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While I have not seen any of the formal documentation that has been prepared. The agent suggests that they would maintain the property however with aging tenants one can only presume an ability to mainatain for a certain period.
They want the purchaser to pay the rates.
It seems they also rent out a section of the home for $200pw (second living area?) They would retain that income under the above suggested terms however would offer the home for sale @ $260k if the purchaser wanted the benefit of the $200pw income.
I cant help but think the seller was/is a finance or superannuation advisor. It seems a very creative way to secure the retirement. (no home repayments or debt, never have to move, secured income etc)
I am thinking he could well be a very clever man.. so just what is he thinking in respect to this being a win win deal? What's in it for the investor?… Perhaps the immediate $150k equity, but is that really a big help if there is no income?
I believe it is easier said than done. I believe these spruikers are telling the truth and I believe it can be done but I think they perhaps leave out the one fact we all know .. it is hard to learn how to determine what is and what isn't a good deal. It is hard to predict the future of market etc. those that are good at it have spent many years learning generally by doing.
Perhaps the promoted idea that it is easy and anyone can do it, no experience or knowledge needed is a little far fetched. I believe it would be a tough ride but for the determined sucess could be achieved. But you would have to be determined and be earning your bread and butter elsewhere… just my opinion.
I have recently read their book and too was very intrigued by the PIT (property investor trust) and the way in which they use it.
I have since spoken with a few people who have advised me to be rather weary, there are also some threads on here that suggest to be careful. The concern seems to relate to the ATO's view of hybrid trusts.I would be interested to see what you find and what you decide to do JacM
Read 'The Richest Man in Babelon' and then put it into practice. 10% of your earning is savings, 20% is investment. The rest is yours to live on.
If I were starting this journey with $875,000 cash, I would be one happy chicken… wahoooo
Lets count – yep that 875,000 cents for me… but thats okay, I'll catch you one day
Any good areas in QLD under $200k
Hee hee thank duckster and number 8.
number 8, thats exactly the calc's I am trying to do. (with not alot of luck).
I am trying to work out the $ I save (thus earn) on putting an extra $1,000 in my offset vs the $ I make (or would need to make) on an IP.
To be honest I am trying to find a way to do both (I.e. have an IP that returns at least the cost of the interest of borrowing + put my extra $1,000 a month into my offset for as many years as I can)
However I am also trying to get my head around if I can only do one which will be financially better for me at this stage.
owe.. my head is starting to hurt.
Hi JacM, thanks for being so attentive.
The numbers I was working with were a loan amount of 302,000 with interest rate at 6.54 paying and additional $1,000 per month
Good morning kids – come and play….. please
Thanks for thinking of me JacM, this too is my concern and I am stuggling to get a hold on the sensible vs silly as the topic suggest.
At present I am comfortably paying my PPOR loan (just changed to IO to build up offset but still pay in as per PI)
I am also comfortably putting away an additional $1200pm
If this were to continue I feel quite secure however I feel I cannot invest based on this income because it could change if my work changed or I fell pregnant or etc etc.The way I see it I have 20k in the offsett to the PPOR – as my reserve buffer
I can set up an LOC with the equity on the home to the value of $33k being enough for a IP deposit and likely a buffer if I purchase in low $200's and pay the LMI. (thinking better to pay the LMI and have a buffer than avoid LMI and have no buffer).If the property I purchase pays the cost of the borrowed funds then I only have to kick in the rates and maintenance etc (which my current $1200 per month would do easily as well as grow my buffer). I would also look for a property whereby I could in future improve to improve the rent so as to get it cash neutral asap. (so I can breathe again)
My other buffer is my partner who could offer say $1,000 per month if needed. I feel that if I buy right and consider that the property must earn enough to cover the cost of funding I am pretty much okay.. No???
My area is very close to the bottom of market if not already. I dont want to miss out by being affraid to take the risk. Having said that I dont want to be silly either or put undue stress on my/our lives.
Thoughts?
Thanks JacM.
The loan is 302k. After living expenses and current mortgage I have approx $1,000 per month available to service a loan on the investment. When I calculate these sums it is not to scary however if something were to happy to affect my job I would be in trouble.
Thus I am seeking a cash neutral property in the low 200k's. Thus while my income remains I am infront and if my income decreases I am still okay. Goal is to get starter style property cash positive asap in area of potential capital growth.
Hi Jac M,
20k ready to invest if need (currently offsett to home loan)
Looking for investment property to rent out, cash neutral ideally
not eligible for FHOG
Live in central QLD, whitsunday region
Currently own PPOR with bank (Debt 302k value 420k)
Super 40k
Salary 85K (not overly stable, but been steady for past 2 years)
No debts other than PPOR
Havent spoken to financier but believe I could borrow against the equity in my home.Thank you Yannick, I have downloaded.
Its crazy i really dont like reading but i simply must know as much as possible about property investing and it seems reading is the way. Particulary as I dont have much spare cash to spend and live to far away from all the seminars.. Just wish there were more CD's or DVD's rather than all books… ahh well..
There is also a sole agency which mean that you give the listing exclusively to one agency however you are still able to sell the house yourself without having to pay commission to the agency.
Thanks Fran, that is really helpful, I will have to put my mind to work but all of what you say seems very doable for me.
Yes I do have a contract on the property currently for the $138. Generally speaking this amount is 15% under the price of similar product on market. As the property is unlikely to be ready (settle) for another 12 months I am hoping that it may be worth more by then.
In addition I am thinking that I will be able get a DA approval to convert from single residential to duplex, again increasing the value of the allotment.
Had been thinking about the builder angle as well but am a little stuck on ideas of how to put this together in a way that is win win.. any help would be welcomed.
Thanks Terry, anyone else got any tips for me?
yes I would I guess my concern was my ability to get funding….
Thanks Mosic,
That would be ideal however the configuration of the block does not really allow for it (25m wide by 55m (ish) deep). Would suit development but not subdivision. It is the only allotment in the town that is large enough for medium desity development within the medium desity zoning and thus the reason it pricked my interest. Was thinking this fact would make it desirable in future for those seeking a development opportunity.
hello all,
I think the main issue here is where you are watching or where you are living. It seems there are great differences in what is being experienced in differing areas.
I talk to a friend in Melbourne who talks about the strength of the market and all its factors. I truely belief his comments however in my area north QLD my market is much more like eloi explains.
In my market place invesstors have been absent for at least 12 months and first home buyers are unable to afford the general asking prices. We have an oversupply of almost all product types (as many developers were catering to the now absent investors). The result has been a 20% drop in selling prices over the past 6 months. Vacancy rates are continuing to increase, rents are decreasing and properties are staying on market for alot longer.
So my question is.. Is now the time to buy (definately a buyers market) or do I wait 6 months as further the area may experience a futher reduction in sales prices. I am however very confident that our longer term market conditions will be solid.
