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Dear Resiwealth,
Please give us an indication of where and what you would recommend as an investment. My feeling is that in the property market things are down and will continue to drop for a while yet.
We were in France recently trying to find a property there but the agent kept telling us that the place to buy in is Estonia. It is hard enough to find a place in France let alone Estonia. Most of us are limited to where we can invest and if you can guide us to good buys in a ‘local’ sense then please do.
Have I missed the point of this thread? A few years ago property was booming and so was this forum. Now property investing is a calculated long term plod and the lively money has gone elsewhere and, presumably, they are communicating on other forums. The “vested interests”, mtge brokers, real estate agents are still here and happy to give free, unconditional advice.
I guess it follows that the quality and frequency will also wane. This does not mean that everyone will abandon property as a form of investment. There are many sound reasons for buying property and as long as that is the case a forum such as this is worth its weight in gold.I think it is very important to get some of your own money involved so I feel it is vital that you save some of your own cash before buying. Having sacrificed to accumulate some cash will help in future investments. First Home owners, Defense force funds and money from the parents make it all too easy. It is all too easy to spend other peoples money but you develop a much keener attitude when it is your own!
My only bit of encouragement is that I was eighteen when I collected my first bit of rent.
I wasn’t born rich but had a the ability to save enough of a deposit. Save money for a deposit and this activety alone will teach you the first step.Generally speaking, cash flow positive properties are not available! So called ‘constructive’ concepts are just a play on words, for example, you can put much hard work in renovation to make a property cash flow by not counting your labour.
The market is adjusting with many properties under pressure to lose value. We may soon see lower prices and evidence suggests that rents will also rise because of demand. This trend will start in smaller centres, that is , you will more likely find properties at lower prices with moderate rental demands. The problem will be to find tenants in these regions. The evolution will progress towards the larger centres. The suggestion is that CF+ properties will become more available as prices moderate and tenancy demands cause rentals to increase. Keep an eye on the regional areas and prepare for the progression as it unfolds but it will all take time.Being a restorer/renovator I am concerned about painting over wood panels. There are many ways of bringing light into a house! You may actually be affecting the value of your house by painting these panels. Consider it very carefully.
A lot of good info provided so far! If you haven’t already found out you will discover that weatherboards are tongue and groove and you may have to cut the tongue to remove sections. Again, if you are going to patch and therefore cut out a slice along a joist you may have to fill out the joist with a batten to allow you to nail the new piece into place.
Have you got termite/white ant damage or for that matter have borers caused the damage. How old is the building? You may have to go to a retoration supplier to match the weaterboard.
I have restored many old weatherboard houses and, in many cases, it is financially very worthwhile to do the job correctly. Can you give more details?There have been a few discusions about country properties in the past. A lot of negative feeling exists regarding the value of buying in the country largely to do with future growth in small rural towns. While you have to look into the reason for the continued existance of some of these towns some have very promising prospects. I feel that country property investment holds great promise because of the appeal to retirees of lower prices,rents and a more pleasant way of life. The dangers lie in trying to apply a city mind set to rural life. Do not over capitalise! Subdividing a large block does not have the same impact in the country as it would in a popular city suburb.
The same problem exists regarding cash flow properties with yield still weak because of the general market slump and overpriced properties.
The banks generally will lend in rural towns but farms and properties out of the town are a different matter. I have never experienced any borrowing problems but I only invest the family home type of property.It is very difficult to find cash flow positive in this market. In twisting the definition by adding extra deposit you really are no further ahead. Values are high and rents are low….and it will take some time to change. Add more deposit and you run the risk of having that effort eroded by increased interest rates. Even renovating is a calculated risk because your efforts may be lost to interest rate and property devaluation. This is all unlikely to change in the near future but some people claim to find +ve in Perth and NZ. Keep looking and work hard.
Termites live in Australia, that is, everywhere except possibly Tasmania. Every piece of dead wood can be a target. If termites are found in a house a least you know they are present and can be treated. The main cure is vigilance and regular checking. I would not walk away from a house because termites were apparent. I have an IP that I bought with termites in the shower stall wall. We negotiated a very good price, repaired the bathroom and appear to have CG of about 250k over 2 years.
Jhoppers tubes may be the termite traps we regularily use. They are plastic tubes stuffed with cardboard which attracts termites. Apparently they constantly search for new food sources and find cardboard very tasty.When they show up in the tubes they are poisoned, carry this poison back to the nest and the nest is eliminated. They are available in hardware stores.I found this thread hard to find, I had to scale a long way down before i could find it. I read your message and will do some of my own research before I can post a reply.
You may not get many replies because It appears that your message has been wiped!
Orange is a nice place! I think it has been discovered as far as real estate is concerned. Orange is no longer a small town but more a regional centre. Some nice spots, villages, etc outside of town that may offer better buys as PPOR but don’t expect to find a lot of cash flow positive IPs in Orange. Good luck!
Amen Giddo, many builder & pest report contractors
are not worth the money. You pay a lot of money for pages of disclaimers. They are somtimes essential to secure a loan, however.With home buying for many being a rare event these operators can get away with the crap they churn out. Good pest operators or building inspectors are priceless.
Looked at a house a few years ago that appeared a bit rough but had new ceiling. Agent could not explain why this older house had brand new immaculate ceilings throughout the house. Suggested it was just maintenance. Turned out it was a “plantation”. The roof space was filled with plastic tubs, flouro lights and a sprinkler system. Look in the windows or even a rental inspection and you would not detect the Grass growing above the ceiling. I suppose it wouldn’t hold together forever and perhaps the ceiling collapsed.
So, purple kiss, it may be as byronet suggests!Sounds like g7 has the right advise…..at least it appears he does not harbour a vested interest.
There are a lot of top houses in Bathurst! In fact it is a real boom area with good eateries and shows. The University is a good size and you may still be able to convert somthing to student accomodation. Some of those bigger houses may be worth converting. 4 to 5 students paying a good rent could make for positive cash flow.
A 12 week vacancy allowance is a sensible thing to do and I have always used it as a guide. I also try to be generous in determining expenses.
Why not? It is my money that I don’t want to lose!
These factors have contributed to my selling off most of my IPs because they no longer work out as ‘safe’ propositions anymore. I am not a gambler or a loser.Dear Dave,
I hope you do your research on your small town and decide for yourself about this investment.
The Baby Boomers have had a huge impact on property investment over the past 40 years and have been a key part, worldwide, in every property boom. They are about to retire and with them retires their huge influence on the property market. They will drive one more “Boom” and that is a search to downsize and cash up to fund their retirement. If you have not already bought a coastal property than you will almost have to pay city prices.
For a person about to retire with the average $90,000 super, a house valued at $350K, a mortgage at $125k., your small town housing figures may be very appealing. You are cashed-up, free of debt, living in a small country town and those retirement villages will come 20years later.I suppose, Mono, that there are some very remote ‘small towns’ that lack these services. On the other hand, there are many, many more that have a complete range of services designed to take care of all the problems you outline. Remarkably, the police are extremely mobile and if you are speeding it is always wise to be aware of that fact. Medical systems certainly work in a very effective way. The school system is excellent with student ratio numbers a fraction of that in the big cities and towns. There is an incredible number of affordable private schools. That infrastructure is lacking in the country is wrong. Generally it is very good.
Your right tho Mono, you have to do some thorough checking but small towns are usually more transparent than bigger centres and the answers are easier to find. All in all, a good thing.
Don’t tell me that BBs are not going to retire to the country as a matter of choice and finance. I can see it right in front of me! I have sold properties to these BBs who plan to cash up and move. We have a retired couple who rent one of my IPs because it is more economically sound. They cashed up and moved to a country rental! We don’t live in a Bowral either but a real country town making it’s living off the land.
Seems to be a lot of sarcasm and very little constructive advice on the go. Smaller towns seem to suit some people and not others. There is money to be made in small towns and, at the moment they offer better oportunities than urban areas. As far as your town is concerned, Dave, you have to examine the pros and cons carefully. There isn’t a ‘rule’ to apply to all towns because they are all different. The infrastructure of small towns go beyond the boundries and you have to look at the possibility that employment is found in surrounding areas or towns, that schools are also available not just in town but nearby and of course, medical services do operate differently in rural areas and can, in fact, be more effective than those in cities. We have all heard horror stories of people in ambulances being transported from city hospital to city hospital waiting for a bed.
The point is that you have a positive cash flow situation and using good sensible criteria you can determine the value of this as an investment.
A quick look at a town is not enough, you have to look a bit beyond the boundries to effectively analize it’s potential.Keep in mind that the retiring Baby Boomers will consider small towns and rural properties as candidates for life style retirement. Selling off a city property and buying a cheaper place in the country is exactly what many retirees will do. This suggests a steady future for these types of investments.
We have a tenant couple in an IP who prefer to rent in the country in retirement so they can invest and afford to do the things they prefer to do. We may see a lot more of this.
