You will do just fine, congrats on making the big plunge to buy![]

Lifexperience

GR,
I see you avoid all of the control disputes and disagreements between syndicate members by taking the balance of power with 5 or 6 places out of 10. Do you still get a legal contract drawn up between syndicate members (ie to make them mules, or is it just mutually agreed)

In the setup above, does the unit trust own the property and shares in the company?

Lifexperience

Jenny,
I disagree with Dazzlings surprising suggestion at selling at the first bit of difficulty on one minor aspect of an Investment Property…………………………………………………………..and Dazzling, I’m surprised that this came out of your mouth at all! As we all know you never shy from a challenge.

Stay true to your research on the area and why you chose this property, especially if ties in with a future plan for you. This does slightly cross over from investment to lifestyle decision but isn’t that the end result for our investments anyway.

Remember it is still the middle of winter for coastal areas and I would hold out at least til summer if you can afford it, and maybe try for the holiday rentals, it may just make up for the quiet time over winter (not that far away)

I would exhaust all possible creative avenues and marketing before pulling the pin. In areas that have great capital growth potential but slumps in tenancy demand, things like lowering the rent and adding tenants “wishlists and whims” is just part of meeting the market wrt renting the place out.

Ok, so maybe you underestimated the ease with getting a tenant “bank” this lesson and remember to include this in research with your next property. Just keep lowering the rent weekly until

A: you get a tenant
B: you canny lower the sail no more captain, and then it’s time to abandon ship.

my opinion!

cheers

An worst case exit strategy is a good idea.

Lifexperience

redwing,
joint owners in personal names. We wrote up an agreement detailing as many of the money issues as possible. Unexpected maintainance, one partner wanting to sell, how payments were to be done, and as much else as we could think of.

There is definately a risk dealing with other people and sometimes we have conflict when one person disagrees with another. We just have to thrash it out until we reach a compromise.

It is really improving my people negotiation skills. I have found that a 3 way partnership is a little more balanced than just 2 people. As there is always a third party who will hopefully give a grounded angle to any disagreement. Procrastination has sometimes been an issue, with too much talk going nowhere.

It is a deal that I would not have been able to do on my own, and at this stage I have no regrets.

We decided to go for a joint owners structure for simplicity and to keep costs down. As it turns out here in Vic, we will probably save a few extra thousand as the Vic. Govt. are set to penalise trusts with a big Land Tax increase.

Lifexperience

Possibly consider wrapping or a lease option on the property, if you can’t find a tenant with some of pro-actives ideas.

I have a empty house in a town with many similar rentals and many houses for sale that have just come on the market too.

I am trying foxtel digital tv as an incentive, it might not get a tenant straight away but when tenants do start looking, at least mine should be ahead of similar rentals in the area.

And don’t fret too much, remember the tax deduction is a bit bigger when you hav a vacancy.

Good luck!

Lifexperience

They would all appear to be good investments.

Both have their pros and cons.

For me, I am still putting a large percentage of my investments towards property as personally the ability to easily borrow 95% of property from the bank and also the ability to increase the value of the property with a little elbow grease and extra yards from my self. Even in a flat mark

Although I understand Margin loans for shares are now becoming more widespread, Out of interest What percentage LVR can you get at the moment clones?

The article was good and gave a fairly balanced view of the different events, considering it came from the ASX.

I like the first line of the article

Russell Investment Group – ASX Investment Performance Report

The ASX Investment Performance Report by Russell Investment Group found that, for the 10 years ended 31 December 2004, listed property has outperformed all other investment sectors.

Interesting you must admit, that they still gave listed property shares such a good rap. Maybe property aint that bad, eh?

cheers.[]

Lifexperience

Most people I know who buy and hold property plan to hold for 5-10 years maybe more.

It is easy to compare shares to property in any single year and note that they are 20% in 2005. Shares are historically more volatile and could go down 20% next year easily.

But the strategy from many seasoned property investors for buy and hold properties is to buy WHEN you can, as the long term will prevail.

What were house prices 20 years ago? What do you think property prices might be in 20 years.

Listen, shares can be a great investment, but you aren’t really giving investment property a fair go comparing over 1 year!

You don’t have to expertly pick the top and/or bottom of the market to make good money from property.

There is bargains in every market! Like OTP apartments where a vendor overpaid a couple of years ago, looking short term and now has to sell in a hurry……[devil]

Lifexperience

g7,
ooh i’ve smashed a lot of cars. IT sux.

Thats another reason I drive older cars. I can sleep at night and not worry about a scratch from a shopping trolley or some jerk who can’t drive.

My SANF is ok with hundreds of thousands of dollars in investment loans.

But I would be an insomniac worrying about a nice new shiny car. I love cars too much……………

The old cars have LOTS of steel….

Classic not plastic baby!

Lifexperience

Leo,
I am only small time investor in that I still work a regular job and have a modest income.

I have gone into a 3 way partnership that I suppose is effectively landbanking. About 70 acres of rural land with a house on it (now tenanted by previous owners) close to a Major Regional Centre.

It is rural and negatively geared. However it is surrounded by 5 acre country properties. There is a market for people who want a big country block for a few horses and motorbikes(3-5 acres) BUT not so big that it requires a LOT OF MAINTAINANCE (15 acres +) IE: fencing, weeds, grass, cattle, .

We have some cows on it. OH! you should have heard the cow cockies snigger as us city slickers turned up to the stock auctions and bought some steers and then tried to hand shove them into our trailer……. the young steers are very heavy and stubborn we soon learnt.

So I guess you could call that land banking. We plan to hang on for 5 years or so, and then subby and sell.

Something that really stuck in my mind was talking to the farmers at the auctions, some that had 100 acres or so in the middle of no-where 5 years ago. The same land they bought has became urban fringe with the melbourne sprawl. And even allowing for a property boom, theirapital gains when they sold to developers was a LOT more than 7% p.a. you may expect from residential property.

Land in Australia is Cheap. Compare similar agricultural block sizes to that of Europe for instance.

Be aware that in Melbourne (and maybe other capital cities), that the city has drawn a line around the fringe, and deemed that all development til 2030 will reside within these boundaries. Obviously looking after their own interests by jamming as many people in and around existing infrastructure. Land just inside this boundary is being gobbled up by new house and land devolopers. Land outside may have to wait a long time to get their cake sliced up.

Land on the fringe of major regional cities would be a very good buy on the other hand. Often for the same price as a house in the inner city.

Large blocks near the coast may also have potential.

Or even houses in the inner capital city growth suburbs with enough room for another dwelling and close to shops and facilities, would probably get an easy stamp from town-planners for a small sub-division.

It would require thorough investigation of what is happening in any area that you chose to consider “landbanking” WRT demographics and how they are changing, council guidelines and current developing approvals, what boundaries the bigger developers are pushing due to demand from new home buyers, where you think all the retirees from Australias baby boom are going to live, where all the new single households are going to live, and the usual research you do in an area.

I don’t want to reassure you to buy, as you really need to completely satisfy yourself and thoroghly research an area first. There are still large expanses of land in Australia that will still be sitting there doing nothing in 50 years time.

It is a big country with only a few people around in the end. Be careful of exactly where you buy.

Lifexperience

I’d guess a conveyancer would be the easiest, but if you wanted to do it yourself maybe contact the titles office…

I’d Try the conveyancer who bought for you, they might give a discount as they have all the paperwork from last time.

You will probably have to pay stamp duty on the 20%.

I would also guess that you would have to pay Market Value for the 20% (and tax on any capital gains you make)

Check with your accountant.

If it’s a gift, it might be different…..mmmm?

Lifexperience