Forum Replies Created
Matt,
If the old tenants have offered you to keep their bond (4 weeks rent) and you have new tenants ready to move in, sounds like it’s a perfect situation :o))
And yeah, I think having a PM to look after your place in the future is a wise move- I consider PM’s second only to tenants in ensuring the success of RE, and keeping me not stressed out.
kay henry
Baloo,
I too thought it interesting a question for a Moderator to ask. I mean, we’re not talking 10.4% here- we’re only talking 8%- a yield which many people on this Forum could find with their eyes closed.
I did in fact answer the question posed- I answered that, yes, they are all over the place. I guess I felt the answer was so obvious, that I wasn’t sure why it was asked. Everyone else had the same answer too- unsurprising.
It’s fine that Moderators ask questions, of course! But I was just surprised at the nature of the question.
kay henry
Yorker,
I’m not sure that it’s just building relatoinships with one’s banker, that leads to unlimited borrowing. We’d probably all sleep with them if that were the case :o))) My bank has strict lending criteria. I think learning a few tricks (such as in Stuart’s article) is probably a better bet than the carnal route to unlimited wealth. [blush2] My own patterns I have developed, have shut down the concept of unlimited finance for a while, but it’s probably better if we train ourselves in the way of doing so, and not expect the banks to change their banking policies because of friendship.
kay henry
Monopoly,
I am wondering how many responses to this thread you will have to receive before you consider that 8% yields are not so much a “rarity”.
You said:
“However, these properties IMO are rarities, and when making such a claim, it is worthwhile (especially for the sake of “newbies”) to emphasise that although they are out there, they are not as common as one would like to imagine. BUT with a bit of effort, research (on and outside of net) anything is possible!!!”
I will not be adding a disclaimer to my posts at all. 8% yields are no big deal whatsoever, and dozens can be found on a quick search of realestate.com.au. Indeed, all of the responses so far have indicated that 8% yield isn’t hard to find. “Newbies” are only inexperienced, but if any person is given the right tools, they can find 8% yields as quickly as any other person can. I wouldn’t patronise new investors by suggesting that something that I can find so easily is a matter of “luck”, when really, it is just about spending a half hour on the net to find such properties. 8% yields are so mediocre that it’s quite simple to find them- now, >10% is probably quite a bit harder, but others seem to be able to find them too.
If I can find 6% yielding property in the middle of sydney (without even trying) then finding 8% yields in smaller cities and regional areas is a piece of cake.
I think newer investors also want some hope, and in this case, it isn’t false hope. I would suggest that if people are unable to find 8% yields, they are not looking hard enough.
kay henry
jdylan,
There are some investors in Sydney who meet up- Still In School, JetDollars, and some other folks. Perhaps you could message one of them to find out details of their next meeting time. There are also some regular somersoft sydney members who meet up. You could check somersoft.com to see when their next meeting time is.
kay henry
Sebastian,
I am not convinced that having “too many” credit inquiries on your record will affect your borrowing capacity or LMI eligibility. I checked my credit record last week, and was told by my Bank Manager that the lenders (including LMI lenders) only have a problem if there are problems with credit- not if you have applied for it. I think it’s probably best notto apply for credit unless you are going to go through with it though, because every reference remains on it. Not sure how long (if ever) the inquiries fall off it, but mine have been on there for longer than 5 years.
kay henry
Monopoly,
I am sure probably 80% of people on this board are achieving 8% yields on their properties. It is a positive gearing forum, after all. Half the posts on this board are discussing yields, and 8% really isn’t anything to write home about. On Somersoft, as mAny of them are negative gearers in a big way, the yields might be a bit less. But on here, everyoe is into maximising yields. I’m not sure why you’re perplexed. 8%- on a pozz gearing board- is pretty average.
kay henry
Tinman,
I believe it was Stuart Wemyss (a moderator on this Forum) who wrote an article on unlimited finance in a previous edition of Australian Property Investor. Perhaps you can private message him and ask him what edition the article was in, and then buy a back copy of it. It was a good article, too :o)
kay henry
Tikki,
I think I have a different view on what is “desirable” than others might have. Checking out industry/employment is important to me.. but I would rather buy in a place that has a University campus, than a pig farm or mine. I used to live in outback Australia, and there were black cockatoos with red tails in my back yard every morning, and kangaroos crossing the roads, and it was just beautiful- very untouched. I would find it difficult to buy into a place that had been savaged by a mine- others wouldn’t- but check out queenstown, tasmania, if you want an example of what I mean.
So desirable to me is a beautiful place- it could be rural, and with no heavy industry. Each person has different tastes. It’s good to develop one’s own, because it means I am not chasing places other people are. Give me bushland over mcdonalds any day.
kay henry
mikeej,
I see lotd of ads in realestate.com.au where it says “old owner wants to stay for 12 months” or something similar. Landlords want tenants- or our IP means nothing investment-wise, and landlords also want good tenants, so the old owner would be ideal. I reckon it would be easy to do a deal with a new vendor. Maybe you could pay a little more rent to act as a “sweetener” to the new owner. And, if your house is competitive for vendors, then you just choose the vendor who’ll write up a lease for you- the ball’s in your court, I reckon.
kay henry
jspri,
It’s a pity Kiyosaki’s book gives people such an anti-work ethic- there’s a lot to be said for working. I don’t see it as a “rat race”- if you’re at University, chances are you’ll end up your own boss anyway, doing autonomous work, so don’t give up on the world of work yet :o)) Some people even *enjoy* their work- go figure!
It’s like you’ll need a job of some sort to start investing. You have a deposit, and that’s great! But properties cost a large amout to maintain, so you’ll need some extra cash reserves for maintenance, for lost rent (if that occurs between tenants), and for QS reports, mortgage costs- a whole heap of things.
Join the ratrace for a while with a part-time job, and you’ll be a far more viable risk for a bank to lend money to you.
Good luck
kay henry
Patrick,
When Steve wrote his book, he was able to buy suburban properties that were cashflow+. This is generally not the case now. Think of it like cars… when Steve wrote the book, he was able to buy oldish commodores, lasers and mazda 626’s- and able to profit from them. Now the equivalent would be purchasing datsun 120Y’s and escorts… The market has changed.
You can still purchase CF+ properties- no worries- depends on what you’re looking for. The repair issue would concern me- have you got spare cash to do some fixing?
Also, tenants in this market can be very vulnerable to landlords upping rents to get that elusive 10.4% rent. As for me, I’m happy to get less rent, keep my IP’s competitive in a growing rental market, and buy a property that won’t have repair problems.
If you’re looking for pozz geared properties, you’ll find them, but if you’re seeking a bit of growth, and about 8% return, you will have a far broader choice, and will be buying places that tenants will want to live in.
kay henry
Damian,
Hopefully your job was permanent, and that you can get a redundancy payout- those $$$$k’s will assist in you getting an IP. The problem, if you are no longer employed, is that your serviceability will be affected. If you get a job next week, as you hope, you will have a new job, and your payout- what could be better :o)) Check with your local union as to your entitlements (hope you’re a member!)
I always put down a 10% deposit. My bank is old-fashioned that way, and so am I. If I renege on a deal, I want the vendor to be safe, and the vendor is entitled to my money if I stuff them around. Also, I want to keep an 80% LVR, so I can build equity, and not build debt. I think 100% (or more) loans are only good for a rising market, and this really ain’t one.
kay henry
thanks crj :o)
yes, it’s hard to find out what is real and what isn’t on the net.The info info I wrote on this post are taken from various sites on the net. When they are Council Plans or from mining conpany, I usually consider them acurate.
kay henry
brisbanescouting,
You asked the same question a number of times over a year ago. Many forum members responded to you. Perhaps you could look over those posts and review the answers you were given at that time. I think the answers given to you then would have assisted you in your research about the Brisbane market.
kay henry
BH has 6 years worth of mining left in it and pasminco, the last mine left, will close down in 2006 (some sites say 15 years left work of mining. Elsewhere, I have read 6 years left). The population is between 21,000 and 24,000 (different sites have different figures). About 800 people work in the mine, so that will possibly be 800 people out of work in a few years. The population was about 32,000 in 1906, but as with many towns (eg kalgoorlie), once they place has been mined to hell, the itinerant workers leave.
The town is now focussing on being a tourist destination, and govt money is being chucked at it to assist it in the transition. There are 25 art galleries there, including that of Pro Hart [baaa]
I think BH would be ok to buy into. Just do your research, and make your decision based upon what you know about RE in general. BH is cheap for RE, so that might suit some.
kay henry
daltoid,
This article provides some info on fibro and asbestos.
http://www.whs.qld.gov.au/safetylink/hazards/hsub04v2.pdf
kay henry
If I was not working, I would consider myself unemployed, no matter how much money I had. I agree with aussierogue about the stresses work can cause, and I am sure no workplace is perfect.
Some of the richest people in Australia work- eg Lowy brothers, the Packers, etc etc etc. I know Steve McKnight works too- and he works hard- he just does something he enjoys- and that’s the trick- do something you love, and you’ll be happy.
The article below (from the Medical Journal of Australia) is about poor health associated with unemployment. I am 37, and I have no wish to “retire” (ie be unemployed) at this age. It would seem like wasting half my life. Leisure can be enjoyed on weekends, and after work, and on holidays, or long-service leave. I know some people think working is wasting your life, but I come from an opposite perspective. Work can be entirely good for one- it just depends on one’s perspective. Perhaps those people who are unhappy in their work, might also be unhappy in retirement- who knows? Perhaps the grass is always greener on the other side.
“Differences in the presenting health problems of unemployed and employed people are not subtle. In a GP waiting room survey in outer Sydney, unemployed people were significantly more likely than employed people to report poorer health, depression, anxiety, insomnia and limitations to their social activities due to physical and mental health problems, after adjusting for age, sex and English-speaking or non-English-speaking background. There is also evidence that people who are unemployed have, or develop, chronic health problems that act as barriers to a return to work.”
http://www.mja.com.au/public/issues/mar16/harris/harris.html
kay henry
It has been my experience that people who want financial freedom, are generally those who hate their job. I see that my job leads to financial freedom, plus utilises my skills and abilities, and all that I’ve studied has come to fruition with my current employment.
I think life is about many things, and I see the ability to work in stable employment as a privilege. If I was, for whatever reason, unable to work, I would see that as being in an incredibly trapped position.
setmefree, not everyone on this board has the same goal. As for me, I will work until I am 65- and perhaps beyond, as I see work as having huge benefits in my life- financial, social, skill-use, etc etc. Plus it allows me to keep purchaing IP’s- the kind of IP’s that I wish to buy. That, to me, is freedom.
kay henry
daltoid,
Whether you use 36k cash, or 36k equity… it is still *your* money you’re using. Cash is king. I’d cross-collaterise. I think if we are purchasing thinking we are going to lose everything, and our PPOR will disappear… then we’re going into transactions with the wrong psychology.
I know others suggest to never risk one’s PPOR, but to me, nothing we do is a risk, if we are prepared and have fallback plans if something goes wrong. But we would never invest if we spent too much time worrying about losing it all. Investment plans are about growing wealth, not losing the shirts off our backs.
kay henry
