best investment for a quick buck. But in 2011 what is?

In the long term, however, I still reckon property is a worthwhile investment. Just make sure you can sustain it's sideways movements now and it'll repay you in the long term.

And good luck!<br /:)” title=”>:)” class=”bbcode_smiley” />

As far as I know, this isn't possible. I'm sure your accountant would be able to let you know all of your options.

Good luck!
Den

I agree! Change your loan straight away so that this loan is your investment property loan (this is important for taxation purposes – you don't want to get your investment debt mixed in any way with your personal (non-investment) debt). Also, try to make it an I/O loan as soon as possible as this will increase your cash-flow from the start – every investor wants to maximise their cash-flow!!

Good luck!

Cheers,
Den