Forum Replies Created
Afternoon.
Harcourts in Blacktown are good (02 9622 3299).
Is this near the property – always use a local agent.
Gidday.
I will:
complete 4 renovations/subdivisions
buy 4 more properties
By:
June 30, 2013
Gerry.
Hi Stephen.
Singer is right – don't get emotional. I hate to sound simplistic, however the key is to know what you want to pay after doing the numbers and before making an offer. If you have done your homework regarding local community amenities, land size, rental opportunity, proximity to infrastructure, building type and rental capacity in the area (vacancy and type needed (1 bed, 2 bed, etc)) – you are going to be pretty accurate about what it is worth. Set a walk away price and then set your target below that – go from that position. I am not the first to say this, but it's true, the deal is done on the way in so at the high point it's not worth it. Your homework on the property will tell you this number.
Finally, always alow for the cost of a refurb (if applicable) in the total as well as the closing costs – and you're set.
Hope this helps.
Afternoon izzgizz
Seems to me like this deal is worth persuing. It seems like you have got a price lower than what you would expect, rental lower than what you would expect and the opportunity to develop the site.
You have to aks yourself about the cahsflow and the ability to raise the funds you need to do all the extra work. Work it out now coz the deal is done now, not when you sell.
A coupls of pointers . . . check for averlays for a coastal area coz you may not be able to develop or strata the site. And even if you can the strata-ing can cost a lot more in the coastal areas. The other pointer is – maybe (and I don't know where this is coz you don't say) you are better of holiday lettting rather than having a perm tenant. I had a place in a holiday village a few years back and got $3kpw rent for Chris/NY and the same again for Easter and the about half that for Sept school hols. all that was better than a perm tenant – ad allowed me to use it outside of these peak periods.
Sensational idea – but not new I might add. Auctions are beautiful, becasue, as alotti syas, you stop when you want to. I’m sure you recall seeing HOT PROPERTY on TV when people say it’s not fair coz I paid $40k more than I wanted to. Why? That’s your decision. Why were you looking for a property at least $40k below what you were going to spend. Same for rents. This saves me having to put up a price.
I remember having one of my IP’s empty for 6 months only 3 years ago – last month the rent went up $10pw and it was empty for only a day. So now it’s my turn to profit and reduce my lazy money and unlock the equity potential.
Bring on the rental auction.
Gerry G
Sensational idea – but not new I might add. Auctions are beautiful, becasue, as alotti syas, you stop when you want to. I’m sure you recall seeing HOT PROPERTY on TV when people say it’s not fair coz I paid $40k more than I wanted to. Why? That’s your decision. Why were you looking for a property at least $40k below what you were going to spend. Same for rents. This saves me having to put up a price.
I remember having one of my IP’s empty for 6 months only 3 years ago – last month the rent went up $10pw and it was empty for only a day.
Bring on the rental auction.
Gerry G
Sensational idea – but not new I might add. Auctions are beautiful, becasue, as alotti syas, you stop when you want to. I’m sure you recall seeing HOT PROPERTY on TV when people say it’s not fair coz I paid $40k more than I wanted to. Why? That’s your decision. Why were you looking for a property at least $40k below what you were going to spend. Same for rents. This saves me having to put up a price.
I remember having one of my IP’s empty for 6 months only 3 years ago – last month the rent went up $10pw and it was empty for only a day.
Bring on the rental auction.
Gerry G
Arrowsmith, you will note that DLPP said that the Vic Govt won’t let the SD go in a hurry . . . it is going to reduce from 6% to 5% for certain price points in the very near future (I smell an election), however don’t get hung up on SD – the price of houses will rise by EXACTLY the value of the SD if the SD is removed. Think about it . . . a $300k house has approx $15k of SD added to the price for the purchaser – ie a total of $315k. If SD was eliminated tomorrow, at the auction on Saturday everyone bidding would simply pay $15k more for the house knowing they now had ‘extra’ money to knock out the other bidders. All that happens is the $15k goes to the vendor rather than the gov’t. Whether that’s a good or bad thning is another argument, but what I’m saying is that prices will not fall. And history has shown they actually go up because people feel richer and ultimately spend more – the ave price of the house goes up . . . usually exactly to the value of the removed SD. I might add that the REIV does not agree with me.
Finally, given that this issue applies to everyone, everyone has the same issue. Get over it I say.
You can buy a run down place, spend a little and make a lot. I have. It works. I pay CGT – it’s a nice problem to have.
May sound corny arrowsmith, but I suggest you read Steve’s second book.
Gerry G.
Gerry G
Hi Snowflake.
I Agree with alotti 100% in what she says.
The CF +ve aspect should be worked on based on a 10% and if it looks good try to reduce the cash down to only 5% coz you have a good deal. Never any less – even if you borrow 100%, make sure you have the 5% cash equivilant in reserve to allow for any downturns.
Gerry G.
Gerry G
Hi Islandgirl.
I too give a gift (via the agent) – it may sound terrible, but it is a hamper full of cleaning products – althuoght I do like the Bunnings Vouchers suggested by others. The reason for this is:
sublte – keep the place clean
helpful – let’s them clean up without thinking about it
reminder – the place is new (or newly painted/fresh) so keep it that way
tenant – has just moved in and often wants to clean the place b4 their furniture and posessions go in
products – I know certain things clean better than others. For example I ALWAYS, ALWAYS include ‘Pinoclean Bath Foam’ for the shower (and rest of bathroom too). This is simply the best, the only product for showers. I know once they’re hooked they’ll use it again and I’ll get a nice bathroom after they have gone
blokes – male-only tenants need a hand in this area (generally).Cheers.
Gerry G.
Gerry G
Morning Mark.
I find it interesting that you types ‘gaol’ instead of ‘goal’! Hmmm.
Anyway, the best start is for you to discuss your CRAA file and to start I would suggest you contact Baycorp Advantage in North Sydney – either direct or via their website.
They will help.
Gerry.Gerry G
No, the students brought their own furniture.
It was on Dandenong Road near CIT.Gerry G
Morning.
I purchased a house near a uni and then set about splitting it up into as many bedrooms as possible. Each bedroom had an indivudual key lock, and I put a bar fridge in each room and finally created a central ‘lounge’ for all to use. The rental proved to be nearly 100% more than the repayments. This attracted international students by the bucket load. They paid a year’s rent up front and for an additional $10pw they paid for the electricity account.
Hope this is reply. It can work.
Gerry G.Gerry G
Morning.
I purchased a house near a uni and then set about splitting it up into as many bedrooms as possible. Each bedroom had an indivudual key lock, and I put a bar fridge in each room and finally created a central ‘lounge’ for all to use. The rental proved to be nearly 100% more than the repayments. This attracted international students by the bucket load. They paid a year’s rent up front and for an additional $10pw they paid for the electricity account.
Hope this is reply. It can work.
Gerry G.Gerry G
Morning.
I purchased a house near a uni and then set about splitting it up into as many bedrooms as possible. Each bedroom had an indivudual key lock, and I put a bar fridge in each room and finally created a central ‘lounge’ for all to use. The rental proved to be nearly 100% more than the repayments. This attracted international students by the bucket load. They paid a year’s rent up front and for an additional $10pw they paid for the electricity account.
Hope this is reply. It can work.
Gerry G.Gerry G
Hi I-Girl.
I have 3 cashflow +ve properties. The downside to +ve CFP’s in my experience is that they have a very low capital gain – meaning it can be hard to borrow against the increased equity.
I would suggest you start by trying to find a neutral or slightly -ve property and then do the reno to make it posative. That’s what I have done, but unless you want to scan the country, my experince says this will take time. Heavens, you’re only 41, take you time.Gerry G.
Gerry G
It depends on the age of the property and the condition. If you think of a Queenslander or you think of a 1940’s ‘suburban’ 2 bedder. One is (usually) ornate and detailed, the other is boring – even if neat.
If you want to buy and reno, the timber is excellent. If you only want to renovate internally brick is superb.
Bricks you can render to cover up mission brown or ‘patching’. Timber you can replace board or do an extension and match faitly easily.
OK, all of that aside, assuming all is exactly the same I have found that timber is around 10% cheaper if it is a typical ‘suburban’ house. If the house is a 1900’s in ex condition, then it may be 10-15% higner.
I know this seems like a foot in each camp – but it is. Purchase the property that you want for the reasons I have stated above. If you’re only doin internals then maybe brick is better, and if it’s chaeper it may be the way to go.
Make sense?
Gerry.
Gerry G
Hi Jules.
Also, keep in mind in Victoria if you do not have individual metering (ie one meter per premise) then you will pay all the water bill.
Not having individual water meters is usually the domain of older properties; but doesn’t have to be.
I have one block of flats where there is only 1 meter for all the tenencies – and I pay all the water bills. (To put individual meters in will cost a bomb, so I take the chearper option and pay all their bills.)[exhappy]
Cheers,Gerry G
Good Afternoon.
I note that some members are thinking of switching their loans to fixed rates. I have been buying properties since 1984 and have never switched to a fixed rate; and in the times when rates were rising (mine peaked at 17.6%) and in the times when that same loan plumeted to only 5.5% I have always been ahead. Always. If you are at the beginning the loan’s lifecycle you want to think long and hard – coz that’s when you owe the most [blink] .
Now, I worked for a big 4 bank for many years [puke] and let me tell you they never loose on their loans (I don’t mean from defaulters, etc – I mean in terms of payments and profit off the laons). If they are offering a fixed rate, it is because their (1000’s – literally) of analysts think they will make money.
That said, they will be no doubt some members who have paid more in repayments under a flexible/floating loan rate, than if they had fixed. But never in my case.
The big 4 don’t make virtually $2 000 000 000 [biggrin] every 6 monhts AFTER tax and abnormals (ie NET profit) coz they’re silly.
My thoughts. [snitch]Gerry G
Dom,
Gotta agree with GoldCoastGirl – Vanessa hits the nail on the head. The gold in them there hills is being drawn, sure, but the properties on offer on the whole are housing for employees. The tirany of distance will always be a negative and you MUST understand the market you are trying to attract – or indeed the market that will force itself onto you.
Plenty of areas in Qld that will be easier to manage from your point of view and be quicker to flip.
