Forum Replies Created
I have 3 IP in regional NSW and I live in SA so totally remote managed. I have a rental manager who I trust, don’t be afraid to change if you find they don’t provide sufficient info. I ensure interior and exterior inspections and I ask for photos to be emailed to me of any issues (repairs or damage). My property manager has a handyman who fixes the minor things at reasonable prices so no need to bring in the Plumber etc if it isn’t needed.
Gardens are basic and need no work from tenants, I aim for no additional work – ours have established gardens that haven’t even really needed watering even through the last 3 dry years. The weeding I give them a chance but if the manager notices it isn’t done the tenants are put on warning and the next time a contract is signed I include a seasonal visit by a Jim’s equivalent.
How small is the country area you intend to buy in? To minimise the effect of unemployment levels we chose regional centres not small towns. Afterall one business closing in a small town can have huge implications.
Also, we travel to the towns once a year. That way we can have a quick look at the property and assess what needs doing.
The property manager is paid 8% and on two of our properties it is pretty much money for nothing at the moment as the tenants are great (pay on time, look after the property, deal with minor issues themselves) in the other property they have to do a lot more to earn that fee! (Thankfully the tenant’s lease is ending in a month and not being renewed) I think they’d want someone else to change a light globe if it blew!
Cheers
Ruth
I think it is rare that people would drop $65K+ but not totally unrealistic, I spoke to a lady this week who is trying to sell her elderly mother’s home. The mother has gone into an aged care facility and the lady just wants the house to sell soon. She said it was $345K but they dropped it to $295K over the weekend because 1. they want it sold and 2. they thought they’d get more interest by dropping it below $300K, some people may have had $300K as their ceiling. It isn’t in our price range or I may have thought it worth looking it. So it’s not unheard of but definitely rare.
If I was putting in multiple offers I’d be concerned in case more than one was accepted but I guess the caveats in place would prevent that from being an issue. When I put in an offer I only give 48hrs before the offer expires so you can still put a lot of offers on the table in a short time but just not concurrently
Cheers
Ruth
Hope they grant the extension for you. We had the bank come through only hours late and the vendor sold to someone else within 2 hours of when our settlement was meant to happen – and they sold for $30k more than they were getting from us – it will always be the one that got away!
I have had a huge shed removed that was asbestos and on the same property a bathroom reno which involved asbestos removal. The shed was about 4 carports wide and closed in on 3 sides (to give you some idea of the size of the job). We removed the shed as it was damaged and unslightly, the removal costs were about $1000 of which most of the cost was the asbestos removal. This was a regional job and the local salvage company had an asbestos removal license. It was done very professionally. The bathroom asbestos removal was done by a builder who discovered it when renovating our bathroom – removal was much more slap dash in the way that he didn’t wear protective gear as he said he would maintain the pieces in whole sheets! I know that if the sheet is whole the safety isn’t an issue but I would be happier to err on the side of caution!
Ruth
I think one of the big things I have learned recently on this forum is that is is “hard to find cashflow positive properties in many areas” what you need to do however is to “choose the right property that can be made cashflow positive” whether it be through renovation, subdivision or other creative ways of thinking.
In summary perhaps cashflow positive properties are often made and not bought
Cheers
Ruth
We did have one of the properties as a PPOR but my husband is a scientist and we move with contracts. As a result we have lived in 4 states and overseas in the last 10 years so buying a house to live in hasn’t often been a priority for us. In the last few months we have moved back to our ‘home’ state so it is now time to settle down and once we decide this is it to buy a PPOR.
The $110K unit is a 2 bedroom unit in a regional centre so it isn’t a small student housing property or anything.
Thanks so much for your input Scott, Richard and Terry
Cheers
Ruth
Can anyone confirm if I am on the right track?
Ruth
Certainly is possible though. We put in an offer on a place and it was accepted. We stated subject to finance etc. The bank came through less than an hour after closing time for the agent and the vendor accepted another offer. Worst thing was they ended up selling to that vendor for $35K (YES you read right) more than we offered. We knew we had a bargain at the price we offered if only the bloody bank had come through in time.
Ruth
Broken Hill is a long way from everywhere though. There are plenty of regional areas a lot closer to major cities, sure you won’t get a place for $120 but there is a lot better value if you are looking for a place to call home. We had a 4 bed, 1 study, 2 bath, place on a 1000m block in Albury, walking distance from the city centre – got it for $230k. Only trouble is we had to move back to a capital city as my husband’s job is rather specialised.
Now in Adelaide and we would never find a place like it for that price
Oh well
There’s someone on this board, Jane at Hotspace http://www.hotspaceconsultants.com
Not affiliated at all, never used her but I do subscribe to her newsletter and what she does may be up your alley
Cheers
Ruth
We rent ourselves and personally prefer floating floor boards or tiles. I have found, in the many places we have rented, that landlords are apt to put in cheap carpets which attract stains no matter how hard we try to avoid it! As far as tiles or floor boards well that depends where you are. When we were in the alpine area of Vic we didn’t like the tiles as they were so cold, but in a warmer climate maybe that wouldn’t be an issue. If I could have any flooring I’d want though I’d choose good quality floating floor boards, they look good and are easy to clean and take care of.
Cheers
Ruth
I am not in Sydney but when we moved from Adelaide to the US and then back a few years later to Perth, we used one of the big companies. I think it was Kent one time and Allied Pickfords the other. We move a lot and have done it on the cheap once but never again – then again we don’t pay for it as our employers do.
Hope the move goes well, I don’t find it gets any easier!
Cheers
RuthThanks so much for the info Mike.
Feel like we now have the info needed to make an offer, will take a trip and look at the place this week.
Cheers
Ruth
Thanks for that confirmation Richard. Glad to know I was correct when I thought his advise sounded completely insane. Now to suss out a new mortgage broker!
Ruth
While we are on this topic I thought I’d seek clarification too. We have $30k ready for our next deposit. We contacted our mortgage broker this week and he suggested putting the 30k on one of our IP loans (we have 3 on IO) and approaching the bank for a 100%+ costs loan. I was confused by this as:
1. They are IP loans and so the interest is a deductible expense
2. Being IO loans they have a limit of $5000/yr in surplus repayments or you pay a penalty for paying extra
3. Wouldn’t the bank be more inclined to give us an 80% than a 100% +costs loan?What do you think?
Thanks
Ruth
I was at morning tea today talking with 4 ladies in their 50s. One mentioned a desire to buy another house and talk turned to mortgages. All, at some point in the discussion, said the words “I don’t know how I will ever be able to afford to retire”. Now as I am very close to 40 the thought of retiring at 40 is an impossibility but I NEVER want to be in my 50s and saying “I don’t know how I will ever be able to afford to retire”. I think it isn’t that people necessarily want to give up work completely but they don’t want to be in the position where they have no alternative. I know my husband dreams of spending 6 mths a year fishing in various streams around the world, if you work full time until you are 65 (or more) when will you get to follow your dreams?
Thanks guys, that clarifies things for me
Ruth
We had termites in one room in one of our properties and we use termite baits, now that was a waste of $$ within a month they had travelled through a join in the concrete floor and were in another room. It cost us $5000 all up to treat them with chemicals. Since then we get the property thoroughly checked each year and no termites so far 2 years later. Our neighbour had extensive termite damage (didn’t tell us until we mentioned we had them!!!), she used baits and they continued to chew through her house, even more extensive damage later, she used a cut price enviro friendly company and has had to keep treating them as they keep coming back. Go in hard to wipe them out if you ask me! Each year I ensure all our properties are thoroughly checked.
I have found contacting tenants to be useful. I’ve had managers call me about little things and when I contacted the tenants they just wanted permission to do a simple repair. Having said that there are 2 groups of tenants those who bug you continually about relatively minor things e.g dripping taps and those who recognise a problem and fix it e.g. replace the washers themselves!! At the moment we have a set of tenants who annoy the heck out of me as they call for simple issues, come Dec I will be looking for new tenants!!!!
I think it is possible propertyjockey. We have what we consider a negatively geared property (although after tax it isn’t) it costs us $18/wk once all costs are considered: insurance, management fees (it is 1000kms away), rates, water rates and factoring in 4wks a year of no tenants. Many may consider that positively geared! Sure interest rates are set to rise in the next 12 mths I am sure but $18 isn’t a lot. As others have said, there is often a bit of fat in the budget that could still be trimmed.
We never buy lunch out
Take away is a rarity
We gave up alcohol for a year to save (now its clean skins!)
Many clothes are bought from op shops
Libraries instead of buying books
There’s no state of the art technology at our house
We have recently undertaken the challenge of reducing our grocery shopping by $50/wk netting us $2600/yrI think property investing is accessible to anyone, it depends on the degree of sacrifice you are willing to endure.
