Forum Replies Created
Offloaded an IP in Mt Isa about 4 weeks ago. How very decent of you to wait until the house sold before you posted that!
Cheers
K
I have just sold my PI in Mt Isa and wouldn’t buy there again.
I bought there just over 1 year ago at a 10% return and have just sold it at about an 8.2% return (so a nice healthy gain of about 25% in the last year).
Problem is, it has come despite several sleepless nights over the terribly slack job done by the PM there. I have had to chase up rents, work I have authorised but has not been arranged, etc. Because there are so few PMs there, they are all a bit slack and there is not much you can do.
Also, rents seem a bit overpriced at the moment because there is such a shortage of properties right now. That will settle down and I was concerned that we would not be able to maintain our rent, thereby lowering the value of our property.
So I hightailed out of there as quickly as I could.
If you still want to buy there though use a local REA. They have a realistic view of the market (they really say that the market has levelled out there) while the ones from Brisbane will tell you that the market is booming. The local agents say that you can get an 8 – 9% return while the others will try to sell you a 6% return property.
Good luck though.
K
Hi Dutchess
As an ex lawyer (I am now a fulltime Mum) I will give you the best advice you will get on this subject.
Go and see a lawyer who specialises in Family Law. Don’t listen to people who tell you about the situation of a friend of a friend. It is a messy area that is open to interpretation.
Good luck. I hope things work out with this bloke.
K
Just going back to whether a tenant could sue a landlord, it would very much depend on what the damage was.
If there was a building problem like a big hole in the floor and the tenant fell in it and injured themselves then the tenant could probably sue. But the landlord would have to have reasonably known that the hole was there. If the tenant was complaining about the hole for a while and the landlord was doing nothing about it, then the Court would probably decide in favour of the tenant. But if the hole was there because the tenant took a hammer to the floor then probably not!
As for lack of security, this would be a grey area. I would expect that a Court would find that a landlord has a basic duty to provide locks on doors and windows. If these were provided and the tenant wasn’t using them, then I doubt that a tenant would be successful.
If basic locks were installed then I don’t think that a tenant could sue if the property was broken into and things were stolen.
Ethics and law are very different. An ethical duty to a tenant (such as putting extra security on a property in a high crime area) is different to a legal duty to a tenant. I expect that legally, a landlord would be required to do no more than provide a reasonably safe and secure property.
I think it would be very difficult to prove that a landlord is liable for loss/injury to a tenant because of a breakin. Nevertheless, I have Landlord Protection Insurance on all my properties!
Cheers
K
This is not legal advice and should be used as a guide only.
Hi Carlin
Good luck with a new tenant.
I have Landlord Protection Insurance with Terri Scheer. The only time I had a problem with a tenant (he absconded owing rent) my PM made the claim with Terri Scheer and all outstanding rent was paid without any problems.
I am also lucky because I have an excellent PM. She is not in SA though. Maybe you could ask on the forum for good PMs. When I lived in Adelaide I went through Mayo & Co. I think the PM’s name was Margaret. I thought she was excellent. That was a few years ago though. I don’t know whether she is still there.
Cheers
K
Hmm Geoffrey
I’m not sure that telling someone who has just managed to get out of ‘arresting debt’ to blow 2 – 5 grand just to avoid having to tell someone they don’t want to go guarantor is very sage advice.
Or maybe it was satire and I’m missing the humour in your response.
K
Ah, this is right up my alley.
I live in Katherine at the moment. I don’t think the return you have mentioned is very good at all. I wouldn’t be buying here unless there is AT LEAST a 10% return. If I look hard enough I can get 10% returns in Darwin and at least there is capital growth in Darwin. There really doesn’t seem to be any capital growth here. Also, my recollection of recent REINT stats was that Katherine had about a 9 – 10% average yield. That would make your purchase a bit low.
Have you physically inspected the property? There are some really bad houses next to quite reasonable houses here.
I also thought I’d add my two cents worth on property management. I have an investment property in a reasonably small town of about 20,000 and the management is disgraceful because there really is no competition. I will never again buy in a small town.
These are just my thoughts. Are you from Darwin? If so, I would look up there if I was you. I think you will get more bang for your buck.
Good luck
K
Hi Wade
The best legal answer I can give you is that ‘it depends’. I studied for 5 years to learn how to say that!
It really does all depend on why the neighbour build on your mate’s property. There are a few technical ways for the neighbour to legitimately on the land without recourse, but they are very rare indeed. One reason (VERY simplified) is if the neighbour had use of the land for about 20 years and your mate or his/her predecessor knew about it and did nothing about it then the neighbour may have a claim to that portion of the land. But this is VERY rare.
The probable outcome will be that the nieghbour will have to remedy the situation, either by knocking down the part of the house on your mate’s land or by buying that part of the land from your mate.
How long has your mate owned the land. If it was a recent purchase, I query why it wasn’t picked up during the searches. If it wasn’t picked up and it should have been then he could sue the conveyancer.
Your mate really should go to see a solicitor who specialises in the area.
Cheers
K
*This is not legal advice and should not be construed as such*
Hi EllyH
I can’t help but wonder whether you are not finding the properties because you are only seeing what you want to see.
Hellman DID help. He told you to read Steve McKnight’s 2nd book and learn how to make properties CF+. They are still out there (sorry to disagree with you bob the worker and, to an extent, markpatrick). I have bought 4 in the last 18 months and they are all returning at least 10%. I have had the opportunity to buy plenty more but I didn’t because I use proper risk management and don’t just buy because the property meets the 11 second rule.
Yes you can read books until the cows come home but it doesn’t sound like you have read Steve’s book properly. Generally speaking, the 11 second rule is not the place to start. You need to look for properties that, with a bit of work, will meet the 11 second rule.
Will I tell you where I find my properties? No. That’s partly because 18 months ago when I started out I had to do it the hard way and learned #$%@loads in the process (the old teach a man to fish principle). Secondly, just telling you where I get them won’t mean that you will get them. I have worked long and hard to build up contacts in the areas that I buy and I have access to properties that the general public doesn’t have.
I have previously put a post on the forum about where to start. It is under the heading “Positive CF Property – are they out there?”
Good luck. If you are serious about property investing you have a lot of hard work ahead, but you will reap the benefits.
Cheers
K
Hi Misty
Buy the Australian Property Investor from your local newsagent. OK its not free but it is the best $8.00 or whatever it is that you will spend each month. I subscribe to it and often I will remember something I read in a previous issue that is relevant to what I am doing at the moment.
Cheers
K
Oh. You told them you were at your limit. That may not have been such a good thing to do.
I used to do a lot of negotiating in my job – I was a lawyer – but I still don’t really understand how RE negotiating works. I know of people who put forward their first offer and tell the agent that it is their first offer. I don’t see the point in this because if the agent is acting in the vendor’s best interest (and they don’t always) they are of course going to tell the vendor that the purchaser has more money to play with.
When I negotiate I tell the agent that I have a limit. I don’t say what the limit is and I always back up my first offers with reasons for it, eg, independent valuation (but I never disclose the independent valuation). But I do know that when you say that you are at your limit, the agent usually believes you and doesn’t call you back.
In this case you are dealing with the owners direct. They will probably call you back if they get a higher offer and see if you can throw a bit more money into the purchase. It all depends on whether they believed you were at your limit when you said you were.
As to negotiating in general, I would never disclose my limit unless I was actually at my limit. I would just intimate that I do have a limit. Justify your offers. A really good way of doing this is to do your research. Know what other properties in the area sell for. You will be surprised at how little research vendors (and even RE agents) do. I have in the past managed to convince a RE agent that my research was more valid than theirs and purchased a property at MY price which was way below the asking price.
Of course, this is all just how I would go about it. I would be interested to hear how others go about negotiating. It may even be worth starting up a new post on the subject.
But if no-one offers more money in the meantime, then you do indeed have a very cunning plan. I like it a lot.
K
Hi Willie
I saw that this topic was about to slip off the first page and I thought that, in case you forgot about it, I would reply and keep it on the first page.
Your question brings to mind a line from Moulin Rouge that does something like this:
“Never fall in love with a woman who sells her body. IT ALWAYS ENDS UP BAD”.
I think what he was REALLY trying to say was “Never go guarantor for someone. IT ALWAYS ENDS UP BAD”.
Seriously though (although I am very serious about not going guarantor) you have just managed to get out of debt and are probably sleeping well for the first time in God knows how long. Why take such a massive risk for a return that may not be there?
Of course, that’s just my opinion. Or you could listen to the opinions of all the others who have responded!
Protect yourself to get ahead. Take calculated risks. This does not seem like one of them.
Good luck
K
I am a fulltime mum and at the moment my husband is in the Middle East (he has been for the last three months but comes back next week. Woohoo!) so I am working about 22.5 hours per day.
I probably spend about 3 hours per day investing, that is, looking for properties and doing the paperwork for the ones I have, as well as a bit of sharetrading on the side.
My husband will quit work at the end of next year and we will both invest full time, when I expect that we will still be putting in fulltime equivalent hours, me in finding new investments and doing all the paperwork and him renovating the properties we own.
My question: If you had enough equity that you could stick it in a managed fund and live comfortably off the returns, would you sell up or would you keep investing?
Cheers
K
Don’t do anything. You have just made an offer. The ball is now back in their court. If you reapproach them you will just seem desperate and I have met some very shrewd old couples in my life!
Either they will get interest in their home during the Octoberfest or they won’t. It seems to me that unless you are prepared to offer asking price then there is nothing more you can do.
If you still haven’t heard from them after Octoberfest then call them again and reiterate your original offer, this time talking about all the things you mentioned in your post.
I expect that if they get any further offers, they will call you and see if you can better it.
Good luck
K
Hi GTR
I am familiar with the Darwin area. It is currently being very kind to my equity levels.
For Capital gain go houses. For yield go units, although I believe there is still some capital gain to be made from units, particularly in Palmerston and the northern suburbs.
Good luck
K
For potentially 10 thousand bucks difference, I would get someone around to quote on repairing the whiteant damage. You will find out quick enough whether there is damage, and if so, how much it would cost to repair.
But that depends on how desperate your father is to sell. If this is the only offer that has come along, you may be best to just take the new lesser offer, but if you think the property is worth more and your father is happy to hold out, then tell the purchaser to take a running jump.
I’d be interested to hear how you go.
Cheers
K
Hi Elbows
I bought a one bedroom unit in central Darwin in April this year. I paid just under $95,000 and spent about $1000 on paint, new door handles in the kitchen etc. I am getting $300pw rent. It has always been tenanted except for 2 days with a changeover in tenant.
Now THAT’s CF+
Cheers
K
I take a kind of perverse pleasure when people just don’t get the property investing thing. When I get a negative comment I realise that there is one less person to compete with when trying to buy decent properties!
Apart from that, I surround myself with people who are positive about investing.
Cheers
K
There is an excellent magazine called something like Queensland Property and Lifestyle magazine that has values and yields for both 3br houses and 2br units. The mag comes out every quarter. I’m sure you could subscribe to it.
Cheers
K
Hi operator
Welcome to the forum.
In short, yes you should take the plunge but no, you shouldn’t do it without knowing what you are doing. The market has been around a long time. It will still be there after the forum you are going to.
One thing I would recommend you do is buy the Australian Property Investor. It is a wealth of information and will give you a number of suggestions about what and where to invest.
Finally, just a matter of internet etiquette. Don’t type in capitals. IT SOUNDS LIKE YOU ARE YELLING.
Good luck
K
