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  • Profile photo of EPI_DenEPI_Den
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    @epi_den
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    November 23, 2010 - 6:45 am

    Hey ediot123,

    First of all, welcome to the world of Property Investing!

    There are heaps of courses you can do, lots of books to read and all sorts of gurus out there. Surely there is someone who is bound to meet your needs.

    I started my journey with property investing about ten years ago and have slowly been building up my portfolio. I read a lot, and I hate reading! Nevertheless, I managed to build up enough skills to start devising my own strategies. There are a few things I wish I'd known when I started:

    1. It's great if you can buddy up with someone so that you can help each other on your journeys. I did everything myself and it's only recently that I've really found myself as part of a community. It helps heaps! Being part of a forum like this one is a great place to start. Find people who you think are reasonable, helpful and knowledgeable, and buddy up!

    2. Change your mindset – start calling yourself an investor. Rather than say, "One day I'll invest," say, "I'm an investor who is getting ready to buy my first property." The change in mindset is really powerful and it can help you make better decisions. I used to constantly ask myself, "Would a REAL property investor do this?" One day I actually became that real property investor!

    3. Sniff around before you make the decision to pay a lot of money for a course. There are lots of free places to get information, from forums, to podcasts (I make a free podcast with a friend of mine), to television programs and websites.

    Getting started can be daunting, but remember we were all there once!

    Good luck!
    Den

    Profile photo of EPI_DenEPI_Den
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    @epi_den
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    November 21, 2010 - 9:11 am

    There are also special savings plans that you can start, if you’re happy to wait a while… It’s called a First Home Savings Account and the government will put in 17c for every dollar you put into this account, up to $5k per year, plus you get interest. Furthermore, you’re taxed at 15% not your marginal rate. It’s a nice way to start saving, and there are other conditions but it’s worth investigating…

    :)
    Den

    Profile photo of EPI_DenEPI_Den
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    November 21, 2010 - 9:04 am

    Hey Brunowa,

    Your basic methodology seems OK. It should give you a reasonable result.

    Good luck!
    Den

    Profile photo of EPI_DenEPI_Den
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    November 18, 2010 - 10:07 am

    Hey Christine,

    I totally agree with Jamie and Illuminati – get yourself educated as much as possible. Those books Jamie suggested to read are all worth getting your hands on. You can also find quite a few good (and free) podcasts in iTunes, so take a look there (especially if you have to drive to work and can listen to them in the car).

    Also have a look at the magazine stands for property magazines, especially those with heaps of tables at the back. One of the data sets that often appears is the average yield for a certain area. For various reasons, not all the high-yielding areas will suit you, but it is somewhere to start. And remember there is a forum on here that gives tips and advice too!

    Finally, I highly recommend finding a friend who is also interested in property. Having a mentor or buddy is a great way to expand your knowledge, stay motivated and share your successes.

    Good luck!
    Den

    Profile photo of EPI_DenEPI_Den
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    November 18, 2010 - 10:01 am

    G’day Brunowa,

    I had a quick look at your figures and have the following feedback for you:

    * You’ve calculated your rent per annum at $480 per week for only 46 weeks of the year (your annual rent is stated as $22,080 which is 46 x $480). Is this reasonable? What are the vacancy rates like in the area?

    * You’ve used an interest rate of 7.5% on your loan of $480,000. Do you think this is wise considering interest rates are tipped to go up again? I personally think it’s worth factoring in a few interest rate rises. Call be pessimistic, but right now I’m doing all my calculations with 9.5% interest rates. I figure if a property looks ok at 9.5% then it’s ok! You don’t want to be caught short if interest rates start pushing upwards and upwards…

    Apart from that, your basic method looks find.

    Hope this helps!

    Cheers,
    Den

    Profile photo of EPI_DenEPI_Den
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    November 18, 2010 - 9:49 am

    Hey D,

    As far as I’m concerned, there are really only two reasons why it’s been on the market for so long;
    1. You’d like more rent than the market is prepared to pay, or
    2. The property manager isn’t doing a great job getting tenants.

    It’s just not worth having your property empty for long periods of time. Consider that two month’s vacancy means approximately $2400 in rent lost. Could it be worth dropping the rent by $10-$20 per week to avoid this kind of loss?

    You could also call a few property managers in the area to find out if they have potential renters looking for your type of property. Don’t be afraid to terminate the agreement you have with the existing manager if they’re not performing (but check the fine print first)…

    You’re absolutely right when you say that good property managers are worth their weight in gold – but they can be very hard to find!

    Good luck!
    Den

    Profile photo of EPI_DenEPI_Den
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    November 18, 2010 - 9:42 am

    I totally agree that finding positively geared (or at least positive cash-flow) properties can be done.
    My concern with the property Johnny1974 mentions is that it’s clearly not new and that it might pose some problems. You’d definitely want to get it checked out by an architect and be prepared to let go of the thought of buying this one if the report wasn’t great. There’s no point buying a property that’s positively geared if you have to spend a considerable amount of money on maintenance or repairs soon after you buy it – you’d at least need to factor that in.
    Location-wise, it’s not far from Hobart and the numbers certainly look good.
    Nevertheless, even if you miss out on this one, there are more to find – possibly some decent newish apartments in the Blacktown area (Sydney’s west) or some properties between Brisbane and the Gold Coast (Beenleigh, Eagleby). It all depends on your budget.
    Good luck hunting!
    :)

    Profile photo of EPI_DenEPI_Den
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    November 17, 2010 - 11:21 am

    Looking at the cycles I reckon it's worth looking at either Adelaide or Brisbane. Brisbane is, in my opinion, the most undervalued city in the country… Just a thought…

    Profile photo of EPI_DenEPI_Den
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    November 17, 2010 - 11:14 am

    Hey hey hey!!! Let's hold our horses and get back to the original topic here!!!

    Is there worse to come or are things looking bright? What are the fundamentals here??

    Let's think about this;
    1. The market has definitely softened, and interest rates look like they are on the up…
    2. There is still a lot of uncertainty…

    So what's different from the past?

    There will always be those who say that the crash is around the corner and you can always find a reason NOT to invest. How long are we all gonna wait?

    Ultimately, I reckon it's all about making sure you make some good decisions and keep your brain switched on! If you want to invest in property then make sure you do your numbers and keep a cool investor's head. There are still some great buys to be found. Take your time, have a good look, and keep some confidence.
    <br /:)” title=”>:)” class=”bbcode_smiley” />

    Profile photo of EPI_DenEPI_Den
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    November 13, 2010 - 1:24 am

    Hey Gronk007,
    Great comments!
    I have employed all of these techniques, as well as deliberately "pooring" myself by putting money in a term deposit that I just can't touch, and then working out how I was going to get by. I did it as an exercise but once I found out that I could survive on far less than I ever thought possible, my dream of a retirement in my 40s turned from a laughable pipe-dream into a reality.
    I'm 39 now and there's no way I'll be working in a full-time job (especially if I don't love it) when I'm 45.
    It's the simple things that work the best, and you've provided a great list. Well done.
    Cheers,
    Den

Viewing 10 posts - 61 through 70 (of 70 total)
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