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Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
April 1, 2014 - 8:37 am
+1 Catalyst
Because your interest in the property is a direct result of the agents advertising the agent is entitled to their commission, even if you wait until after the agency agreement expires (eg. Sign comes down) to approach the vendor.
Depending on how long the property has been on the market the agent may be your best friend… Eg. If they are sick of having it on their books in an attempt to get it sold, they may talk the vendor down in order to get your low ball offer accepted and themselves paid.
Matt_Arnold
Participant
@matt_arnold
Join Date: 2006
Post Count: 142
April 1, 2014 - 8:35 am
+1 Catalyst
Because your interest in the property is a direct result of the agents advertising the agent is entitled to their commission, even if you wait until after the agency agreement expires (eg. Sign comes down) to approach the vendor.
Depending on how long the property has been on the market the agent may be your best friend… Eg. If they are sick of having it on their books in an attempt to get it sold, they may talk the vendor down in order to get your low ball offer accepted and themselves paid.
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 10, 2014 - 10:48 pm
Hi Sam
I'd would be asking your PM if you need a certificate of currency before you can pass water charges onto the tenant.
In NSW (i don't know QLD legislation, thus why i say ask your PM) as long as it is marked on the in-going condition report that water saving devices are fitted, and the tenant accepts this when returning the in-going condition report, a certificate is not required…
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 5, 2014 - 9:32 am
+1
Hang around for a while James… you’ll very quickly learn how to play the game.
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 3, 2014 - 5:29 am
Ps. If your current agent hasn't at least advertised the property and starting running open homes / processing applications (having had an agency agreement in place for over 10 days with the property being vacant) i want to know why the hell not !
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 3, 2014 - 5:24 am
Hi Lily
Best approach i think is always the honest one – talk to the agent, explain the situation and go from there.
Wether or not they hold you to the termination fee i would think is largely dependent on how much / if any work they have done on your property…
Eg. Have they already completed the in-going condition report
Have they already paid to advertise it on realestate.com, Domain etc
Have they already completed open homes and started processing applications.
In regards to self-managing, id be very cautious… i know it sounds like the cheap / easy option but it's only going to take a few very minor things to go wrong because of your inexperience & / or lack of knowledge and the money that you would have paid a managing agent will seem minimal…
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 3, 2014 - 5:17 am
Hi Linda
When it comes to townhouses / units that are strata titled, you need to keep in mind that the levies you pay per quarter go towards the general maintenance and upkeep of your property.
Eg. If the gutters start leaking on a strata tiled townhouse, the body corporate pays to have the repairs completed. Conversely, if the gutters started leaking on a free standing torrens title house, then you as the owner would be putting your hand in your pocket to pay for the repairs.
The way i see it (its a pretty simple way of seeing things) is with townhouses / units, i pay in advance each quarter for maintenance as opposed to a lump sum at the time of repair…
In regards to are townhouses a good investment, it all comes down to the numbers…
Pro's – Generally easy to maintain (body corporate takes care of gardens, most building issues etc)
– In the right area, they do rent well. (A lot of young professional couples etc don't want to have to maintain a big back yard, just want somewhere to sleep that is close to work / major amenities)
Cons – You don't have full control over your investment (Eg. Bi-Laws / Exec Committees will dictate what / if any modifications you can make to the building – think Patios or Parking Areas)
– A poorly run body corporate can spend a lot of money on things that just aren't necessary (Eg. Having a electrician attend site to replace a $2 light bulb over the main entrance, total cost including call out $100). A well run or active executive will often have an owner who is a little bit handy / happy to change the odd light bulb etc saving a heap of money over time.
If you do go down the strata pathway, make sure you order a strata report.
How much money they have in the bank and how many / if any mid year exec meetings were held and what was discussed will reveal a lot !
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
February 1, 2014 - 9:16 am
Hi Fay
I think this is really only a question you can answer…
From a purely financial perspective, you’ll do better over the long term renting where you want to live and buying investment properties on the side.
Having said that, from an emotional perspective, there is a great sense of security and comfort being in a place that you own… eg. You don’t have to worry about leases expiring and those pink walls that you don’t like, you can paint them green
I guess my only advice at this stage, if I can offer it, is if you take the PPOR route, just make sure that you don’t mortgage yourself to the hilt trying to afford your ‘dream home’. It’s a really quick way to ensure you can’t sleep at night.
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 31, 2014 - 3:05 am
Hi Jad
In NSW, a tenant can break the lease if a AVO has been issued against a current occupant of the property…
http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owners/Renting_a_home/During_a_tenancy/Domestic_violence_in_a_rented_property.page
Not sure how / if this would extend the neighbor in question ??
If it went to the tribunal, it would be interesting to hear the outcome… unfortunately, considering the circumstances (2 mid 20's females), i wouldn't be surprised if the member ruled in the tenants favor.
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 31, 2014 - 12:56 am
Hi Muddle
This software will very quickly (with some reasonable accuracy) tell you wether a property will be CF + or CF –
http://www.somersoft.com.au/piafpu.htm
You can also play with the figures – Eg. What is the cash flow difference between a purchase price of $300K vs a cash flow price of $320K
Having said that, as mentioned above, there really isn't a direct correlation between rental returns and purchase price for residential property the way there is in commercial…
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 30, 2014 - 1:22 am
Hi Tracy
Maybe I’ll see you at an open at some stage
I’m currently watching Wyoming as my main focus…
If / when you would like some advice on different areas from a rental perspective you should talk to Ellen (www.therentingexperts.com.au).
Her company has taken care of my property for a couple years now and have been great to work with.
Matt
Ps. Jamie is bang on with his advice above. A good broker is invaluable.
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 30, 2014 - 12:41 am
Hi Tracy
Well done on achieving such a strong financial situation through savings.
My personal preference for property is the classic ‘3 bedroom, brick and tile’ property that is generally pitched at the first home buyer market.
Where I am based on the Central Coast, these are generally priced around the low to mid 300’s.
My reason for this type if property is that they generally rent quickly, the returns are quite good and should / when i choose to sell, this type of property will always be in demand. I also find the value is much more stable than in some of the high end properties…
I’m sure you will get a whole bunch of different responses to your question.
My advice at this stage to you, if I may offer it, is to take your time formulating your approach. In the same way that it has taken time to achieve your current financial situation, allow the journey to investment wealth to take some time. Hopefully this approach will allow you to enjoy the journey and avoid a whole bunch of sleepless nights
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 29, 2014 - 4:01 am
Hi Patterson
I am a big fan / user of Excel… but to achieve the above, why not just spend $245 on software that is updated regularly and does all of the calculations that you're looking to achieve with your spreadsheet (plus a heap more)'
http://www.somersoft.com.au/piafpu.htm
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 18, 2014 - 8:18 pm
Hi Boro
From the information you've provided, your in a great position to get started…
To answer a few of your questions;
As Benny has said, you need to decide on your method… Buy and hold, renovate, development etc. from your comment above, buy and hold or very basic Reno (paint and carpets) will probably suit you the best based on your time available.
in regards to seminars, I went to quite a few when I got started. Although they all provided 'some' useful information, the thing that frustrated me was there was never enough to really do anything with. The just scooted over the topic and at the end said for the in-depth explanation you'll need to attend our paid seminar. (But hey, those guys are looking to make an income and the seminars are really just their platform to present their product)
In regards to buyers agents, I think it depends on how much time you are willing to put into your own research and what areas you are looking to purchase in. I enjoy / have the time available to attend a couple opens each week in my chosen area (even when I'm not in a position to purchase I keep a very active eye on the market) so I am very confident in my area. Having said that, if I was to look in another state I would use a buyers agent. For the simple reason, I fail to see how you can truly understand a location (what is the good streets, what is the market doing) etc by jumping on a plane and attending half a dozen inspections organised by a selling agent.
My advice at this stage if I may offer it is to decide where you want to end up and structure things accordingly / build the required team around you from early on.
As an accountant, I sure you understand the need for structures and estate planning, so I won't comment too much there. There are several very good brokers on here (one has already commented) so a phone call with them will probably answer a bunch of questions for you. Being that you are based in Sydney, I will recommend Terryw as a point of contact. I met with Terry last week in person to look at my situation…
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 17, 2014 - 3:44 am
Hi Mate
The Newbie Investor wrote:
Than people that pay off a whole property of say $300,000 than after 25 years its worth 350,000 basically you wouldn't of made much in return???? So its better to hold and sell at perfect times???
Have you ever tried to pick the bottom and top of the share market ?
Property is similar in a lot of ways, albeit slower moving…   it is generally near impossible to get it right 100% of the time.   So although you can try this strategy, there are other options available.
For example, each time you buy / sell a property you have to pay Capital Gains Tax (if an investment property), Stamp Duty and Legal Fees….   so instead of selling the property once it has gone up in value, you can withdraw some of the equity via a second loan and use that as a deposit for property number 2.   (then a few years later, withdraw some more equity for property number 3 etc). If you want to 'create equity' as opposed to waiting for it, then a basic reno (kitchen / bathroom etc) can work wonders….
In regards to interest only loans / offset accounts, have a read of this thread – it has both the pro's and con's of this type of set-up (scroll down to the last 4 or 5 comments)
https://www.propertyinvesting.com/forums/help-needed/4349510
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 17, 2014 - 2:26 am
You got it mate
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 17, 2014 - 1:38 am
Doing well mate… yes, your correct.
Basic example;
Property Purchase Price = $300K
Consists of a) 60K deposit & b) 240K loan
Property Sale Price = $320K
Consists of a) Return of $60K deposit b) Payment of $240K loan & c) Profit of 20K
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 17, 2014 - 12:23 am
Hi Matt
Bang on mate…
If your goal is to pay off the loan as quickly as possible, (to keep things very simple) then there is really only three ways to go about it;
1) Borrow less to begin with (bigger deposit)
2) Make lump sum payments
3) Make extra weekly / monthly repayments.
Please note, option 3 is better than option 2 (If you pay $100 per month in extra payments, you will be saving yourself more in interest then if you were to just pay $1200 in a lump sum every 12 months).

Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 17, 2014 - 12:05 am
Hi Newbie
With a Principle & Interest Loan (P&I) where you pay the principle off over 30 years, the repayments are the same each week / month etc for the full 30 years.
So, although you will pay the maximum amount of interest in the first month, and then gradually less interest each month there after as the principal reduces, (and conversely, the least principal in the first month and then gradually more there after) the loan repayments remain the same for the full 30 year period of the loan.
If you were to pay 100K off the loan in a lump sum transaction, the repayments would still remain the same unless you were to approach your bank / broker and them them re-negotiate the payment terms of the loan.
Does that answer your question ?
Matt
Matt_Arnold
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@matt_arnold
Join Date: 2006
Post Count: 142
January 16, 2014 - 11:40 pm
Hi Newbie
All good
1) Yes, if you purchase a 300K property, and put down a $60K deposit, then you will have 20% equity. FYI the formula used to calculate equity is;
(Loan Amount divided by property value) x 100 = Equity %
2) The total interest payable is calculated on the loan amount only. So, if the loan balance is 240K, you will pay interest on 240K. If you then pay 100K lump sum off the loan and the new balance is 140K, then you will only pay interest on 140K.
3) When you sell the property, and pay out the loan all future payments will be nullified. Eg. If the loan balance is $0, then no further payments or interest is applicable.
Matt