Forum Replies Created
Thanks for thinking of us.
Metropole Property Mangement http://www.rentingmelbourne.com.au does cover a large part of Melbourne.
Pam tries really hard to ensure her team provides first class service and so has had to put some limits on the area that they cover. They still look after properties in most south east suburbs and inner northern and inner western.
Sorry she couldn’t help. I’m glad she gave you a name you can trsut at Point Cook.
The only company I know that would cover both regions is the newly formed RUN http://www.run.com.au but I wouldn’t recommend them as yet.
They bought a number of rent rolls and are trying to cover all of Melbpurne from a central office but I am hearing lots of complaints about impersonal (call centre) service.
You may just have to find 2 PM’s rather than one, even though I agree with your concept of trying to find one that helps.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auBilly you can’t just build.
To build multiple dwellings on one site you need a town planning permit (DA in other states)This has become a complicated and reasonably expensive process. For details check this link:-
http://www.metropoleprojects.com.au/files/PQ9BWYG8RK/development%20approval%20process.pdf
You will find other details about property development in general on the same site http://www.metropoleprojects.com.au
So the first step is not a builder, but you need to see an architect to design the new dwelling and get him or a town planner to submit it to council.
You will find some useful contacts on this forum. Alistair Perry is a proficient town planner.
Maybe you should do some sums first – conduct a feasibility to ensure the project will be viable
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auWhat can go wrong?
Great question, so let me give you a list
Firstly may I say I know where you are coming from. With little upside in the general property markets for the foreseeable future, I see many investors looking at property development as a possible way of increasing their profits.
Property development has recently been made popular by a number of seminars or workshops which suggest property development is lucrative and easy.
I have been involved in property development for over 20 years and I would agree that it is potentially very lucrative but I know it is far from easy. Over the years I have seen many inexperienced property developers and quite a few that I thought were smarter than me go broke.
So what are the types of risks involved in property development?
Some of the significant risks I have come across include:-
• A downturn in the property market leading to lower property values or increased holding costs until the development properties are sold
• Increases in interest rates resulting in increased holding expenses;
• Increases in construction costs during the project. This was particularly obvious during the recent boom. Many inexperienced developers think they have entered into a fixed price contract yet are hit with cost variations;
• Changes in the supply and demand ratio for real estate market such as we are currently seeing in the inner city apartment market which depresses property values;
• Unexpected disputes with building or trade contractors or unions which can cause costly delays to a project;
• Changes to the laws relating to property development such as the laws relating to zoning and town planning restrictions on land use, environmental controls, landlord and tenancy controls, user restrictions, stamp duty, land tax, income taxation and capital gains tax. Changes to any of these could adversely affect the profitability and viability of your real estate development projet;
• Unexpected delays and increased holding costs may be encountered when town planning (DA) approval is required for a development. Councils are currently very slow in assessing development applications and they reject many development / town planning applications. Not obtaining an approval or obtaining one on unfavourable terms is a growing risk for developers. The cost of obtaining approval or fighting council’s rejection in a court of appeal is continually rising;
• Some inexperienced developers find that some of the improvements they have made to their properties do not result in an increase in value. They learn the hard way that increases in value do not necessarily occur in line with expenditure on improvements;As you can see many of these risks are outside the control of the developer.
I know, because at Metropole http://www.metropoleprojects.com.au we act as property developers for our own projects and as project managers for many clients (we are currently involved in over 90 development projects around Melbourne.)
We are aware of the risks involved in a development project and this helps us minimise them so that our clients do not get any unpleasant surprises.
Most of our projects are successful, but I have to be honest and admit that we also into the above problems in some of our projects and they are not as successful as we initially hoped.
We must learn from all our developments. Learn what went wrong and minimise the risks of this occurring again and learn from what went right and repeat this if possible.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.propertyupdate.com.auOriginally posted by mgs2:I was recently reading a book called Secrets of Property Millionaires Exposed, and there is one section on Patrick Bright, some of you may have read his books. Anyway I didn’t know much specifically on Bright but apparently he runs a buyer’s agents company, which I certainly didn’t know existed. He doesn’t go into much specifics about buyer’s agents though. Has anyone had any experience with them? Think they’re worthwhile, what are the fees like?
I know Patrick and he’s a nice guy and knows his stuff.
I won’t say too much about Buyer’s agents because I’m biased – Metropole’s Buying Melbourne is part of my group of companies.
You can find out more about them at my interview on this site: http://www.propertyupdate.com.au/articles/12/1/Agent-on-your-side—how-buyer%26%2339%3Bs-agents-work
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.propertyupdate.com.auSignificant portfolio of commercial, industrial and residential properties.
LVR of 60%
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auI agree with the others that Rolf is good, but remember that you don’t have to be Brisbane based, many brokers are able to help you across state boundaries.
Why don’t you give our own Simon Macks a call – [email protected]
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auOriginally posted by Dr.X:Thanks for this info Michael, it’s very helpful!
what I would like to know is that if you pay the $5000 or so to become a founding member of PIAA and also the $2500 to do their accreditation program, would you then become a qualified property advisor and get ASIC off your back!
Seems to me that experience in the real world does not count for much but doing these BS courses does!!!
I just dont understand that how consumers will be protected by taking advice from someone who is “accredited” by the PIAA. I think the real problem is some consumers really need to be protected from themselves no matter how many courses their advisor has done!!!!
Just my thoughts XXXX[biggrin]
We buy properties in Adelaide. No Agent Fees.
[email protected]
phone 0412 437 582AT present the PIAA and the course mean nothing.
The government hasn’t come down with its decision on handling the property industry yet.
It may decide that property is caught under the Financial Services Reform Act and then we will need to get a financial planners licence.
That will make it interesting, becuase we all know how much planners know about property.
If the govt decides on self regulation, then the PIAA and its eductaion may be accpeted.
Its too early but I will keep you posted.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auOriginally posted by fernfurn:Michael, I realise the counter-cyclical buy theory but would like your advice on selling in a down market. I am wanting to sell a new townhouse in a really good suburb in Mar but could hold onto it for another year at a pinch. Do you believe the market in Melb will drop further, or hold steady and patchy for a few years.
Fern
Fern
If you recognise the “countercyclical buy theory” do you realise that most of the investors who did well out of the last boom did so because they bought early in the property cycle and got set before the boom.
Many of those who bought near the top of the boom are quetsioning their invetsment decisions.
The exact opposite of buying well when the market is in a slump, is selling a good property in this market and regretting the decison a few years later, because it is likley the person who ownes the property will make lots of money out of it as it doubles in value in the next 7 to 10 years.
What will happen in the next 12 months?
The market is very patchy. It is segmented and not all proeprties will fair well.
Where is your property?
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auGSJ
You are correct that a short course alone is insufficient to “qualify” anyone to give investment advice.I don’t think that was the intention.
It is one small step in regulating the industry. Others such as ongoing education, compliance and monitoring will be required.
There will always be people who will get around the regulations.
I am not smart enough to know the answers. I just like the fact that things are moving in the right direction.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auOriginally posted by toe:Michael I’m afraid I don’t agree that statistics lie. They can either be massaged by statisticians, or the people interpreting them can missunderstand the bounds of their use.
……..
Craig Sillitoe
Craig
I agree with much of what you say. At Metropole we have a researcher looking at and interpreting data all day.
What made me say what I did was that as I was posting, I had the latest figures from the REIV in front of me. because I was doing some research for an article for A.P.I.magazine.
The figures showed some weird anomolies, for example:
Figures for Wonga Park an out eastern suburb showed a fall in median price of 48.6% for the year to September 2005. But there had been only 7 sales reported in the last quarter.
In the adjoining suburb of Warrandyte there was a reported increase in median price of 80.4% for the year to September 2005. Again there were only 7 sales reported in the last quarter.
I agree that Residex’s method of reporting price movments sounds more statistically accurate and we subcribe to their data as well as many other sources.
My surprise is that Residex is now in partnership with the REIV and “managing” their data research.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auIf you are looking for capital growth, then there are probably better locations for you to investigate.
Growth will be limited becuase of the old supply/demand equation, including:
1. The availability of new estates in the vicinity.
2. The demographics – basically young first home owners. This group is limited in its borrowing capacity and in fact many have overcommitted and could only afford to buy in the area because of the first home owners grant.
Many are currently struggling to keep their homes esp with rising petrol prices, the gas guzzling cars they tend to buy and the distances they have to travel
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auOriginally posted by mt87:wow, thanks a lot for your responses guys.
MichaelYardney: do you mean then to purchase in areas that have already experienced growth, or purchase in areas that are yet to grow? (i understand it to mean the former). is there any chance i could look at the list that has the best suburb growth over the last 10 years?If you are lookingt o buy capital growth properties, and that is what I advocate, then firstly select the right suburbs in which to invest.
Look for properties will long histories of stong capital growth – not just the latest “fad.”
Then in those suburbs choose the right type of property.
When doing your research on these suburbs, check out where it is in its own property cycle. IF it is peaking then maybe you should put off your buying decision.
You will do better by timing your investment purchases well and buying counter cyclically.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auThank you Steve for providing the forum and for undertaking the update.
I think it looks pretty slick. Much clearer and easy to use.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.propertyupdate.com.auOriginally posted by toe:MichaelYardney i like your general premise that some suburbs are doing well in a down market. my question would be whats the best way to determine which suburbs will do well from now, should we assume that the ones that are up 20% will continue at a similr rate?
how else would one chose the right area in a choppy market? i’ve heard talk of sticking with ‘quality’ through tough times, but i’m yet to hear a definitive definition of what quality is and i’d love to see some data to back up the theory.
Craig Sillitoe
I am sure you know how statistics lie.
They say that a certain suburb’s median price has gone up 20%, but that doesn’t mean all proeprties in that suburb have gone up 20%.’
So you need to choose the right property in that suburb.
Some suburbs will always outperform the average, and some streets will always be more popular than others and some properties in those streets will always attract more buyers – pushing up prices.
I believe it will be the more affluent suburbs that will outperform the general property market next year
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.propertyupdate.com.auWhile the general Melbourne market is flat there are some suburbs that are performing strongly.
I have the latest REIV figures in front of me- some suburbs have grown over 20% in the last 12 months.
So choose the right property in the correct area and buy below market price.
It would be great if you add value through renovation but why would you sell it if you went to all the hard work of finding the right property and doing it up. If it is the right property it will keep going up in value.
Why should someone else get the benefit.
You could always refinance it. That’s one of the great things about property – you don’t have to sell it to take your profits out.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.propertyupdate.com.auWelcome to the forum gurkan.
Unfortunately builders have a bad reputation and so finding one on recommendation is a good idea, but that is really right at the end of the development stage.
To buy a potential development site requires lots of work before you go to a builder. In general builders won’t be able to assist you with the town planning process
I have outlined the stages of the development process at the following link;
http://www.metropoleprojects.com.au/files/RPZBI8BSQR/the%20development%20process.pdf
Hopefully this will give you a better idea of what is ahead.
Also have a look at some old posts on this forum. You have an exciting time ahead of you, but full of potential traps.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auIt is normal for an agent to charge a lease renewal fee. After all they are doing work and documenting things for you..
Having said that how much should they charge and what is fair?
I know we ( http://www.rentingmelbourne.com.au )charge $100 as a fixed fee. I know other agents charge more and some less.
It is of course in your interest to have the lease renewed.
While fees are important, its more important to get a high level of service – make sure you get it.
And remember…everything is negotiable.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auOriginally posted by mt87:hey guys, im new to this forum. Just wondering if anybody (in Melbourne) knows of any suburbs that are likely to experience solid growth? I’ve been keeping an eye on Box Hill, Ashwood and Burwood as they are in and around already established areas, are close to the city, shops, transport etc. but are yet really boom. I was generally looking for houses in the $200k (or lower) mark. Any advice would be much appreciated! Thanks heaps
The best way to find areas likley to experience solid growth is to look at the past growth history of a suburb.
I particularly like Ashwood that you mention. It has always performed well. It came 24th out of all suburbs and regions in Victoria in growth over the last 10 years.
It is now going through transition as the old properties are past their “use by date” and many are being pulled down and new townhouses are taking their place.
We have bought 14 properties for clients in Ashwood over the last 2 years and we will be contributing to that growth.
The problem is you can’t get anything for $200K in any of the areas you mentioned.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.propertyupdate.com.auOriginally posted by fernfurn:It sounds possible to me. My drafting guy (very experienced with the Council I deal with) told me that once approval to build has been issued, subdivision is issued as a matter of course. Speak to a surveyor too. I have built a new townhouse behind an old house and it all went as above. I wouldnt be telling the prospective house purchasers that you will be building as the construction noise, trucks etc. might put some people off
Fern
A development apprioval or building approval does not mean you will get a subdivision “as a matter of course.”
Sopme councils require an assurance of what will be built on the remianer of the proeprty and that it will be built. You may need expensive agreements with the council and bonds or sureties.
But the answer is you should be able to subdivide and then build.
You may find after subdividing off the houses you will get reasoable values for the houses without the big back yard and you may be able to refinance these to provide development funds.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auService stations can make great investments.
As long as the tenant is on a long lease and it is a decent size service station. The oil companies have been rationalizing their busimesses and care losing down the smaller ones.
Also check who’s repsonsibility it is to do remediation work on the site if the tenant leaves. All petrol stations have some leakage into the surrounding soil from the underground tanks and this can costs a fortune to fix before council will allow you another use on the site (for future development)
Remember commercial leases are very different to residential ones, and the ruules for buying commercial property are also different
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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