What about negotiating with current lender for extension of IO or extension of loan repayment timeframe? Or negotiate with them for a P and I rate reduction, any of which could reduce the monthly out of pocket to a more acceptable level without major changes. Gives you time to ride the cycle and perhaps sell into a better market in the future. You may have already considered, just making sure all avenues are checked.

Where are you looking to by @theheath?

Just saw this old post. How did you go @jasondras80 did you buy something?

Anyway… my observations are that there are huge differences between some country towns and others. You simply can’t generalise them as “good” or “bad”. It’s like asking if buying food from the supermarket will be healthy or not? It depends what you buy.

In general some guidelines:

1 stay within a few hrs of the major capital cities if you can.
2 stick to larger towns
3 Coastal regional options are best for capital growth
4 Anything with new infrastructure that will increase population or jobs is great, get in early
5 Look for regions where housing stock is limited and amount of land zoned for future housing is constrained.
6 Look for diverse economies (not 1 employer towns)
7 Look for strong rental markets with low vacancy rates.
8 Look for deals with value add opportunities like renovation, development etc

We do this all the time and have a lot of towns we won’t touch, and some we love.

All the best

• This reply was modified 5 years ago by  BuyersAgent.

Richard Taylor wrote:

We are now looking at lauching a new 100% loan style product as part of BA service or a 90% No LMI product for buyers in a SMSF.

Anyone care to comment on whether wuch a product would help them get into the investment market or help them increase the portfolio either individual or inside their SMSF.

I have no idea how the 100% product is linked to a BA service – I would have lots of questions about that (including whether both products were genuine and independent of each other) however I would think that a 90% no LMI product for SMSF purchases would be a game-changer and very popular. I have a lot of SMSF clients who have slowed down or stopped purchasing in their SMSF because of few lenders, lower LVR and various other restrictions limited their ability to leverage.

ajg71 wrote:

Hi thanks for the check up, no still thinking on my strategy as where to look/buy that will give me growth over a length of time, I dont want to commit to the wrong house in the wrong area.

very true. the difference between buying the the right area/wrong area is night and day.

keep going and do your research you will gain clarity eventually. In the meantime you might think about mapping your goals, and then choose things that are important to measure. The measurements will help you cut down the big locations list to a shorter list. I personally think that supply and demand are the most important drivers, with growing populations meaning more demand and constrained housing supply being way more important than most people think.

Another example of a really important metric for investors is vacancy rate. It is important that this number is low (under 2.5% ok but the closer to zero the better) as it means more tenants fighting for your home, which means short vacancies between tenants, more rent increases etc. If you can have rising rents in the first few years everything gets easier – you are less likely to ever be forced to sell at the wrong time and growth comes eventually too.

Some examples of these markets include:

Tweed Heads 0.9%

Ideal Retirement climate, growing international airport, large new regional hospital, perennial tourism and surf/beach industry.

Unanderra 1.1%

Express trains viable commute option to Sydney, close to Wollongong University, it is the first affordable option heading south in Wgong compared to the northern suburbs which are more expensive

Queanbeyan 1.2%

Affordable housing next to Canberra, comparably investor friendly rules (ie freehold land ownership, less onerous land tax rules than ACT)

Dubbo 1.2%

Major Central NSW regional hub, university, hospital expansion, agricultural and mechanical repair centre.

Goulburn 1.3%

Canberra commute option on the Sydney side, correctional centre.

I have blog post here with the full list of 20 low vacancy rates across NSW worth considering. Also if you want a free property buyer’s cheatsheet which helps note things to do to avoid lemons and some free goal setting sheets you can get that too. All the best with your decision making, keep reading you will get there.

Kumpapeat4 wrote:

Ikea is cheaper and has long years of warranty. I choose Ikea if you have two choices only. Anyway, try to find cheaper yet good quality.

The last time I looked at IKEA kitchens the backing of the cabinets was a bit thin. Happy with them otherwise but I like to know the cabinets are solid. I choose Bunnings for that one but this was in coastal QLD area and my options were limited. Haven’t checked the cabinet strength of the Kaboodle ones.

Richard Taylor wrote:

Thought I would introduce all PI members to an Australian first in the SMSF property loan space.

In conjunction with our legal advisers & Superannuation Lawyers Cooper Grace Ward we are now able to offer SMSF’s an opportunity to purchase residential property in QLD, NSW, ACT & WA property to a lvr of 85% without having to go thru the expense of setting up a Bare Trust or incurring LMI.

All property locations are considered and there is no minimum SMSF Balance or high servicing hurdles.

We have approved a number of applications this week alone from SMSF’s that have been told from other lenders that they don’t have a sufficient Fund balance (Usually 200-250K) or they need a percentage cash surplus post settlement.

If you are looking to purchase a property inside your SMSF and want an alternative finance options or have an actual SMSF scenario feel free to drop me an email and we can send you some details.

Cheers

Yours in Finance

Hi Richard,

Can I ask how you offer loans for SMSF property without the bare trust? If you have private finance I can understand a higher LVR but I thought the bare trust was a legislated requirement because of the LBRA rules? Is that also sidestepped by private finance? If you prefer to respond via private message I understand as I am curious but perhaps you have some commercial in confidence or intellectual property you don’t want to share in public.

Thanks
Matt

Terryw wrote:

Mortgagees have fiduciary duties to get the best possible price and so do executors. They are also more difficult to negotiate with so I think this will be a hard way to find an undermarket value property.

This is true, sometimes better deal is the private vendor in the final few months prior to handing the house over to the mortgagee (if they have equity but are otherwise in financial stress).

Occasionally if unfinished, ugly or requiring work mortgagee properties can pass in at auction (as they didn’t quite hit the sworn valuation figure at bidding) and the banks are usually then more realistic afterwards so decent deals can occur but don’t get your hopes up of buying half price houses.

Haven’t seen many updates to this thread recently.

I have a recent client deal that looks to be our strongest cash flow deal this year – purchase price negotiated at $650k, current rental (house plus legal/approved Granny Flat both tenanted) combined at $810pw for around 6.48% gross yield. That will drop to 6.4% or just under as a few repairs are required but no major renovations needed.

The best thing is this is in the Wollongong/Illawarra region – so a decent capital growth region. The buyer definitely benefited from a motivated seller moving away being willing to negotiate. They paid over $700k some yrs ago.

How are people going finding positive cash flow deals in 2019?

Hi Traca,
If they are still receiving commissions from builder/developer they are still NOT acting in your interest. All of the original advice provided by myself and the other posters in 2016 should still apply. Commissions are higher than ever which can result in nasty high pressure tactics. See recent articles about some commissions on units. https://www.afr.com/companies/financial-services/developers-offer-advisers-90-000-to-flog-high-rise-apartments-20190813-p52gk1

The take home message is still the same as Benny says, do your research, ask good questions and either be prepared to do things yourself or else build a team of actual professionals who will do quality work for the fees they charge you. If using a Buyer’s Agent they really should be REBAA accredited for example this will ensure they are not selling property as it is part of the code of conduct.