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Hi Alpha, I'm a MB based in Sydney. Happy to assist with any questions.
does anyone know if PMI gives refunds? I raised the whole LMI refund issue with my broker and she believed that this is a myth. Would appreciate some feedback so I can fill her in!
this month's API has an article on this. I posted a response to a question like this on another forum a few months back and hubby and i have our case study in the mag (they got it a little wrong tho but it does prove you can move up the ladder with not a lot to start)
find out the agent in your area of interest that sells foreclosure properties at auction. Depending on the state of the market, the properties may need to be sold for a high amount for the bank to recoup all of its costs, so not always a bargain. Having said that, there are bargains out there.
I haven't had to exercise an exit plan, but I do have one just in case. I buy properties under market value that can also have a value add by doing a few cheap renos. I know that if I needed to sell, I would make at least 40K, even at fire sale prices.
count me in please
Jensta
[email protected]I bought in outer western sydney when I was 25 (in 2000), bought a cheap 3 bed townhouse, basically the cheapest thing in the suburb. 2 years later the boom had started which upped the value, so I used this place as equity to buy a place closer to the city. I bought the cheapest, liveable property on the market rather than the maximum i could afford. While it did take a while to travel to work, I have built up equity over the years without struggling too much with a big mortgage.
As you are heavily negatively geared, have you considered obtaining your tax return in weekly installments rather than getting the fat cheque at tax time? This could improve your affordability. If this frees up your cash, you could then purchase a cheap property with a good rental yield that would be close to paying itself off.
If you sell, you will need to consider the capital gains costs and whether it is still worth selling if the tax man gets a fair cut of your profit. If the tax lost is not too high, it may be worth selling the properties if you know you can find properties with much higher yields.
are you saying that you made an offer that was 25K less than the purchase price and this was the value that the bank gave? The bank's generally value the property at what the purchase price is, regardless of how good a deal you think you have got. I purchased my PPR 40K under the asking price and the bank valued our unit at that reduced price.
If you can provide the valuer with evidence of comparable sales in the area this may result in a higher valuation figure.
I think buying ex-housing commission is worth it. I definitely wouldn't do it sight unseen or without doing some serious research into the area. Some of the properties are in OK areas, others not so good. Depending on what section of the Commission is conducting the sale, sometimes repairs are taken care of before the auction, e.g, one i recently purchased has the walls patched up and painted before auction.
The properties I recently purchased had boards on the windows so was more difficult for vandals to enter. Fortunate for us, there was no new damage to the properties on settement.
I guess there is always a risk in buying properties in low demographic areas, regardless of whether they have been purchased direct from the Commission or from a private seller. I have made between 40-60K on each property I have purchased, simply by picking them up cheaply. I have only had to spend between 2-10K on each property and they are now returning 8-9% rental yields.
Other investors I have spoken to have told me they would never buy this type of property, but it is currently working for us so it might be something we will continue to pursue. However, if you feel that you would worry too much about these properties sitting empty until settlement/tenants moving in, then maybe this strategy is not for you.
Worldchanger, what area are you referring to?
Hi Zoe,
We've done OK so far with our properties. We bought 2 in country NSW that had boards on the windows to make it harder for vandals to enter but looked pretty damn ugly. At settlement we had no further damage to that existing at auction day. Rental yields are quite good but as yet have not found tenants (we settled 4 weeks ago). The problem is the houses are on predominently housing commission streets so others are reluctant to live there. Hopefully we will find tenants soon.
Just about to settle on 2 in outer western sydney. We've been out there a few times since the auction and it appears that the neighbours have helped themselves to the bins, some of the flyscreens and there are a few hooks around the building that indicate that something used to be there. Our agent told us to lock the screen doors after we left as the people in that street have been known to steal them if they are not locked. Fingers crossed all will still be in one piece for one more week for settlement.
FYI our valuations were conducted within days of the auction so we have had no problem at that end.
We had a no children policy at our wedding. It had nothing to do with money though, kids 5 and under would have been free. We just didn't want 25 children under 5 at our wedding!
I have recently purchased a few properties from Department of Housing. We saw a few things we were not happy with in the contract, but as we bought at auction and could not make changes to the contract, we just had to take the risk that nothing happened to each place. It was a bit unnerving knowing that there was a clause somewhere that indicated that if anything is taken between the auction and settlement it is not their responsibility to fix or replace. I don't have any advice for you but I wish you luck. Your situation has made me think twice about buying straight from the Commission again.
Well said Leilah. We got married a few months ago and while we spent a little more than appears necessary from most of the above posts, we wanted all of our extended family sharing in our day so we had a large wedding and had a lovely ceremony and reception which was exactly what we wanted.
We spent what we could afford and at the time of the honeymoon we owed nothing toward the wedding or the honeymoon. Sure, our wedding costs could have been otherwise used for 3-4 deposits for IPs but we wouldn't have had it any other way. Investing is a long-term goal and to sacrifice a few things for your one big day just so you can buy a property 1-2 years earlier would not have been worth it to us. We now have wonderful photos and memories of our day and are back in the throes of property investing.
We recently settled on a property in NSW. We only found out the costs about 2-3 days before settlement. Depending on when your solicitor requests the information on rates, water, etc you could probably find out the details earlier than that
I signed up to Dymphna's real estate success course and attended her Sydney workshop last week. There were a number of WWW there. I think any of her courses are good value, she does not limit the education to one preferred method of acquiring wealth through property and she speaks in plain English so none of her strategies do not appear to be too overwhelming or require a lot of background understanding to benefit. She gives enough information for you to work out what will work for you and what won't and to start to think independently about wealth strategies. I think the WWW program also focuses on mindset and motivation to be successful.
I think any course is worth attending to give you the motivation and education to pursue property investment. From now on I will be looking at free or very low cost seminars to keep me going but her course was a great starter to a fast-track education.
