Forum Replies Created
What I read in the newspapers about this was that the lender’s would put in the initial 30% to enable you to buy the place, take 60% of the CG as Mel said but would not contribute to any ongoing costs or any renovations that you wanted to do. That would all be at your cost. Didn’t sound like a good deal to me. Still, if you planned to stay in the place forever and weren’t planning to ever sell, then it would be worthwhile.
I would be more for it if they only took 30% of the CG, not 60%. I don’t see that as fair.
If I were you, I’d go to the vendor with an offer such as what Steve does with his bad tenants. Go to the builder and offer the money you propose and say that they can take the extra money, finish the job and move on, or you can use that money to take them to court. Either way you will end up with the house (hopefully), just hope they take the money so you don’t have to go to court.
Hi Lynchy,
Most real estate agents in Canberra seem to charge around the 3.5% mark, so if it were only 2% you were looking at, that would be a bargain here. I only know of one real estate agent that charges 1.75% flat rate on all sales, and that is a relatively small real estate agency, so maybe that’s why.By the way, the percentage of fees here you pay goes up based on the value of your home. ie. for a place under $200,000 you might pay 2.5%, but for one over $300,000 you’d more than likely pay 3.5%. I can’t comprehend how they can charge a higher percentage just because a place is worth more. Does it take more effort to sell a place that is worth more (although close to the median price anyway)?
This is why I don’t like agents.
1) What was the prime motivating event in your life that created a focus on the need to invest?
The fact that my parents worked each for 40 years and have nothing to show for it except a nice house. They live a pretty good lifestyle now, but wish that it was a more secure life. They are really worried about running out of money in the future. I want to do everything possible to ensure that they or myself and my husband never have to live uncomfortably.
2) What have you in fact done about it since then, and rate your achievment.
I have bought 2 IP’s. The first one I lived in for 12 months so that I could get the $14,000 grant, the 2nd one I am now living in until my husband and I can do it up enough to rent it out (it was brand new so we need essential things like curtains and a dishwasher). I would only give myself a 2 out of 10 as I have a long, long way to go in my journey, however I know I will succeed.
3) Based on your current performance, how long will it take to reach financial independence?
Approximately 10 years as our equity is building up constantly allowing us to buy more properties.4) What are you currently doing to improve your plans?
Putting as much money into the mortgage to get it down enough that we will have plenty of available funds when we decide to buy our next place (waiting to see what the market does first, especially with interest rates). Also reading as many books as I can get my hands on about investing and going to forums like this one to hear of other’s experiences.5) What is your ultimate goal; and will it make you happy?
To be financially secure. It will definitely make me happy as I will be able to choose when to work, play golf whenever the urge passes, and travel freely around this great country.6) Which is more important: The goal or the journey?
I believe both are important. It’s important to experience the journey so that you can pass on your knowledge to others and it is important to meet your goals as the feeling of achievment is like no other.Cheers!!
Where is Balwyn? Which state?
So I don’t have to rely on Superannuation. The taxes are too high and keep rising!
Fudge111, from your post I’d say you have a lot to learn about money and investing. To say that someone with a family is silly not to be able to live on $70,000 is just plain naive. I really think it would be wise for you to go out and find someone who has a copy of the game Cashflow 101 and go and learn about the value of money. This might teach you that it’s harder to get ahead the more income you earn as with more income you have more expenses, therefore it’s hard to adjust your lifestyle so that your passive income will outweigh your expenses. This might teach you something useful.
Hi Kay,
I am guessing, but I assume that the website he meant was http://www.wiseinvestment.com.au.
Hope this helps,
LuckyoneHi Robo,
The house you have found doesn’t quite meet the 11 second rule, but it’s not far off. To work it out you just need to divide the rent by 2 and multiply the result by 1000.ie. 95 / 2 * 1000 = $47,500. This is the maximum price you should pay for this house according to the rule. But remember, the rule is just a guide. This house is very close, you only need to knock off a few thousand dollars to have it meet the 11 second rule.
As far as buying a place worth $100,000 instead, it really depends on what you want. Personally I’d rather get two properties worth $50,000 than one worth $100,000. You then have 2 tenants, so if one leaves, you still have half the rent coming in.
I wouldn’t be too worried about capital gains. Just check that the place isn’t too reliant on one industry as this could cause vacancies to rise if that particular industry left town.
The 14 hour drive may be a problem if you are a hands-on type of person. A good property manager will keep your place in good nick for you though, so I wouldn’t be too concerned about it. Just make sure that they know your limits when it comes to repairs and when they should ring you if there is a problem.
Hope this helps. This is just my opinion, so don’t take it as gospel but to me it makes sense.
See ya!
Hi Bill,
I know you have sent me some of your ads before, but just in case these are different could you please send me them too. My e-mail address is [email protected].
Thanks,
LuckyoneHello All,
Just wanting to know how the rise in mortgage repayments is worked out. I have worked out for a mortgage of $150,000, repayments would go up $31.25, not the $24 stated in the article.This is how I worked it out:-
$150,000 * 0.25% / 12 = $31.25.
Am I missing something?????
Hi Bill,
Thanks for your reply, glad to know I’m safe from a margin call. Anyway, back to work, another long night ahead
.
Thanks,
LuckyoneHave you looked into getting a deposit bond to stop you from having to pay the deposit up front? Also, are you aware that since you are buying off the plan you can delay the payment of stamp duty for up to 12 months or until settlement (whichever is less). This applies in the ACT and I’m pretty sure it’s the same for NSW.
Hi,
This is really aimed at Bill. Do you happen to know what happens if you have a line of credit and prices drop? Can you get a margin call as with shares if the price drops significantly?
Thanks,
LuckyoneGeez, I thought that you were exaggerating about the land tax rates. Anyway, I looked at the QLD revenue site and you’re correct for this year too.
Anyway, it makes me wonder why anyone would want to invest in QLD then. I mean for a place with a land value of $300,000 to cost you $3,095 per year in land tax, is a huge amount to have to bear. Must dampen your profit margin significantly.
Hey Shaun,
What software do you use to calculate your return?
Thanks,
LuckyoneHi Guys,
I think there will be a slight increase in rates to reduce spending before this Christmas which will then be reduced back down to current rates for the election. Slowly they will rise up for Christmas next year once the election is won.
Just my thoughts,
LuckyoneYeah, the Gungahlin house prices have certainly jumped up recently. We actually bought in Amaroo six months ago not expecting much of an increase in the price (we thought it had really peaked there) and the place has already been valued at $50,000 more than what we paid without really doing anything (besides the obvious for a new place of adding carpets and tiles, not many curtains as yet and no landscaping). Pretty good I think.
Wish I had known about cashflow positive investing back then though, I don’t think I would have bought in Amaroo then. Anyway, we’re probably going to cash in early next year and then buy a couple of IP’s and rent once again.
By the way, yes LJ Hooker are very particular about the rental property. After the first month they did an inspection and noted that the place was very clean (they implied that it was cleaner than how we left it) but that the tenants need a base for the bed in the 2nd bedroom (I don’t think that this is really something that can be enforced, but I suppose it shows how particular they are). As a general question, does anyone know if it is a requirement to have a base on a bed in a rental property (with the bed being the renters property, not ours).
Hello,
I would love a copy of Property manager pro, could you please e-mail it to me at [email protected].
Many thanks,
LuckyoneHi,
In reference to property managers for Gungahlin I can’t recommend you a good one, but I can tell you to avoid Independent out there. I have never been a landlord of a property through them, but I have been the tenant for about 3 years (up until the middle of last year). They would have to have one of the highest turnovers of property managers I have ever experienced in my life. Literally everytime we rang up about something (which was about every 2-3 months) there would be a different property manager managing the property we were in and we would have to explain everything about the property to them again.Other than that, if you are really worried about the fees you can always look in the back page of the Saturday property guide and there are a few there who claim to charge 7.7% mgmt fee.
For our investment property we managed to negotiate down from 10% to 9% through LJ Hooker telling them that it was in their interests to give us a good rate as we will be buying many more properties in the future which if they treat us well would all be managed by them.
Make sure also that you look out for hidden fees. On top of the 9% mgmt fee there is also a signing of the lease fee (1 week’s rent), re-signing of the lease fee for existing tenants (1/2 weeks fee), inventory report ($50 each time), sundries ($7.50 per month, meant to cover postage however they e-mail the statements to me so I don’t understand this cost) + we had to pay for all the advertising. I think we could have got a better deal, but this was one of the few agencies we could find where the property manager had been there for more than about 6 months which was an important criteria for us.
Anyway, good luck!
.
