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My advice is that if you can afford it now, buy it. Of course you must take into account interest rate increases.
Property in many parts of Australia is still rising quickly. If you wait another 12 months, you've not only paid rent but prices may have risen by $20,000 plus if the value of the property is over $400,000.
There are companies around that will do all the work for you. For example, Developers Edge source land, build the house and even organise a tenant for you. Some of his clients live interstate and even overseas. Some of them never personally see the property before it is tenanted out.
I recently had a house built by his organisation and was very impressed with his product. And no, I don't work for him, I'm not related or a close friend neither do I get anything out of my endorsement. I'm just happy with the way he handled the whole project.
I'd strongly advise you not to organise the project yourself as it is difficult enough when you are living in the same town. Leave it to the experts who know the local regulations and are in regular contact with tradesmen.
I had a similar problem to you with a property I had in Brisbane. It's a matter of patience because it will eventually rent out. It's so important to show confidence in your property manager otherwise you may as well move on now. Also, you must work closely with your PM and ask him questions about his marketing strategy, when to lower rent and presentation. I did talk to other agents about their strategy and found that they weren't much different from mine so decided to stick with him. One hint that I got with another property I had, was to review the rent every week and keep dropping it until someone shows interest. The more I dropped it the more interest that I got. You have to face the market realities rather than worrying about what you think you shoud get or what others are getting.
It took me about 6 weeks longer than I wanted to get a tenant but eventually I did at $60 below my original price. My property manager was able to organise the lease so that it finished in the peak period ie middle of January. I'm hoping to get back to full market price within a year or two.
Hope that the above helps you.
I'd agree with firstmillion and Terry. Increasing the loans on your IPs is a lot more tax effective than putting the $60K as deposits for IPs. You need to talk to both your accountant and a good mortgage broker.
Have you considered the capital gains implications in selling the property? Unless you have to sell, I'd hold on to the property.
Normally I don't investing in mining towns as the prices and rental demand can change so quickly. However not all mining towns are the same so could you give us some information on what factors are likely to underpin Emerald's future. Why are are so interested in Emerald?
My preference would be to invest in Adelaide as prices are likely to be more stable than Emerald. As a Queenslander, I'd much prefer SE Qld especially Brisbane. Outside of Qld I'd invest in Sydney or Melbourne before Adelaide but if you want something to live in of course buy in Adelaide.
crashy wrote:hi Michael have a search for 'redcliffe" on this forum, Ive written heaps about it. disagree with stalled the last 2 years, I sold one in March 08 (peak was Jan/Feb 08) and another in Aug 08. I no longer own any property. I dont expect price growth to come ANYWHERE anytime soon, but IF it does come somewhere, Redcliffe is where it will be.Would agree with you about Redcliffe.
Off the topic a bit but am intrigued WHY you no longer own property?
Hardly anything available in any of the areas you mentioned for under $300,000. The Redcliffe area ie Margate, Woody Point would probably have the best potential. Still lots of older homes but would need a fair bit of work at your price range. There are still reasonable quality houses in Kallangur for under $350,000 – growth potential is reasonable especially if North Lakes commercial centre kicks off.
god_of_money wrote:I can do it myself without paying 3%I've got a friend who went through Custodian Wealth for his first investment property. He said that, without their help, he would have been too nervous going into property investing. The 3% amounted to close to $10,000 but thought that it was well worth paying as he had no hassles at all. Custodian did everything for him – bought the land, arranged the building, guided him with the finance and paid him rent until he got a tenant even though he didn't use their suggested agent.
I've done a few developments myself and if I had as few hassles as my friend, I'd gladly pay the 3% to get the deal which he got.
Rates may go down to 2% but not likely to 1% unless our economy really "tanks". Even if rates did fall to 1% I don't think that mortgage rates will go down much more from our present levels. If interest rates drop by another 1% then our mortgage rates may drop another .5% as the banks keep complaining about their high funding costs.
I've just read all the posts to this thread and must say that I am very confused. On one hand we have a few people saying that they are very happy with Premium Finance while the majority (in particular Richard Taylor) bagging them.
If they are as good as some people say they are, we could be missing out on the services of a great organisation. On the other hand, if Premium Finance are spruikers then people like Richard may have done all of us a favour.
The question I'm asking is: what criteria do people use when deciding on financier? From what I've read so far on this post, the criteria a lot of people use is based on heresay, cynicism, "feeling", opinions of a few people on a forum.
I've built quite a few properties and something always crops up which delays the project ie rain, getting the right tradesmen at the right time, materials such as kitchen appliances not available. 6 months is possible if everything falls into place.
I know it's extreme but I've got a mate who has still hasn't got his project finished after 24 months. His builder is not going to go bust, just lots of issues.
I need an interior designer. Do you deal with Brisbane investors?
There is no way that I would buy now. I'm just waiting for the FHB grant to finish or change in July and start at looking at bargains as unemployment creeps up. Rents in Brisbane are still holding up with 2 of my recent purchases rented at above my expectations.
My finances are in order so ready to swoop as soon as prices start to "tank" down.
I agree with Scott No Mates. 9 – 12 months is about average.
I wouldn't buy now even though most of the fundamentals appear to be there. The "smoker" is unemployment which will make things even worse than it is now. House prices are likely to deteriorate over the next year so why not wait a bit longer when interest rates are going to go over even lower.
Richard Luke has done what many other brokers and bank managers couldn't do for me. He is an expert on CBA lending. HIs phone number is 0432890344.
I've just finished my 2nd home with Dixons and overall, am happy with the result. It took about 6 weeks longer than predicted but still, not that bad. The supervisor was very helpful and so have been the Chermside staff. If ever I had a problem, I'd arrange an appointment to see my sales consultant who always sorted things out for me.
I got a few people to check out the house before the handover. Even though we were very pedantic, the supervisor was very cheery about it all and fixed up all the little things within a few days.
I can't understand why some people seem to get their houses built within a reasonable time while others are getting terrible service.
I've built 2 homes through Dixon and have been happy with the experience. The Chermside office (in particular Peter and Eliza) have been extremely helpful.
Advantages: great value for money, reasonable building time (between 4 to 7 months), great tracking system, knowledgeable and helpful staff, wide range of plans, inclusions are improving all the time.
Disadvantages: hard to contact key staff (staff don't appear to have email), no definite completion dateI'm about to start building 2 more homes through Dixon
A family member has dealt with Investors Finance and is very happy with their knowledge and service. I'm quite impressed with a free DVD that they've just sent me.
