Forum Replies Created
- Originally posted by Lopaczuk:
I am looking for a property management company to manage a tiny property in New Norfold, Tasmania. Does anyone have any recommendation? Have used a Hobart based company which has proven to be most unsatisfactory and am in urgent need of another one.[sunny]
I can’t make a specific recommendation, but if you want to know a few sensible questions to ask, have a look at this report:
http://www.rentingmelbourne.com.au/html/s02_article/article_view.asp?art_id=109
Michael Yardney
METROPOLE PROPERTIES
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FREE subscription http://www.metropole.com.auOriginally posted by solomon:Is there a way to find out how long properties have been on the market without having to ask for each specific property?
Regards,
SolomonThat’s a good question.
Many properties are sold within the first 2 weeks of being listed if thy are priced fairly. Otherwise they site for a while until the vendor “meets the market”and we often find bargains for clients when they property has been on the market for close to 60 or 90 days and the agent starts to get edgey as his authority runs out and he thinks he will lose out on his commision. He will often try and pressure the vendor into selling.
So how do you find out how long the property has been on the market?
Ask the agent, or ask neighbours. In Victoria look at the date on the vendors statement
Michael Yardney
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FREE subscription http://www.metropole.com.auWhat Terry says is correct. You need to access the increasing equity in your properties as they go up in value.
The problem is many begining investors go for high cash flow properties, that have little capital growth. Its very hard to save for your next deposit ‘from a few dollars a week +ve cash flow
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by Froggie:Hi,
I am the owner of a free standing Villa part of a Hotel Resort – the Villa is within the grounds of the resort
Q) Am i able to claim an Common Area Deprication – eg: pool / golf course / private road within the resort etc
thanks for any assistance.FG
The simple answer is yes you can. You will need a depreciation report from a Quantity Surveyor
Michael Yardney
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FREE subscription http://www.metropole.com.auOriginally posted by mwooding:A developer selling a block of land has told me it is common for the buyer of the back block of a subdivision to pay for the common driveway. This doesn’t seem right. Can anyone tell me if this is true?
Martin Wooding
Quadre Property GroupNo its not true!
I assume you are buying the newly subdivided block you mentioned in the other post.
You should be buying the land at the going price for the land (or less) and that’s all
Michael Yardney
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FREE subscription http://www.metropole.com.auOriginally posted by mwooding:You may have misunderstood what I said. The land is not a new estate. It is a piece of land in a well established suburb. A developer has had plans drawn up with permits and is now selling the newly create block. I am not sure if I should buy the block or find a house, like the developer did, on a large block and subdivide it myself. I would sell the front house off and keep the vacant land.
Martin Wooding
Quadre Property GroupIf you know what you are doing, it makes sense to do the same – why pay the developer’s profit.
If you don’t know what to do, then don’t take the risks involved and just buy the block
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by arnold:I am considering purchasing property in Melbourne that has scope for a possible subdivision in the future.
Two properties I have looked at, have land sizes of 580m2 and 600m2 respectively.
Are these properties too small to subdivide? If not ,then what is the minimum size which the subdivided land parcels can be?
The above suggestions are correct, but rule of thumb would suggest that neither lot is big enough.
You can’t just subdivide the lots. You have to have plans approved for what is to go on the lot.
Have a look at our website www.metropoleprojects.com.au in the investor learing centre and click on site assessment checklist.
It will give you an idea of what to look for in a site with development potential.
Or you could use our services to do a pre purchase feasibility assessment
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by wilandel:Hi Michael,
We have booked for your June workshop, and are very excited about being there!!
However, our question is:
We currently live just outside Melbourne, but we will be shifting to QLD (Hervey Bay area) in December. Will what we learn be able to be applied in QLD, or do rules & regulations relating to development differ a lot from state to state. I’m sure your answer may help others in similar situation also.
Thanks,
Will & Del [biggrin][biggrin]
Will & Del
Thanks for that[biggrin]
What you will be taught will be very relevant to Queensland and in fact all of Australia. Last year about 20% of the attendees came from Queensland.
There will be 3 presenters from Queensland. Rob Balanda a Surferes PAradise based solicitor as well as Paul Eslick and Geoff Doidge the Reno Kings.
We already have a number of other bookings from QLD and some from NSW and one attendee from last year who lives in Singapore is coming a second time. And the great thing is that interstate attendees get their airfares and accomodation paid by us.
It will be a great weekend
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by Marisa:Hi Michael,
Congratulations on your success.
I am also reluctant to step side of Perth.Enjoyed reading your comments “Is Now the Time to Develop” in API.
Cheers, MarisaMarisa
Thanks for that. I believe the article brought out a number of interesting points. One being how Perth is at a different stage of the property cycle to MElbourne and Sydney
Michael Yardney
METROPOLE PROPERTIES
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FREE subscription http://www.metropole.com.auOriginally posted by Marisa:Hi Michael,
Sorry, this is off the subject, but I have recently received information on your company and I am a little disappointed that you do not have any projects/developments in Perth.Will this be on the cards down the track?
Regards, Marisa
Perth is a great place but it is unlikley we will opertae there. We help investors from all over Australia but only buy or develop for them in Melbourne. It’s the market we know well. It has taken almost 30 years to develop that knowledge and network.
Michael Yardney
METROPOLE PROPERTIES
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FREE subscription http://www.metropole.com.auOriginally posted by figure girl:
Thank you for your warning which I will admit has dampened my enthusiasm (for a minute) but will continue to investigate none the less.Figure girl
My post was meant to dampen your enthusiasm and make you look at the project again, but I do not want to dampen your spirit.
There is no doubt that property development is potentially very lucrative. Just do your due dilligence and then do it once more, because there will be things you left out.
As I said before, you will learn 80% of your lessons on the first 2 or 3 projects, so tread gently.
To answer your initial question, I know of no book that describes the commercial development process.
I have published a 150 page Property Developer’s Manual with all our internal worksheets and checklsts, but I have chosen not to release it commercially. It is only available to attendees of our annual property development workshop
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=107
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by figure girl:Can anyone recommend a great book on Commercial Property particularly development of such.
I would love to hear how others got started and made a success of commercial development, any issues encountered, tips and hints and finance of the project.
I am at the planning stage of developing industrial units, the more I am researching the more excited I am getting.
Look forward to your replies.I have developed commercial real estate. I began doing so in the 80’s and have developed, warehouses/industrial; shops, 2 x office buildings and even one multi acre industrial estate.
I was very succesful with these but I must warn you its not a place to start.
Have a look at the post on the risks of property development them multiply these by 10 for commercial. You are playing with the “big boys here.”
Start with something smaller and residential. You will learn 80% of your lessons in the first 2 or 3 projects. Then move up.
I’m not trying to be rude or smart, but if you are looking for a book to teach you how to do it, you are in the wrong league.
It’s a great way to go broke really quickly. I didn’t but I have seen so many people both smarter than me an not as smart as me go broke in commercial development
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.auHi Michael
Because of the quality of your posts I’ve just subscribed to your newsletter, and my wife and I are checking our diaries to see if it works coming to your Brisbane seminar on the advertised date.Re the LOC I already have one with my reasonably large portfolio. However, my accountant warns me to keep a clear distinction between “Investment” and “Private” expenditure. Am I missing something here, or do I need to get a new accountant? [biggrin][biggrin][blush2][biggrin]
Cheers
GregThanks for the compliments. I hope you get value from my newsletter and if you do please pass it on to any friends who would benefit.
And I hope you can come to the Brisbane Property Briefing. If you do please come up and say hello.
Your accountant is definately correct.
You must make a distinction between business and personal spending otherwise the tax office may disallow your claims.
BUt lets assume you borrow against your properties and establish a line of credit for $100,000 solely for personal use.
You are allowed to do this, but the interest would not be tax deductible.
That’s the point I was making. It costs you say $7,000 (in interest) to have a nett $93,000 to spend for personal use as opposed to personal exersion income where you pay over 50% in tax.
Now at the end of the year you would need to find more money to pay the interest again for another year, but your properties should have gone up in value once more.
This will be clearly explained as the seminar.
Wouldn’t it be nice to get a tax deduction for the personal items also. That is live and enjoy your life on before tax dollars.
Well you can.[biggrin]
Rich people earn money, live and spend and pay tax on what’s left.
The majority of people earn money, pay tax and live on what’s left and have little left over for investment.
The first group have twice as much money to live on.
How do you do this?
You can, but I really can’t describe it here in this public forum, but it will be the subject of Dale Gatherum-Goss’s presentation at our “Real World” real estate workshop in June
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=107Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by foundation:Well I just can’t work out why Melbourne’s house prices are stagnating / falling at the same time it’s population is booming![blink]
There is one main reasaon for this.
Supply and demand – if there is too much supply for the demand, then prices won’t rise, no matter what the demand
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by wilandel:Hi Michael,
We have just been looking at your website, and WOW, we are impressed.
It is just what we were searching around here for!
Property development is definitely the way to go in this property market.We hope to make it to your seminar in June!
You really have some property “heavy weights” speaking!! [biggrin]Kind regards,
Will & Del
Thanks for that[blush2]
You are correct. There has never been a lineup of heavyweights like this in Melbourne before.
ALl presenters who are actually doing it, and have done it successfully for years.
We only do this once a year, I look forward to having you as part of the group.
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.auHi MichaelI’m very, very impressed. Do you mind being a little more specific on the mechanics of how you draw the money out each week/month (ie., the “paper trail”)? I assume your Trust, as a separate entity, is not paying you (as an employee /contractor) a “consultants /property management fee”, because you’d have to declare this as income, which the tax man would tax, right?
So how do you do it? Do you somehow invoice the Trust?
The princpals will be discussed in more detail in my upcoming Property Briefings
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=115and in great depth at the “Real World” real estate workshop
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=107The simple answer is you have a line of credit on the increased equity in your properties. Then its like having a big credit card – and you draw doen when you need it
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by techhowse:Would anyone know of any reliable Property Investment Seminars designed/suited to beginning investors?
I will be conducting my annual Property Briefings in Melbourne, Sydney, Canberra and Brisbane in April.
They are not aimed at beginners and are not get rich quick or waelth creation seminars.
They are aimed at experienced investors and the well read beginner. MOst are nearly booked out (they always do)
Check out the details at:http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=115
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by AUSPROP:Michael – even at 80% retail I suspect your properties are still quite neagtive…. are you saying you refinance your other properties to cover your annual shortfall? The stamp duty and loan application fees would be huge wouldn’t they?
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
You are right that it is difficult to positively gear a new investment property, even when we build them ourselves.
Theer is no stamp duty on mortages any more and my bank (NAB) does not usually charge me establishment fees, and even if they did, it would be irrelevant.
Imagine I went and got a real job and earned $100,000 After tax and medicare levy I would have $50,000 and even less after super.
If I have a property portfolio worth say $2million in good capital growth areas my properties go up by say $200,000 per annum (on average).
The bank will lend me against this extra equity and I borrow $100k at 7%. (I could borrow more)
This would cost me $7,000 interest and I would be left with $93,000 to live off or invest, or pay off other loans.
If I worked for the $100k and paid tax I would only have half that.
When you own enough equity; cashflow is not important.
Equity = cashflow.
Banks will lend against the equity of your properties,and you don’t need income (lo or no doc)
Having debt is not risky, not being able to have it is
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auTo answer most of the above posts. ….
I rarely sell anything.
During the peak of the boom, when we were doing a number of large developments at the same time, I had to sell some properties. But I haven’t sold anything for 3 years.
Why?
That’s one of the benefits of developing.
On comlpetion a typical development costs me 80% of its retail value. AND….
The bank lends me 80% of the properties retail value.
That means I do not have to have any equity (my money) in the project – at the end. I can withdraw it and use it for another project. But I need the 20% or 30% DURING the project to satisfy the banks.
When I said I live off the equity of my properties, I do not sell them. I refinace them each year or so, borrow more and live off that.
Debt can pay for debt.and its tax deductible (?)
One persons debt is another person’s cashflow.
These are some of the concepts I wll be explaining at my annual Property Briefings. If you want to understand some of tehse advanced concepts of proeprty you must attend. Click on this link
http://www.metropoleprojects.com.au/html/s02_article/article_view.asp?art_id=115
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auOriginally posted by MiniMogul:
[PS Developments are negatively geared while you build them, so they should be in my opinion part of a positively geared portfolio and done in proportion so they don’t propel you back to employment, if you just leftUsually you capitalise the interest during a development so they do not have to be part of a +ve geared portfolio.
I have a substantially negatively geared portfolio. I have undertaken 3 developments for myself this year and yet have added millions to my nett worth. The negative gearing really doesn’t matter as my nett assett position has grown substantially.
This means I can and have borrowed against the extra equity I have and my LVR’s stay well within my tolerance level and the abnks
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.au
