Hi all, just scanning the pages and came across the post. Certainly a variety of thoughts and comments. Just want to encourage you that the SA market is still strong if you look for the deal that no one else can or wants to make work. Having said this, yes – there is an element of risk involved. Others call this ingenuity.

For those from interstate – yes the prices may seem a little cheaper, but think about the reason *why* this is so. The answer (IMHO) is that people generally earn less that in, lets say Victoria. This translates into weekly payments as well – these people have less to spend on your property.

The deals are out there, and yes, I’ve bought a couple of properties recently.

Have a great day!

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hello Y, good question.

Understanding your own finances is always the first step before investing as there is no sense in creating extra income if it’s just going to disappear by creating more doodads!

I teach my tenants some basic budgeting skills before we give them the go ahead to look for a house. Typically use the approach that John Burley [ohno] uses:

Step 1 – Give Away 10% of Gross income

Rationale: What goes around comes around. If unsure about this approach start with a smaller amount, ie Sponsor a child (www.compassion.com.au)

Step 2 – Pay Yourself 10% of Gross income

Rationale: Use this to save for deposits, investments or an Automatic investment program – read wealth creation. Check out ING Direct (www.ingdirect.com.au) or LLL (www.lll.org.au) for savings accounts that pay reasonable rates but don’t charge any fees. I prefer LLL as they provide financial support community projects such as Schools and Colleges.

Step 3 – Put 10% of your gross income into repayment of existing bad debt.

Rationale: Make minimum payments on all your loans. Then take your smallest loan and add the 10% towards the repayments. The loan will be gone pretty quick! Once the first loan is paid, tackle the next largest one by making minimum repayments and adding the minimum payment from the paid loan and the 10%. Pay that one off and the start on the next loan. Pretty soon you’ll be debt free!

Step 4 – Never use credit!

Rationale: Start to live within your means. At first this may be a little depressing, but delayed gratification never hurt anybody. Do what Derek said above – identify all your incomings and outgoings, then shave! (Keep your goals in mind).

Step 5 – Spend the rest and party.

Hope this helps, I’ve used this approach myself and am happy with the results. You may like to check out The Geyer Group (www.thegeyergroup.com.au) who specialise in helping with the hands on of the above example.

Kind regards,

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hi there Nathan, we use Blue Onion New Media for all of our stuff. Very proffessional and reasonable. Check out http://www.blue-onion.com.au/

All the usual disclaimers apply.

Have a great day!

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hello Misty,

check out this thread here
I need to let you know that I’ve not been involved with Summo or the stuff he’s organised, but it should be a good starting point.

Have a great day!

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hello Rugbyfan, thanks for your reply. Yes, I agree with you that this statement (as with any other) should come under scrutiny. It gives others and us an opportunity to understand and clarify the point being made.

Firstly, Kirribilly isn’t for sale at the moment and I can’t see it being on the market in the near future. The point I’m making is concurrent with yours – in this industry we need to be reasonable in our expectations. When I say any house I mean just that. I don’t include mansions or Government property. I suppose we could pick this to bits if we wanted to, but I’ll leave it there.

The other (more pertinent) point is that many people focus on getting *just* the right house and then busy themselves looking for the tenant. My view is that the focus should at all times be on the tenant, then the house. For instance, why not build a register of tenants and when you find the place that you think is suitable, send them there during an open inspection. Let the prosepctive tenant tell you what the place is worth, let them do the legwork.

Much less stress <grin> and the tenant has ownership of the process.

Have a great day

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hello tonkaau,

welcome to the forum, and congratulations on taking the plunge into the South Australian realestate market. I suppose the reason there isn’t so much activity on the forum regarding the SA market is due to the limitations placed on us by the SA Government regarding wraps. This, however, shouldn’t stop anybody buying some well placed Buy/Hold properties.

If you need more info I do know of a group that meets regularly here in Adelaide, however can’t give you specifics as I don’t attend. Do a forum search for posts by “summo”.

All the best,

Marco

Get more out of Renting!
http://www.positiveproperty.com.au

Hi dejaWCD,

there are a couple of views here. One of the decisions that you need to make is how you want to realize your profit. Do you want all your cash flow now (and not pay off any principal), or do you want to take the balanced approach and take a little less cash flow, pay a little principal off the house and even make a little capital gain? Bearing in mind that if you take all your cash flow now you are not leaving much room for mistakes along the way, i.e. if your tenant moves on how do you deal with the situation? Also, you would be relying on the market to grow for your capital gain.

If you want you cash now, go for the LOC. If you want to take the safe option (IMHO) then go IP and have a little principal in reserve.

When applying for finance, I don’t use the equity of IP 1 to finance IP 2,3 &4. If you choose to (and it is a valid option) then be aware that when IP1 wants to cash out you need to refinance all the other IP’s as well. Keeping things separate means that you may take a little longer to achieve your goal, but it also give you a little more flexibility later on down the track.

Hope this sorta makes sense. I’m certain other will have input as well.

Have a great day!

Marco

Hi Bill, great work! Would really appreciate this too!

Kind regards

Marco

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