As mentioned above, communicate expectations and deadlines clearly in writing. If they don’t comply, report them to Consumer Affairs. They stand to lose a lot if Consumer Affairs pursue them.

Being inconveniently vocal about the issue in their reception area when it is full of clientele is also quite effective.

Were you planning to pay cash for it? If so, sounds like you have about $50k. You can most certainly do other things, including acquiring property, with $50k.

Yep. Dianna. Her userid on these forums is DWolfe . I know she does great work on existing dwellings and also newbuilds being advertised for sale.

https://www.propertyinvesting.com/members/DWolfe/profile/

You could drop her a private message from there. The website is http://www.homestagers.com.au

(Moderators feel free to remove the website link if you prefer it not to be there. Not sure if it is ok when people have explicitly asked for a recommendation.)

Be careful with the knockdown and rebuild strategy. Be sure you’ve got a broker that knows his onions on such deals. Some financiers won’t touch it because of the issue of getting caught in that middle phase where they’ve financed a property that had a house on it, then suddenly all it is after the knockdown is a block of land that is worth less than the original mortgage if they had to send in the receivers to sell it.

Also keep in mind that you want to have as little debt as possible on your PPOR (the one you’ll live in) and instead have the debt on the IPs. (Better if there is no debt at all, but there will be debt for some time, so the mortgage interest might as well be a deductible expense on your tax return. It can be deducted for IPs but not for a PPOR).

If you are planning to hold, look very carefully at the holding costs. You will likely find that both the council and water company will issue a separate set of rates per unit even though they are not on their own titles. This adds up very quickly and chews into your return. Also look very carefully into insurance. There are not heaps of insurers that will offer insurance on blocks of units (GIO is one insurer that still insurers them so you could scope them out for a quote). Also if they are not all under the one roofline, that hikes the insurance bill even more.

Also be aware that if a tenant damages something in the common areas (eg fence) it is very hard to prove which tenant was to blame, so that’s always a repair cost you’ll never be able to take out of the bond of a tenant.

Some resi unitblocks are being utilized for commercial tenancies. Blood collection clinics and things like that. Businesses that don’t need to have loads of people at their site for ages taking up car-parking space. Just another reason why unitblocks are very popular as Richard says, and there is stiff competition for acquiring them.

Sure thing.

Hi Johnny

Wow, nice one! Two properties under your belt at such a young age and covering their own costs. Good work – you have the best of both worlds. You are investing AND it’s not compromising your personal budget and us such your lifestyle. You are young and should be enjoying life somewhat along the way, after all :)

If you were to “save for your next deposit”, can you give an indication of what size deposit you are talking, and the timeframe it would take to save it?

Hi Chris

There is no need to be on principal & interest unless you cannot control your spending. Go interest only and put what you otherwise would have paid towards the principal part into an offset account. It achieves the same thing (interest reduction). When the amount of money in the offset is equal to the original debt, you’ll be charged zero interest so in a way it will be paid off. The difference is you can withdraw the money from the offset whenever you want without asking the bank. When the offset balance is of a suitable size, you could whip the money out of there and use it to fund the deposit on another property rather than mucking about refinancing to get at your equity.

It is difficult to comment on whether it would be wise for you to buy again at the moment and if so whether you should use equity to do so. More information regarding your current circumstances would be required. I don’t like it when people mortgage themselves to the hilt to the point that their world will crumble if Woolworths increases the price of bread and milk.

Feel free to drop me a line if you fancy chatting about it in greater detail.

Very nice of you Gayle – it’s a pleasure to work with such nice people as yourselves :)