I’d see what it looks like on your figures. Though I would be aiming for 18 months.

Given the current rental market I’m curious as to why the 3 x 1 year lease, rather than 6 x 6 month to account for the rising rental investment market. 2 small rises in rent over 12 months is more manageble for a tenant that 1 big one after 12 months, and you have additional opportunities to reasses the market more regularly. Obviously this is a case by case situation as the $ rental return isn’t the only consideration.

I subscribed to the email list just to see what’s going and for ideas. I did notice a couple of places advertised that I was already aware of myself. One was a unit on the Gold Coast which had advertised large rental returns, though from my figures was based on the potential holiday letting of the unit with a very high occupancy rate, which just doesn’t happen in reality. The other was brand new units about 2 kms from a brisbane university which was clearly designed solely for OS students. For those who know the area the location wasn’t particularly good and the block would see limited capital growth given the asking price and surround properties. I also believe the advertised return was somewhat overinflated. It seemed to me the units were aimed at interstate “investors” looking for something in QLD.

However, there is still some merit in looking closer at some of the places they advertise, but only within areas you have already familiarised yourself with. IMO anyway.

Hi,

We were in a similar position; buying our PPOR in Nov 04 though for slightly less and a slighly smaller loan, we have similar savings, though in shares, and a similar joint salary. We are now also looking for our first IP.

The best advice I can give that has made all the difference for us, is pay as much as you can on your homeloan and, depending on your loan, either put your savings into shares or onto the loan, whichever you feel most comfortable with. We have been paying twice our minimum repayments for the last year, cut back our spending on consumer rubish (though we still ensure we can enjoy ourselves), spent some money on our home that we felt would give the best ROI to the value of our house, and in that time have built up enough equity to get a loan for an IP at around the same price as our home cost when we bought it. We plan to buy the IP in the next couple of months, with a view to buying another in 12 months depending on the market.

You indicated “(not legal)” which tells me you’d need to do something ‘under the table’ to get the $690 total rent.

Is this one near Brisbane? If so, you’ll find that its leased against Brisbane City Council tenancy laws, which causes insurance issues and other problems.

Hi Hotshot,

I too have considered looking at the investors club to source property but there are a few things to keep in mind. I haven’t got any first hand experience, only some factual information I’ve been able to gather.

My concern is that they are a club that has a private enterprise at its core. A business which has relationships with developers and a real estate agency. Neil Jenman’s website has a number of articles available on the club that are worth a read. Neil is known for his ethical approach to property. The articles can be found from http://www.jenman.com.au/NewsQuestions1.php?id=176

The actual club part of the organisation seems to be quite possitive (i’ve subscribed to their newsletter), though its the businesses at the centre that are a bit dubious. Particularly given that its titled a club, which generally means, not for profit.

It would be interesting to hear some first hand experiences though.