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Hi,
I have previously owned both vendies and a laundromat – go with the property.
Vending machines –
*very high capital to get new machines
*takes a lot of time finding sites
*if buying existing sites t/o is never anywhere near as good as what it is suppose to be
*you have to be constantly available to respond to service calls
*most service calls will be someone has done something stupid (most of the time trying to rip the machine off) and always the day after you last serviced it
*if you do it small scale more likely to have stock go out of date, you will get some flavours that you can only put into one machine
*large scale going to need to buy a van/truck (tried to do it with a sedan – i wasted so much time and money driving backwards and forwards)
*lots of competition – can very easily lose a good site. Had one site where i had 3 machines total value of nearly $20k, employed a new manager whose partner ran a vending business and I lost the site overnight. Then had 3 almost new machines (I purchased them 2 months earlier to upgrade my machines to keep the site happy) lost a fair bit selling them 2nd hand when I didn;t have time to find a new site.Laundromats
*got to be able to open and close them each day. I found they had to be open by 6am and closed at 10pm, any less you lose business, any later well the security tapes make for interesting watching when the camera and DVR dont get stolen
*Some people who use them are disgusting pigs leaving the machines in a condition that no one else would want to use them. These people will tend to do this just after you open them.
*Vandalism – people are happy to do $200 damage to a dryer to save paying $2 to dry their clothes
*You will spend many hours cleaning, coming in to see someone has dropped a meat pie on the floor that everyone else has walked through, a stubby that has been dropped and broken with beer everywhere
*unconcious junkiesThat leaves the property
Go for it, with your job it should be easier to pick up a great little buy. Go for something that has large land value, which might by sub dividable in the future, close to shops and schools. With your 2 properties combined your cash flow is almost netural so funding any futre properties shouldn't be to bad, especially if you find something that is CF+Which is what Glenn said to start with
Hi agaain,
from you last post I'm assuiming you are buying a $250K IP. If you have a $200k loan secured against the IP and then a seperate loan account of $50k secured against your PPOR which all funds drawn from this account have only been used for investing purposes then both loans will be tax deductable
Hi Cosmic,
Need just a little more information. What is the value of your PPOR and the current loan value. What price range are you looking at for a IP
An example of where I currently have my PPOR – purchased off the plan ~2 years ago. GFC occurred prior to settlement. Resulted in 12 out of 60 units not settleing back in January when complex was completed. Today, 5 months since initial settlements, 3 of the properties still listed for sale by the developer. All of these were sold originally. There is an identicle complex next door to us by same developer. They have just recently started settling with similar numbers being resold by original developer.
I know a couple of people who had the idea of flipping who are now living in the complex due to the change in the economy. Very hard to predict what will happen so far into the future, and if things head south these projects will make things harder to get of due to many other people being in a similar position.
just an update for the thread – shorting financials in Australia in now allowed again (has been for about a month)
I know virtually nothing on this topic but one thing that jumped out at me was he has but false information on the application. By him listing your address as his post office box he has made a false statement. To prove this you will need a copy of the application or some other evidence. I'm not sure whether you could look at the criminal side of things if this is the case
If something has a "long secure" return attached, most of the time this been priced into the original sale price. So initial capital growth will be reduced as a result of this. After this then capital growth should return to normal and be dependant on factors such as location, rental vacancy, etc
If the figures you are working on are 2 years old it is worth starting from scratch with you research. The world is a different place to what it was 2 years ago. Your broker was spot on about those rates, but they have since changed. The yields have also increased in many areas (mostly due to falling property prices and rents locked in with long term leases). There are areas where yeilds start from 9%.
To invest in commercial property you will have to willing to risk some capital. The way of reducing your risk is by doing your homework.
A good starting point is to look around at different types of commerical property in different areas. Find out what the current yields are, details of the lease and the company leasing it. Then go and speak with a broker and get current rates.
When looking at the properties weigh up the different options. You could have a brand new shop built specifically for a particular tenant on a busy road close to the CBD selling for the same price as 8 industrial units in the outter suburbs. Whats the chances of all 8 units becoming empty compared to the 1 shop. If the shop becomes empty how easy is it to relet if it has been custom built, compared to releting an empty unit. Research the company and industry of the tenant as well as the area. Is the company a national brand or a small family buisness. If it is a large national business is it possible they may consolidate and merge multiple locations? Is it in an "recession proof" industry ie a wholesaler of medical supplies.
Using a family trust will be beneficial once purchased but will not make it any easier to purchase the CP.
Once you have done all of the research and worked out what capital will be required (normally 30%) then you will have to make a decission on your level of comfort with what you are risking (ie a loan secured against your home) compared to what the benefits are (possible CF +ve and future growth potenital).
If this is something that you aren't comfortable with then it may be the wrong investment at the present time. If you want to get into CP in the long term without risking PPOR then you could look at investing in residential properties and building equity so in future years you can use your IP's equity to secure a CP.
In the present climate, the banks aren't willing to take 100% stakes in something they don't get 100% of the profits.
If you do loose your job do you still have the capacity for the repayments?
Hi,
A bank wont charge you any extra because you went through a broker and the brokers service is free. A good broker may even get you a better deal then just walking into a bank.
Regards
Jaffa,
To prevent x-collate you need to take out a 2nd loan on your 1st property. This loan then funds your deposit so your LVR is @ 80%. The two loans dont even need to be with the same lender, who ever will provide you with the best value for each loan.
Mmm, smells in a house.
Having been a volunteer ambo I have been in houses thinking its going to take alot of work to get rid of that smell.
As you suggested it could be urine, it could of had a body left in the house for weeks or simply a dead rat in the roof. I would first check the roof cavity to elimante that posibility. If the house isn't on a slab it could be a dead animal under the house. Something inside a wall cavity. You will need to have to house openned up and aired out to try and find what areas the smell is strongest.
Paul,
Finical planners can be remunerated by commision or upfront fee or both. I believe there is a push from somewhere to eleminate commisions over the next couple of years to improve the integrety of the advice.
Kooz,
There are many different advantages going with a broker over a bank, if the broker is well trained and knowledgagle. Most brokers should be able to recommend good products for you. They will cut down on the time to "shop around" different lenders comparing different products with different conditions and fees. If your broker is proactive they should be able to keep you up to date with the progress.
If your income doesn't all come from 1 employer paying you wages then a good broker will also know how different lenders will treat the different forms on income or the time frame you must be employed with them for. If you have defaults on your file then brokers should be able to notify you of lenders who are more or less likely to consider you application.
The main advantages come into play when you start getting into investment properities, or wish to in the future. If you go to the banks they will try to tie all of your properities (PPOR & IP) together in the same mortgage documents. If one property loan goes bad the bank can choose which property/ies they sell. Good mortgage brokers should be able to set up loans to ensure you get maximum protection and maximum tax benefits.
Anyone can ask a bank directly for a discount on their home loan. Good mortgage brokers will also get discounts for their clients as they should know what a lender is willing to offer
GOM…it's a creative way for a 1st time poster to advertise
From what I understand, there has been an issue that many people of complained about to the body corp. They have tried one method that has failed to keep people out so they are now going to hit up people doing the wrong thing with a fine.
I'm not allowed to park in a no standing spot, if I do i get fined. This company is contracted to fine people who aren't parking correctly. They need to use some sort of system to determine if a car is located in its allocated bay, hence the parking permit. This to me seams the simpliest way to help fix the problem.
The investigations into this company ( I assume) relate more to how they collect money from people who have been issued fines. If you park in you carbay displaying your parking permit you wont have to deal with how they go about collecting outstanding fines.
Many companies, organisations, councils and education facilities have used parking permits for many years. With peoples attitudes changing more nowadays to not caring about others and just parking where ever it suits them, more and more people are finding their residential parking bays getting used illegally. More people in the future will need a parking permit to park in their own car bays
Body corp fees can varry on a number of factors. One of the more expensive things can be maintaince of lifts. Other things like swimming pools, spas, saunas, large gardens, etc have running a maintaince costs that can effect the body corp fees. Older more run down places may have a larger sinkng fund for future capital works.
I believe units near train stations in the current market would be a good location to invest due to increase fuel living costs will allow some couples to drop to a single vehicle and save on fuel and running costs
Body corp fees can varry on a number of factors. One of the more expensive things can be maintaince of lifts. Other things like swimming pools, spas, saunas, large gardens, etc have running a maintaince costs that can effect the body corp fees. Older more run down places may have a larger sinkng fund for future capital works.
I believe units near train stations in the current market would be a good location to invest due to increase fuel living costs will allow some couples to drop to a single vehicle and save on fuel and running costs
