Forum Replies Created
Re-iterating Nigels Comments, when 'mentoring' programs are too cheap the company HAS to make money from you somewhere else otherwise they would not be able to operate. Be wary of FREE mentoring also.
Advice is always worth what you pay for it. A good property investment advice firm will be able to assist you no matter how or what you want to buy. Always ask, "will you help me analyse and research my neighbors house as I want to buy that".
Best of luck
You may not be able to legally hold the tenant to staying three months in advance. The rest sounds good, you will need to inspect the property or at least have someone do this for you every now and then. Also, just work out how you will deal with any maintenance issues that you foresee arising.
Ie: have the numbers or emails of reliable trades on hand to deal with any issues for you. If you get a good tenant it can work perfectly, it has many times for me however maintenance has been low as it has been for new property of mine.
if you're in an apartment block this could be very easy as maintenance would be very minimal generally
Also, sales are a little subdued at present which is also while vendors wait for election issues to be over. however i don't think this will have a great impact on property markets, its just human behavior to not make decisions around times of uncertainty. At the moment the uncertainty is political.
However each local market needs to be assessed on its own, if yours is good now maybe its time!
Ok, that is expensive then!
Considering it is your PPR than your tax advantages are great! paying less interest is not necessarily a bad thing should you only have IP's to offset. You could further invest with a good strategy or look at buying a new PPR.
Mould is an issue that sometimes never goes away (permanently anyway). Not that its a reason to sell a house, but it looks like you could be doing better things perhaps?
Josh
4 weeks let fee is far too much. I will re-iterate that you should be focusing on quality not money especially if you are going overseas.
Ask…
1. Will you take photos on the inspections, if so, how many, of what and how often.
2. You will need to set a schedule in your calendar of your expectations from the manager so you can keep them accountable to when you want to receive updates etc.
3. Ensure they disperse your rent at least fortnightly, not monthly.
Since you live locally, send a friend in to test the service of the agency as a tenant. This will give you a good indication as to how good they will be in finding you a tenant. Ask questions like, "is whats on realestate.com all of your listings"? if they say they ahave more, dont use them.
just a few points
Donna,
The body corp is not the worst, it all depends what you get for that. Assess the condition of the complex, the amenities, gardening and maintenance, sinking find val etc.
As for the cold feet, everyone gets them and no one can tell you what to do when you get them. I always ask if cold feet have stopped you from doing a lot of other things, ie buying before. If so, then maybe you do need to just 'jump in' after doing the right due-diligence of course. I would suggest identifying what your fears are and addressing them rationally, that will help you work out if you should continue or not.
Murramba downs has good growth prospects as long as you are buying the right property.
Josh
Hi Harry,
It depends what you want to achieve from property in the long term. However if a property sits in a good market and your research leads you to suggest that the market in the future wont be as good as now than yes you should definitely take advantage of it.
My question to you would be what have you done to research and come to an educated conclusion on the future of the local property market?
as for the BC fees I dont think they are high or that the increase will deter buyers in the future. I am assuming you mean they will go to $1300 per annum. A $200 per year jump correct? For the next buyer that is only an increase of $2000 for a ten year hold.
Do you have other investment properties? you are better to be exposed to the property market somewhere than not at all i suggest.
Josh
Hi Se7en, has your frind shoped around with builders? I would look at why the valuers are smashing it. The project could be loaded with features that the valuer is not placing value on, these items could eqaute to $15,000 – $20,000 in some build contracts as people get carried away with variations when the valuers miss them or dont place much value on them.
Shopping around with builders could save quite a bit too.
Josh
Hi Peter,
Have you done any property investing development at all? Building or even being involved in a 6 story development is no small feat if you haven't.
To be involved in a JV, it would depend on the level of debt you have on the land. if it is owned outright (or nearly) you would be in a good position to enter into JV discussions. If your debt is high on the land than the only thing you are bringing to the JV table is a suitable site which must be financed.
A better overview of your position may help the forum to provide more tailored comments
Josh
Hi Jack,
Yes of course, all part of the problem and solution. My experience and understanding shows me that many people refused to listen to some advice (not from me but others) and purchase based purely on cash flow with conducting no risk analysis whatsoever. This caused many investors to pay well above the odds (which I or none of my clients did I would argue) and as a result artificially pushed the market up based on speculation, not current circumstances.
Unfortunately many factors caused the market to go a different way in a very short amount of time. However this was a risk factor that was seen as it reduced rents to levels seen before the boom in the end of 2011. From my perspective this is okay, in fact I have used this to my advantage to procure some pretty good deals in the later half of this year. However for those that paid 10% more than they should have and are relying on yield to see them through, this to me is greed and is shooting yourself in the foot.
Also, I'm not making that statement now that it is obvious that many overpaid, if you look back through this thread and my blog, i made that claim earlier on in the year and provided my personal opinion on what is a good price on different property types. Many people didn't take heed and rushed in and got burnt and now have a property that they couldn't sell for the same price.
In regards to your purchase Jack, I believe that those units were good market value at the time. Even though the market has really slowed, you could sell it for the same price if not a bit more. Unfortunately that's not the way many envisaged the market being at this point, even me, however when reducing our risk it is a good position to be in.
Jack, there were many investors with the attitude "I don't care what i pay, i want in and i want in now". That is the epitome of greed and i hope that it does not happen again in a place like Emerald that plays a great role as a hub in the middle of QLD. Maybe its a naive idea logy to have that the market wont be bastardized like that again, only time will tell.
Cheers
Hi PY,
Good comments, firstly i would recommend to have a read of this blog post of mine about the QLD coal industry http://www.ppiqldtour.blogspot.com.au/2012/10/whats-wrong-with-coal-industry.html . It is again my opinion however it highlights many of the fundamental issues facing the industry that were really all highlighted mid this year.
My opinion is that if a few of these issues can be overcome we will see more employment into these areas. The alpha project will be a big boost for Emerald, that is a certainty. The uncertainty is when. I have given up guessing as every deadline has been extended. It obviously wont be over night, the mine that will be built is huge!
From a property investors perspective, rents that were achieved in the first half of this year have subdued some what to more normal levels whilst vacancy rates are quite a bit higher than what they should be for the community. This is due to a lot of new stock as well as local redundancies. I am going to take a punt and say that by the middle of next year, most new houses/developments that have been sold this year will be completed. Investors are still active in the market however they are not hitting it as hard as the first half of the year. Historically this has meant that once all the stock is taken up and a new project/s come in to play, rental properties can be hard to find and therefor rents increase, investors come in again, and prices go up again like we just say. Hopefully next time they wont get as greedy and shoot themselves in the foot.
Personally, I am building in Emerald next year to hold for the long term and am happy to do so.
maybe the name of the town/region/landmark with the word "gum/s" ?
Hi Cha,
Nathan has a point, if the unit has not seen growth since 2001, why? and what would change in the future for growth to occur? however your ROI could be quite good of you rented it out. as your equity is also quite good, the rent could increase your serviceability (potentially). I would recommend you do a full cost analysis on each of your options.
cheers
where is it and how many blocks? residential, acreage? sum the estate and town up in one sentence if you can, then ill give you my ideas! and it may make it easier for other people to. However, theres no sites or anything for this, it comes down to peoples creativity
Usually developers use names that the locals can relate to (in a positive manner of course). ie any rivers etc around. This is usually a strategy to attract owner occupiers!
cheers
The blunt answer to your question is to review the body corporate. However, you should technically own what lies within your 4 walls. As the garage is separate, check the exclusive use plans.
Their is a possibility of separating the water meter (I think) however it will depend on where the meter is located. if it is near the house (unlikely) it will be easier. You are better to either charge the tenants an agreed water usage amount and you take on the risk of a slightly higher bill if it arose. Probably cheaper than paying a plumber to install a new meter.
Finally, the main issue I foresee is the car parking. many body corporate's regulate car parking externally from your premises.
Hi,
As we invest all throughout regional Qld, we are always traveling around!
Cheers
Hi Jack,
You bring up a good question as many people would look at my strategy in a negative way due to the action that has happened in Emerald lately.
Firstly, the article was written many months prior to release so the market had not changed so much. However, I was asked to produce a long term strategy. For me personally, whether someone believes it to be right or wrong, Emerald is a part of my personal long term strategy. This is why I would suggest it to other people if it suits their portfolio. Which leads to your next point, yes, we supply properties in Emerald to our clients, one of which is yourself as you know. However, i do want to point out that we can broker deals anywhere we wanted, and we chose to deal in Emerald as one place strategically.
Emerald is a place where the market fluctuates for periods of time, sometimes good and sometimes not so good. Some facts to consider are:
– Emerald has a population of 17,000 approximately
– Emerald has approx 50% owner occupiers
– Emerald is a contracting and service hub for the Bowen Basin.
Emeralds future prosperity is closely linked to the coal mining industry, theres no doubting that in my mind. However the fundamentals to Australias potential future coal mining industry are strong. What is wrong about it from my perspective at the moment is the following 4 points.
1. The Australian Dollar is too high. Partly due to the exponential capital being invested at the moment.
2. The unions are struggling to get along with the corporations. Disputes that have been going on for two years now have gone too far for my belief. Im not going to get into a debate about what is right or wrong. However my point of view is that it is no ones right to have a job. Therefor, our jobs and industries are not fail proof. We are putting to much pressure on the business environment in this country.
3. Two new taxes have been introduced, a) MRRT b) carbon tax. It always takes time for people and industries to see how this will, in reality, affect them. Leading up to an election, the large corporations with so much at risk always attempt to have their political sway buy afecting the enviroments and aiming to have people vote for a party which the industries believe will benefit them long into thw future.
4. The cost base of our mining industries are exponential. In fact, just last week BHP made an announcement that it was time to be more conservative with their operating expenditure. When commodity prices go sky high, the miners will do whatever it takes to get the stuff out of the ground as quickly as possible. most of the time, oblivious to costs.
this is summed up in a statement from BHP.
"While our resource base in Queensland is very high quality, the heavy cost of taxes, royalties, declining productivity and a strong Australian dollar means that further investment to grow these operations is much less likely," BHP CEO Marius Kloppers said in notes for a speech in Brisbane.
When all of the 4 factors sort themselves out to some extent, we will be back on track. times like these have happened before, and they will resolve themselves, and most likely happen again.
Back to Emerald. It will also be the hub for many future projects, which will, at some point, go ahead. I would recommend for everyone to due a lot of due diligence into the mine closures at present as there is a lot to be understood about them.
As investors follow each other, i believe we will not see many new properties being built from July next year. This will, as it has in the past, provide time for the market to soak up an increase in rental properties which have been bought, usually at inflated prices, to investors who jump on board with the hype without understanding the market fundamentals or even its short, medium and long term outlook. This will see rents increase when, inevitably, there is limited supply and high demand, and investors will, once again, push the market even higher than the average.
Finally, my risk mitigation strategy for my client profile in YIP was that they need to have a property, which, at the least, pays for itself. I believe that Emerald will provide this to investors assuming you don't pay too much for your property.
I hope this clarifies my point of view and understanding.
Cheers
Hi Bullet,
I would be looking at 3 beds too. the extra space is/should be, quite cheap to add on.
I would suggest doing some more homework on small developments. To be frank, if you are not familiar with what headwork charges are than keep doing your research into everything.
You will also need to think about the strata title, creating a body corporate to sell them individually when you want, timeframes are much different for duplex than a house too.
As Central and North Qld continue to grow as booming economic hubs with a varied industry base, a move like this would further cement long term population growth in regions like Mackay and Townsville. The provision of more services and infrastructure to these cities would make them an even more desirable place for people to live. Coupled with outstanding employment opportunities, we believe that key regional cities in Qld will experience above normal population, wage and housing growth long into the future.
