Forum Replies Created
Thanks for the advice. I really feel for the tenant who i think will get caught up in this mess if I persue it. I am not signing the management agreement. I am going to wait to see what the agency comes back to me with, but I want an idea of what I expect from them before they call. I agree that they should forfeit their commission, but I feel for the owner of the business who employed this PM, who is likely to be losing a lot. I get the impression that almost every client has had a drama. At this stage, I am still unsure if to 'dob them in'.
As for the idea of a 6 month lease. I chose to opt for 12 month lease in this situation because the population of the town is around 1600 people. They have a very transiant professional population in that teachers, nurses, doctors etc move in and out every year – and usually just after Christmas. I wanted to take advantage of the increased demand at this time, and maybe lose out on the occassional rent increase by doing so. My hope is that vacancy's will not be high as a result.
Thankyou for your thoughts and I look forward to hear from anyone with any other ideas.
JLChaid
Why after 4 years of living with your defacto, do you still have these concerns? I can understand this when you just move in, but if you don't love her, or you aren't sure, or don't trust her, or she doesn't trust you (hummmm), then isn't it time to sort this out. I would be thinking more about this than protecting your investments.
If you aren't sure, then way waste more time investing in something you are not sure about (would you do this on an investment property) . If your defacto is not your true love, she may be out there somewhere – investing????
Good luck and I'd be seeing a lawyer no matter what you decide.
JLTony,
It really depends on what you want to achieve. I would really recommend you find a mortgage broker, financial planner and accountant you trust to help you with this kind of info.
Remember when interest rates where at 6% and not much was anticipated to change for a long time. How things have changed. A wise person at this time said to me if you can't afford it at twice the interest rate, you can't afford it. Not surprisingly, we are not far from that statement.
What I'm trying to say, if you think the interest rates are high, and will get higher, then maybe you want to pay down debt. There is no point in being financial free if you can't function properly because of stress due to interest rates.
My advice, do your homework about location, do your pest and building checks and don;t necessarily trust the agent about expected rental returns, (although I'm sure there are some that are reliable) and most of all enjoy the process. This should see you through the more challenging times, and if not, what is the worst that can happen – you have to sell!!!!
Kind Regards,
JL.
PS Tony I would also suggest that you read, read, read. The greater your education the better decision you can make for your circumstances.
And yes, we borrow – as much as we can!!!Tony,
Welcome. I think you need to look at what you want to achieve before you set up a loan structure – I now wish I had done this before buying our first. Maybe speak to a mortgage broker about what your goals are and they can help you set up a finance structure from the beginning.
As for how to buy 6, 8 etc properties in one year. I think you will find that most people do not save as much, or more than you. Last year we purchased 2, this year 1. We have done this by using the equity in our current properties to fund the deposits. The biggest thing is to get in and buy that first one, then save to help fund the second while you are also getting capital gains. If you have a few properties then the deposits come a lot sooner, especially if you are using positive cash flow.
I hope this helps,
JLDaedalus,
I have not seen any applications, I trust our PM's. If you can't trust them with this, how are you going to trust them on inspections unless you are there. Aside from the issue at hand, have you asked the property manager how many properties they manage? I have found this has a big impact on performance and how much chasing I have to do. I usually pay accordingly as well. Good luck
JLI reward the tenant for being a good tenant and being loyal, that is if they are there for more than one Christmas, they get a gift voucher (I gave a Coles/Kmart one this Christmas, because they could buy that Christy lunch even if they don;t shop there normally), or beer etc. I always portion the gift around 1/2 of the weekly rent. My thoughts are, if they do not move out, I am left with a vacancy and paying the agent the leasing fee. It's much cheaper to have them loyal to us. Last Christmas I got a thankyou with some photo's from a grateful and excellent tenant. They are always behind in the rent by 1 week, but they look after the place. I do not go to inspections and have never meet them. The other tenants we gave gifts too, we did not hear from but they do not have our contact details.
I would not be giving gifts straight away, but I would make the tenants feel at ease about your intentions. Having a new owner is a very uncertain time for them.If you are worried about the A/c cost etc, give the tenant the option of the increase rent or no A/C. You will soon find out what is important to them and can base your decision accordingly. Another thing is if you only increase the rent by a little, you will find that most tenants will not move because it will actually cost more to reconnect all the services etc.
Good luck and hope this helps.
JLTangata,
I'm no expert, but wouldn't this be a tenant responsibility??
JLJules,
I would say that the company's you are refering too have been burnt in the past by people either not paying, or saying their quote was a lesser price. I would just ask them why they require this and if it is reasonable then sign. I would also ensure that the quotes are detailed about the quality of fittings, labour times etc. This way there is no misunderstanding about what you are agreeing to pay for.
JLsetehk,
Seek the services of a quantity surveyor to do a depreciation schedule. This will give you all the details you will need.
JLRobinm,
I agree with Trakka, but have you had a look at the FTB increases if you are renting, especially with an expected drop in income. This may be enough to cover any shortfall and keep your current PPOR as an IP while you rent.
Just a thought.
JLPaul,
I would suggest that don't sell your IP, but sell your PPOR and rent. This is an emotional decision, but you will then have a good amount of cash, with no CGT to pay. You can then decide if you save that money for another PPOR when your situation improves, pay down your SA property or purchase another investment. I suggest the later.
Hope this helps.JL
YReggie29Jetski,
I concur with all that Trakka said. Be warey that the house is worth it. We just had 2 A/C's put in ours. It is 1 hour from a major centre. It cost $4000 because traddies won't quote. The tenant is installing the new curtains for us, because I can't find a handyman that will do it. We have an agent looking after it, but they are an hour away – we are 2000km's away, so we are lucky we have a good tenant.What town you looking at?
JL
Linar,
I would go with the intent. What was the intended price you were to pay. Maybe if you are still stuck, put the shoe on the other foot and see how it fits, maybe this will give you the answer.
JLta,
Depends on how big the town is and how far away from a major town. If it is a long way, you could end up with a headache organising traddies, getting word out to find a tenant, or having an agent look after it for inspections and maintenance. They usually produce high returns, but consider the down side and if the place was vacant for some time. Is the industry definately staying on for the long term? Having said all this – we have one and it is doing well (touch wood).
JLTrance,
Why don't you get one of the overseas trips with work. I hear they pay well. Or buy your next one as a PPOR when the new work loan scheme comes in around mid year. It looks to be good if used properly. And then rent it out when you move on. If you do this you can sell it within 7 years without paying CGT if you haven''t bought another to live in. And since you mention we, why not get the other half to join you at work part time. Great tax benefit in doing that.
JLg_man08,
It does sound a little too rural. I have a place that is rural but it only takes a bit over 1 hour from a major centre. I have been waiting 3 weeks for A/C to be put in and expect it to be done this week. This is not excessive, but what if it was a hot water service or something? Tradies won;t go and do quotes, just turn up to do the work, so be careful you are not too isolated for even the most basic of repairs. You also have to work out how you are going to find a tenant from remote location and if you do have a property manager the fees will usually be a lot higher than for a less rural property.
JLG_man08,
I would get a building inspection from a qualified builder – not just someone who says they can do one. I would also get a pest inspection. I would also get the home electrically certified after purchase and make sure there is a safety switch and smoke detectors. This is not all legislation in Vic, but more to proctect yourself and the tenant. As for security with not making a loss, I would also not just go with the agency you buy from, for property management. Make sure you are comfortable with them and you manage them. I make sure I ring every couple of weeks or more regularly to obtain a good working relationship with the agent. It helps to have the work done (eletrical stuff etc) when you first purchase by the agent you appoint. This gives you reason to ring and make sure they are doing what they have promised. It is also important to check the area you are going to invest? Is there job security in the region and is there a big enough portion of the community who rent to make it worthwhile (especially in rural areas). And don;t be scared of damage done by tenants, just protect yourself with insurance that is adequate.
And then, just take the leap.
JLDamo001,
Why not check this thread.
https://www.propertyinvesting.com/forums/property-investing/general-property/4323698
I started this a couple of days ago. Agreed about the places being rural, but I also think that for those without a great income, or those with other financial commitments (ie kids), that this type of investment is great. The investments can pay for themselves, and although not achieving a fantastic growth, they put little to no pressure on a family budget. These type of investments I think should definately be long term, so maybe work out your goal and if you want growth only, disregard the 11 second solution.
Good Luckg_man08,
Why not buy. Just make sure you do your due diligence and be aware that agents can over quote the rent return to obtain a sale. We own a place we bought nealry 5 years ago and have not yet seen it. I don't think we need too. It has been trashed (just under $50,000 worth) and it was easy because it is business,we have no attachment to the place at all. The only thing I found frustrating was during repairs contractors wanted to know what colour things should be. My response was always neutral, but this was not enough for some, so I asked the agent who leases the property to choose.
JLSean and Lisa,
Recently my hubby and I decided to cash in on one of our investmests. First time we had sold. It's much more nerve racking than buying. I found that it was important for me to feel confident with our agent. I interviewed 5 before we found one that offered a fair value to expect and that I felt confident in. Ironically the figure we got within four days of listing was more than she had anticipated, but also exceeded all the agents quotes. I also found the delay between deciding to sell and the house actually being listed seemed like forever, whereas it was actually about 8 days. We had tenants in so we wanted to work around them for photos and inspections etc. All in all, the agents costs for selling was much the same for all of them, they just had different fee structures. Some wanted advertising, wheresas others built this in.
Good luck with this, and I hope this works out.
JL
Kris,
I would make an offer that you feel you can make money on and not regret. If the figures say you will make money at 215 and you offer 205, are you going to regret it if you don't get it. If the figures say you will make money at a max of 195, then offer 195 and you have lost nothing if you don;t get it. Good luck.
JL
