Forum Replies Created
Hi Nick
I have a couple of properties in the western Subs of Melbourne (even though I'm based in Sydney). You're right – that close to the beach in Sydney would be worth a lot more.
Don't know much about Altona and up until recently I have been ecstatic about my properties in Melb however the last 6 months have seen massive rental increases for me, as well as values starting to move so I'm now not so unhappy about it.
Do the numbers – what return can you expect? If that's in your price range, it might be a worthwhile investment. Also, can you improve on it to gain more growth/return?
Can't help with specifics for the area – but perhaps some food for thought?!
Regards
HI
All my investment properties are units – I find that there's less maintenance with them. Having said that I've made money with houses too but don't tend to buy and hold because of the above. My personal rule is that the area is more important than the property itself and my units are all in good areas and I've made great capital gains (and currently good rental returns) on them.
Horses for courses!
Regards
I just ask the agent . Sometimes they're cagey but I always press for a price – I tell them I'm not interested in wasting time. I usually get an indication.
Regards
Megan
Hi Lilyhutch
There are a number of costs associated so I'm not sure if you mean council costs (which should be available from them) to the actual costs of the subdivision. The costs relating to the subdivision depend very much on what needs to be done. Are there existing services to the block, how far do you have to run them to the new blocks, do you have to do kerb and guttering, put in lights, water detention, etc, etc, etc.
The only way to know is to have the project designed then costed by the appropriate people – engineers Including stormwater, or a QS who can give you a ballpark figure.
Hope that helps.
Regards
Megan
Hi Johann
I agree with both Rob and John. To me it's all about leverage and the return you can get on the money you have available (cash or equity). Do the sums – if you have $30K in savings you can probably borrow foro another investment property and the capital growth of two would more than likely outweigh the capital growth from the one you have. Of course, you need to weigh up your cashflow position but do the math and look at likely outcomes then make your decision.
Hope that helps.
HI Lyndon
The Rental Bond Boards in each state plus Dept of Fair Trading in each state will have all the info you need and point you in the direction for the forms.
Intervew carefully, reference check carefully and inspect regularly and set the ground rules up front for what you expect – e.g. garden maintence is something that gets overlooked.
I've managed my own properties – mostly with good success. Good luck!
Regards
I believe it can be done through a JV agreement and had some advise from a lawyer recommended by my accountant re this which all seemed to make sense. JV agreements need to be set up so it does cost to do this. I can give you the details if you want to email me.
REgards
Have been in the same position myself. Sometimes it's just a matter of sitting it out. Depending on where the properties are, there's a thought that the market is about to pick up esp in view of the fact that up to 30th June there are huge advantages to making large super conts. Some of the banks economists are predicting that the market will see an upswing of purchasing after 1st July from super fund monies – and I'm inclined to agree.
As well, rents are on the rise – and have been for a while. There's not a lot around so you might find that your cf position changes too.
The other thing to bear in mind – as Terry quite rightly points out – is that cf+ properties are getting harder and harder to find so if you were to sell, you might find it hard to buy anything back that gives you +cf anyway.
I find that the path to investing isn't a graduated slope but rather a path with plateaus every now again while the effects of your investing need to be adjusted against you personal cashflow (hope that makes sense). Perhaps you just need to ride it out for a little while and revisit in 6 months time.
My thoughts – for what they're worth!
Regards
HI Rebecca
I'm not sure what you're looking for finance but we use an assortment of lenders – including private money. Solicitors often have rosters of clients with money to lend around the rates you mentioned.
Try the classifieds of Sat paper (Herald in NSW) There's usually a list of them in there.
Regards
HI
I agree with the above – the thing you need to ensure is that you don't overcapitalize esp. on a 1 bedder which is a bit more limited in growth than a larger one. I'm all in agreement however about the "worst unit in good block" strategy.
Have been looking for some of these myself.
Regards
HI Gary
I wouldn't get bogged down on the format – just use an excel spreadsheet for your financial plan – income vs expenses each year – and word for the other stuff.
Action is more important that having the right format. Plus using the above allows you to make dynamic changes regularly – which is how a business plan should be – a working document.
That's all I use and I've been investing and developing for 20 years.
Hope that helps.
Regards
Hi Micky
DIscussions on agents always get interesting responses. WeI've just had a 15 unit site to sell – had it with 3 agents for 4 months, they averaged 6 lookers each weekend – no sales. We took over ourselves – sold 7 in the first weekend and the rest in 4 weeks. My opinion is that just because you pay a good price doesn't mean an agent is going to do any better for you. In my experience I've done this because agents have argued that they will do a better job for the full commission. What a load of rubbish! Either they're prepared to sell you place for what you offer or they're not. At the end of the day, they want a sale as much as you do. Just because you pay them more doesn't mean they're going to negotiate any harder for you and if people think that they will, I think they're sadly mistaken.
We negotiated commissions on another site – got a great agent who made some sales in a timely way (still managed to sell most of this site ourselves too!)
I think you're right – when you have got multiples to sell you can negotiate. They'll still only spent a given amount of time yet they have multiple sales to gain from. Remember you will still have to pay for the marketing as well.
I'd make a time with all four – ask them for comparables (documented) and references and ask them to show you their planned campaigns for your properties. Put them on a limited agreement to see how they perform. I'd also want a clause to say I could sell them myself – but that's just me!
Best of luck!
Hi
Sure, you can talk to the landlady – it's worth a try. Alternatively, talk to some of the agents around the areas you like, especially about places that have been on the market for a while – those vendors are often more keen to "deal".
Because a lot of people still don't know about vendor financing, it scares them off so the hardest part is finding someone who will accept that it's a legitimate method of purchase.
Good luck!
Regards
HI
People make money from all of the ways you've mentioned – and more – in real estate. The thing is to do what you like, what you feel comfortable and what you KNOW how to do well so I agree that you should perhaps start looking around at materials to read and learn and then make a decision based on what sits best with you and what you can best manage.
There's no one answer unfortunately – although, for what it's worth, I like property development because the returns are great – IF you know what you're doing and you do it well and CAREFULLY.
Regards
As far as I'm aware, Investment Club finds properties for investors plus they have affiliations with financers and other supplies. I'm always a fan of taking charge of your own destiny.
HI Brad
Adrian has the numbers right – and a good philosophy – one that I've also supported however, at the end of the day, it all depends on your circumstances.
I've always founds the big "achilles heel" in the buy and hold strategy is the cashflow issue. The more you buy and hold the more cashflow drain there is – unless, of course, you find all cf+ properties – easier said than done and oftentimes not in the greatest of areas.
Personally, I'm still a big believer in buy and hold IF you can afford to. If not, don't sweat it, sell, take the cash and re-invest. Remember, it's all part of the bigger picture and while Adrian's number might well be right, you also may be able to leverage your smaller profit over the next few years to get a bigger gain.
We are in the middle of a development at present that I would LOVE to keep because of the potential capital gains (which are huge) but the cashflow drain would just be too great – and way to stressful to manage on a month by month basis. My philopsophy is just to cash in, take what I make (which is great money anyway) and reinvest in another site to leverage the money.
As you say, there's no one answer – hope you've got some food for thought!
Regards
Hi
You don't say whether you're financing the whole of the sale or only a part of the sale price. If your purchaser is getting first mortgage finance from another source, you will still, quite rightly, need a contract of some sort, (Vendor terms, Loan contract etc) for the amount owed to you.
You should also think about your own protection of the funds left in the property (caveat, second mortgage?)
Each state has different laws and you need to be compliant with the Consumer Credit Code as it applies to your state. Check with the Fair Trading Office (or whatever they're called in QLD).
We sold 4 properties last year on Vendor Terms but for the deposit funds only (purchasers borrowed the other 80%). It's a great way to sell, esp, in the first home buyer market.
Remember, to keep it professional and dot all your i's and cross t's in case of any problems down the track.
Regards
Gavin
I agree with the above posts. Seems very cheap. Designers are, of course, cheaper than architects however a word of caution – make sure it's "horses for courses". If your development is in the higher calibre range, you'll need to go more upmarket. You don't want to build the cheapest looking place around – no offsense to designers but they sometimes don't have the attention to detail and scope that architects do.
I'd also check as to what's included in the quote – there are often additional costs to be incurred – Basix certification, struct engs, landscaping pplans, Statement of Env. Effects, that will be needed either with or after the DA submission. Also, does your quote include construction drawings or are these additional?
All things to remember when working out your costs (and therefore you feasibility and profits!)
Hope that helps.
Regards
New tiling will make the biggest difference – you can do a lot with a simple white tile with one wall of feature or a vertical strip of nice features in a contrast (but neutral) colour.
Can look really great and add $$$$ to the value. Also, taps – try the auction houses. You can get vanities and taps there. Also nice toilet seat (not the plastic rubbish) – often looks more expensive.
Personally, I'd do away with show curtains – very old hat.
Good luck
Had a Similar problem myself with some townhouses I had in ACT. Agent had for 6 months – not one sale. Took it into my own hands and sold 6 in one weekend. It's all dependant on effort in vs results out and the agents are always the ones who will focus on your property.
Try some "creative" strategies to promote – what are you prepared to give or do for propsective purchasers. Also, lots of marketing – it's a numbers game.
Good luck.
Megan
