Forum Replies Created
fWord, I disagree – I’m not convinced that interest rates are the reason for the retail sector’s current issues. Sure, rates affect consumer sentiment but world issues including the sovereign currency crisis and the US economic woes are possibly contributing significantly more to the feelings of angst that Aussie shoppers are reflecting.
While I am hesitant to suggest that our reserve bank is on the money (no pun intended), I feel that perhaps they did OK with dropping rates as they did to help mitigate the immediate effects of the GFC, and then raising rates sufficiently to give us a buffer but keep the economy at an acceptable rate of inflation.
From where we are now, we have the flexibility of being able to raise or lower the cash rate. Should the world economy start to deteriorate, Australia has room to move to drop rates down to give us a boost that other economies won’t be able to afford. Or we can still increase rates if the need arises.
We won’t see a recession while inflation continues to increase.
However, our “two-speed” economy does present a challenge for our regulators.Perhaps the question shouldn’t be so much “will Australian house prices fall?” but what are we (as individual investors) doing to offset the potential risks, in our portfolios and investing strategies.
Robert Kiyosaki’s books definitely provide insight and education that the mainstream economics and financial teachings don’t.
Kiyosaki himself states that he is a good marketer and like everything, (including courses we attend on investing), his books are a product designed to sell for a profit and provide a benefit in return. That doesn’t mean they aren’t a valuable tool in property investing education.Certainly, people criticise RK’s material that it lacks content, but his intention is not to provide an instruction manual to become wealthy. More people lack the mindset and the overall “big-picture” view, than information on how-to-profit-from-an-investment-deal. How many people do we know who have attended all the courses but don’t seem able to put a deal together, or make the right investing decisions?
My group plays Robert Kiyosaki’s boardgame, Cashflow every month. If you want to learn the mindset to build a portfolio and you haven’t tried Cashflow then do yourself a favour and play the game with a group of investors. (You can play with family and friends but believe me you get more out of it playing the game with people who are doing the deals in real life). I would not be where I am, without the mindset gained through Robert Kiyosaki’s books and Cashflow game.
As for his books- my advice – get a few from the library and read them, make up your own mind.
If you like them, buy them, read them several times and lend them to your friends.As always, Steve gives us good food for thought.
Our Australian property market, like every capitalist market in the world, is governed by two fundamental forces – supply and demand. The demand of properties depends on many factors, but ultimately the buyers are people – and many are investing for capital gains. If the perception of likely future gains diminishes, then demand may also diminish and prices may fall. On the other hand, a reduced supply and higher demand (with more people wanting to buy – eg as a result of migration not matched by more properties available) will result in increased prices.
There certainly seems to be a lot of negative media sentiment surrounding property at the moment (both in Australia and overseas) but equally, Australia in particular has a lack of available property and a low completion rate, with an increasing shortage – which may suggest an ongoing lack of supply and future demand.
While we don’t know what the market will do in the future, current suppression of prices certainly provides a good environment for “bargain buys” for those who are keen. Cashflow positive property with value-add potential certainly looks quite attractive at the moment.
About the resource that Paul Dobson mentioned earlier in this thread – I haven’t seen Paul Zalitis’ wrap kit, but I know Paul and he’s a nice guy.
His website is : http://www.aussiewrapper.com.au/
I went to the seminar with a few friends and thought the whole event was excellent. I agree, it may be hard to justify the price of the diamond seating, but hopefully if you bought the tickets in that area, you could make the most of networking with the others who could also afford the price and get some good contacts!!
I was very inspired after the event and am still working on plans formulated during attending.
The music before the event was an excerpt from O Fortuna, from Carmina Burana, by Carl Orff.
It's a great piece of music. I have been listening to it regularly since the event!
For the translation from Latin, check out http://en.wikipedia.org/wiki/O_FortunaHey A.L.
Congrats on making an offer on your first property.
I’m not an expert, but have signed a couple of contracts in the past.
As far as I know, you can put whatever conditions you like in your contract – it is up to the vendor to accept or reject your conditions.
Once you have both signed the contract, then it is legally binding.There really is only kind of deposit in my view, that is the amount you give to the real estate agent when you exchange contracts. They, or a solicitor should hold this in trust until the property settles.
The 0.25% that the real estate is talking about is the entitlement (written into law) to the vendor should you withdraw within the 5 day cooling off period (would equal $250 for a $100K property). This isn’t really a deposit though.
The 10% deposit is the “standard” deposit written into contracts – you can change this to whatever you want (eg you offered $1000) and it’s up to the vendor if they are happy with that. If not, then they’ll either refuse to sell to you under these conditions, or maybe renegotiate.
Until you have both signed (“exchanged” contracts) they can sell to someone else.
The vendor may not be happy with the 14-day finance term, because a previous purchasor may have fallen through on finance, or they may be wanting to buy another house and have to know for sure that they can sell this house before they sign the next contract? Who knows – ask the Real Estate agent.
Your job is to write a contract that contains all your clauses so that you are happy, but at the same time, suits the vendors wishes. Then you get a win-win (and they’ll agree, which is what you want!).
If you aren’t that familiar with contracts, you should get a solicitor to check it before you sign. Just be aware that someone could beat you to the sale (or the vendor could just pull out) in the mean time.
Good luck!
The Hound
Pasandbec
People who behave like the colleague you describe are usually low in self-esteem, and react the way they do because they feel threatened (either consciously or subconsciously).
The first thing to do is remind yourself that YOU ARE RIGHT. No one has the right to make you feel threatened or bullied. Despite his outwards tough appearance, he is probably very scared on the inside. (Or why would he behave that way?)
If you are wanting to do something about him (and you think it’s worth putting in the effort, ie if you want to stay in your job), try and talk to him about his interests and find out more about him. Be nice to him, even though you hate him. It will really put him off. You may even find you could become friends (maybe not good friends though).
He is reacting to you and everyone else becuase he sees you as a threat (subconsciously), or becuase he is stressed by something else, and takes it out on other people.
You feel the way you do, because you see him as a (physical) threat, and that bothers you. He probably doesn’t realise what he’s doing, and certainly wouldn’t acknowledge it as a problem. Tell him how you feel. There are also anti-bullying laws, but you probably don’t want to go that far?Also, when he is being aggressive imagine him naked, it’s very hard to be intimidated by a naked man.
Or just do what KS says.
The_Hound
Hi Mikala,
My understanding of it (though I am not an accountant), is that you can claim:
1. The costs of interest on borrowings if there is the intent for this property to produce income (eg you intend to rent it, even if you aren’t renting it while it is being built)
2. The associated loan costs (eg mortgage insurance, loan set up fees etc) over 5 years or the life of the loan, which ever is shorter.You cannot claim any travel costs etc relating to purchase PRIOR to the property actually producing income (as a deduction) though you may be able to claim this as a capital cost against capital gains to reduce your CGT when you sell. I think this can be tricky though.
The ATO simply draws the line on costs associated with purchase.Maybe do some searching on the ATO’s website http://www.ato.gov.au/
Or contact the ATO and speak to a consultant.
The_Hound.
Before you sack the agent, schedule a meeting with him / her. Tell the agent you need to discuss managing the property and can you find 30 mins when you won’t be interrupted etc.
Find out why the agent doesn’t want to increase the rent. Tell the agent how you feel (eg that they aren’t doing what you want, and you are considering finding another agent) and that other investors you have talked with are advising you that it doesn’t sound like you are getting the best advice from the agent.
Make a list before you go in, of any issues you want to cover, so you don’t forget.
Don’t be deterred if the agent becomes defensive or tries to make you feel bad. You have done the research, you are right. Don’t be afraid to confront the agent assertively either.
You both might learn something from the experience, and in the end, you can still sack the agent if they can’t explain themselves satasfactorily.
Remember they are working for YOU, not the tenant!! (But it’s in your best interests to treat the tenant the best you can.)
It all comes down to good communication.
The hound.
Have you organised someone (eg a rental manager) to manage the property for you in WA?
A rental manager would be a good person to do the final inspection prior to settlement.
If you are not going to be able to visit the property easily (ie if you are staying in NSW), then you really need someone local who can look after the tenants, manage property repairs, follow up when the tenants don’t pay rent on time etc. Granted, it can be done long distance, but it can become a real headache (I’ve done it).
A rental manager will charge maybe 8-10% weekly rent, and maybe 1-2 weeks rent for finding a tenant, and doing all the “new tenant” stuff (pre-rental inspection, leases, bonds etc). Sometimes it’s worth paying a bit more for a good rental manager, but don’t get ripped off.
(Costs of managing the property are tax deductable)If you are shopping for a rental manager, ask for referees, FOLLOW THEM UP, ask plenty of questions (remember you are hiring THEM, so you have to be happy with them). If they don’t have time or patience to answer your questions, they probably don’t have the time or patience to look after your tenant. (And the tenant is the one paying you!)
The only thing worse than managing your IP badly yourself, is paying someone else to manage it badly for you.
If you aren’t going to view the property yourself, make sure you have complete trust in the professionals you use to carry out your due diligence for you.
If you haven’t used a particular building inspector before, I wouldn’t use one unless they came well recommended by someone you can trust who has used them in the past.
I’ve been suprised what inspectors have missed (or didn’t think were important enough to bring to my attention) on properties I have viewed myself…
On the other hand it is true, they possibly / probably have a lot more experience than you do. But it’s your money you are spending, so don’t rush into anything!
Hi Hound Dog,
Welcome to the forum!
I thought you were me! (But I didn’t remember adding this post). I did pop over to NZ last year, and was checking out properties in Dunedin, while I was on a conference (a veterinary conference, not a real estate conference).I was more interested in Oamaru, prices seemed to be on the rise, but not too high yet, and it seemed like a nice seaside town… Still I chose not to buy re: current interest rates, and easier deals closer to home (in Oz).
I agree Dunedin is geographically a good place to rent with the Uni’s etc, it just so cold!!! A good place to watch, but difficult to find “easy” CF+ deals at the moment.
From The (other) Hound. [baaa]
Hi Pasandbec,
I hope you found a form!
It’s been 48 hours since your urgent post. I have one that I’ve used for a few tenants, which I can email if you are interested. Always willing to share. I consider any form a “work in progress” – can always be improved!
I assessembled mine from various sources on the internet etc… and have done OK with it so far.
How did you go?
The Hound [blink]
Forget the Eastern States teams, West Coast sits tied in the top three! Lets see if we can hang in there for a grand final victory this time! [strum]
Good luck selling your house!
And Welcome to the forum [biggrin]
Don’t rush into any sale, if a real estate has keen buyers, there will be more out there.
Do some research into what your house is worth (eg prices of similar houses in the area etc, or get a valuation – banks will usually under value a house, so take this into consideration).And have some fun!
Hi Kurra (and everyone)
I am in pretty much the same situation as you Kurra. I’m also living in Sydney, and about to make the metaphoric trans-Tasman crossing to invest in NZ Real Estate. I have two Oz IPs, but I’m still pretty new in the Investing game.
This is my first post on PropertyInvesting.com, but I’ve been watching the posts for a while!
I’m heading to Dunedin in a few weeks (for a conference) but using this excuse to check out some IPs on the South Island (probably from Dunedin up to Christchurch).
I have found unlimitted info on the net – just google search for key words like “Property”, “Investing”, “Real Estate” and some areas like Dunedin, Christchurch, Invercargill, etc. Then follow the links. Bookmark anything that looks good and you can always go back. (Use http://www.google.co.nz – the NZ version).
I’ve found a few very interesting links from realnz.co.nz (including market stats etc). I think the real test will be arriving in NZ and actually talking to real estates and looking at some properties…
I’d be interested in hearing how properties in the areas around Dunedin are performing, and the state of the rental markets there (from other peoples experiences).
Westan, do you have any experience in Dunedin, as well as Invercargill?
Also interested in some recommended NZ solicitors, accountants and real estate agents. (I’ve already download Steve’s addressbook, and listened to Steve’s Kiwi Property Insight CD – thoroughly recommended)
I look forward to more posts, and some fun, investing in the real estate market.
Good luck Kurra, let me know if you find any websites that look good.
I went to http://www.inzproperty.co.nz/public_html/home.htm today, and apparantly you can be emailed a PDF (Adobe) file with info on NZ property investing. I haven’t received mine yet, but it might be worth checking out?
The Hound.
