Forum Replies Created
- Originally posted by hb:
hi michael
just reading your post again
“you’ve bought 4 properties in the last 6 months in melbourne“
gutsy stuff
Did you do you figures?where you expecting the market to pick up quickly?
i only ask because that probably wouldn’t have been my strategy…..
why?
well 4 properties at melb median price (360k) = 1.44m
10% down..minus buying costs 107k, minus water and council rate 7k then add 62k rent, makes a 1st year loss of $152k…
no equity gain as property has gone backwards 2.7%…but lets call it zero…
no real gain heredo you know what you missed?
remember the newspapers having been telling us for the last 12 months….”china thirstly for australian minerals”…and “property stagnant”
now i’m no brain surgeon, but if you go with the flow…
you could have made 2.17m on your 1.4m paid the bank back, and pocketed 763K…..all in 12 months…with BHP shares…then you’d be ready when the property market starts that next boom
so instead of only 140k deposit, you’d have (763-CGT) 575K to invest in IPs
Now we talkingMy properties cost considerably more than what you suggested, they were above the median price”. But I did not put my “hand in my pocket” for money for any of them.
I would suggest all have gone up in value.
They were all old houses on land with development potential.
One was with permits, (DA) and construction is half completed already. Will be finsihed in 3 months – I am keeping both townhouses with a notional profit of $150-$180K
Another one now has DA so increased in value about $100K. Will start building in 4 weeks – and sell these.
The other 2 adjoining blocks will give me a 5 townhouse site, but currently having hassles with the neighbours and I can see us ending up in VCAT.
So I have done well by adding value but I accept that property values in general are not rising.
In April I will be holding my Annual Property Briefings in most states, I wil go through exactly what I did and how, to show others what is possible (of course there are also lots of other ways to make money out of property )
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auBrunswick should perform better than Coburg which still has some “stigma” attached to it.
Of course not all properties in thos esuburbs will do well, but I know from our property management department that apartments in Brunswick rent well and rents are increasing
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auOriginally posted by Sweet:Yeh cheers ill look it up
I heard Frankston is going to be the big winner in 2006? What do u think?
You would be better off buying an apartment in St Kida than a house in Frankston.
Frankston has had its run and their is little to push property values up in the near future. The Marina and the new freeway have already been factored into Frankston prices, with some significant hikes a few years ago.
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auOriginally posted by hb:the 64million dollar question???????
ask any guru and you get completely different answers….
MichaelYardney says….
Our research shows that markets have bottomed in Sydney, Melbourne and Brisbane (this doesn’t mean we in the next boom yet!)I am actively buying for myself – have for 6 months- and very strongly for clients.
and according to Bernard Salt , trendspotter for KPMG
“a modest upturn will kick off in late 2007,or perhaps 2008”
and “There’ll be another weak boom in 2018-2020”
and after that “all the baby boomers will be dead and then the property market will hit the wall”weak boom 2018-2020……what???????
i’ll be dead by theni’m sticking with micheal…….
hope your right?????I have a lot of respect for Bernard Salt as an economist. You probably now, but he is the one who came up with the term “sea change and told everyone to buy coastal properties.
He is the one who said buy in Manura and prices skyrocketed.
He was interviewed in the pares last week….
Guess how many proeprties he owns???
NONE!!!!
Interesting isn’t it – he’s an economist and says he will buy one property in the next 3 years and in interestingly it will be in Melbourne.
By the time he buys his one property, the 4 I bought i the last 6 months will have gone up in value?
How much? I’ll tell you in 3 years time.[biggrin]
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auIf you are buying your investment for long term return, there is no evidence that an apartment in a block of 10 would recieve a lower rental or worse capital growth than in a block of 4.
Sure there is some “exclusivity” in a small block of apartments, and large blocks would put off some buyers and tenants.
What is the cut off mark ? 4 or 6 or 8 or 10??
I would avoid large blocks, but 6 or 8 in a block is fine, if everything else stacks up.
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auSpeak to the council town planning officer to see if the council allows you to subdivide the land and what conditions, if any, they would place on this.
Speak witha surveyor. You will need one to produce a new plan of subdivision and lodge it with council. he should give you an idea of how long the process should take.
You can definatley begin the process during the settlement period, but it is likley to take a few months.
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auDo you have your plans and permits yet?
If you do, I know a builder based in the western suburbs who does a great job. He has done a number of projects for us and just finished a 3 unit project for a client of ours in Japan, so Sydney is easy.
Send me a private message or an email [email protected] and I will give you his detailsMichael Yardney
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FREE subscription http://www.PropertyUpdate.com.auOriginally posted by Property Passion:what are the stap duty implications with using the nomanie clause when buying a property ?
“It’s not how much money you make, It’s how you spend it that matters.”
Aspiring property developer
Giulio Taranto
If the trust has not been set up (or you did not have the intention to set it up) prior to the purchase, there is a deemed on-sale of the property from the initial purchaser to the trust (or actually the trustee) This incurrs stamp duty so you end up paying double stamp duty.
A trustee company and a trust can be constituted in 24 hrs, so see your solicitor or accountant first and get your structures correct before the auction.
Otherwise it could be very costly.
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auHi Psychiatrist
It’s geat that you “want to learn” this a great foru to learn from.
May I suggest one of the things I have learned from successful proeprty investors:
Don’t expect to do everything yourself.
Sure you may savea few (tax deductible) dollars a week managing your own property, but I would strongly recommend you get a proficient property manager to look after your properties.
Find the right PM and they will add value, not cost you.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.PropertyUpdate.com.auYou can purchase this data form Residex http://www.residex.com.au or RP Data http://www.rpdata.com.au
http://www.domain.com.au give recent sale prices for some houses
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auInterestingly I met a developer today, in his 60’s and been doing it for 30 years.
Has renovated about 30 block of flats over the years. Sold all of them, never kept one.
Always wanted the “cash” to do another project and to live off.
His last project was in 2004, when he lost “a bit of money”
He is finding it difficult at present to find a viable project.
Anyway he has a nice house and car but litte else to show for it and regrets his decision to sell.
If only he had kept that first project and did nothing else, for what he paid for it 30 yeras ago.
He would now have 10 apartments in a prime area.
Lesson: you earn cash trading and pay tax. You can get filthy rich as a property dveloper holding onto your projects.
Michael Yardney
METROPOLE PROPERTIES
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FREE subscription http://www.PropertyUpdate.com.auIts very difficult to make money out of renovations if you intent to sell your property, but there is lots of money to be made if you buy, renovate and refinance.
We’ve been involved in 8 of these in the last 6 months and they work ” gangbusters”.Have a look at this article:
http://www.propertyupdate.com.au/articles/35/1/Buy%2C-renovate-and-refinanceMichael Yardney
METROPOLE PROPERTIES
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FREE subscription http://www.PropertyUpdate.com.auTo give you a sensible answer, we need a little more info.
How much is the property worth and is it in a high capital growth area.
Also how much is this cash flow drain putting a strain on you?
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auCongratulations, you have done well, increasing your property’s value by 60% or so in 2 years.
That’s the power of property development.
Why sell?
If you can afford to do it and the project is feasible, proceed with the development and retain all the units (if you can) as a long term invetsor.
I understand it’s hard to do from a distance but Metropole Projects http://www.metropoleprojects.com.au could act as your project manager. We are currently involved in over 90 residential development projects helping ordinary investors like you become property developers.
The only person who would buy your property now would be a developer and the reason he would buy it is to make a profit ( and possibly a substantial one) Why shouldn’t it be you?
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auJohn
You are correct that there is an increasing supply of ingle occupants, but:
1. There is still an oversupply in Southbank with about 2,000 new unsold apartments being completed before the end of this year.2. Single occupants still like space and many are going for a 2 bedroom apartment. If you can afford one, you will get more bang for your bucks with a 2 bedroom apartment.
Having said that, there are some selected lowrise blocks of apartments in Southbank that offer good value and are always
leased.We bought 2 apartments in Southbank for clients in December in low rise blocks.
If you want to know the details of these purchases email or send me a PM
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auOriginally posted by asdf:Hi Michael, thanks for your reply. Appreciate your comments seeing you’re probably one of the very few in this forum who has seen AND been involved in a few cycles in Oz. I gather buying pre-cycle boom and buy under market value is a strategy which you employ. And something which you can add value. Easier said than donw I’m afraid in this environment. Nevertheless, thanks for your comments.
Thanks for the kind words, but I disagree that its hard to buy below market value today.
There are lots of motivated vendors.
Properties to which you can add value – it could be minor renovations even a coat of paint.
If you say you can’t find them you won’t.
If you say you can find them – you will!
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auOriginally posted by fernfurn:Michael Yarney Yes I do realise the buying cycle as well and “know thyself” I’m not a buy & hold forever person, I like the action of developing. Having said that I would be prepared to hold for 12mths, but if there is no movement in the market my costs would negate any minor gains
With the buy well cycle though if I sell now I can also buy well, value add and still catch any upward movement in prices. The suburb is Strathmore. Any thoughts on movement in this suburbFern
I feel it would be difficult to find opportunities in Melbourne where you can buy, renovate and sell for a profit in 12 months. The stamp duty will kill you.
Property is not a short term investment. A 12 month property play is speculation.
Michael Yardney
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What I was suggesting in this post was that not only is there a proeprty cycle for each major market (eg Melb, Sydney Brisbane etc) but within those markets, there are sub cycles – suburbs go through cycles
I look for suburbs in transition, those that are improving through genrification.
Of course it makes sense to buy at the bottom of the cycle and sell or refinace at the top, but this is only thoretical and not really possible.
So do you still buy in Perth and NT which are still booming?
Or do you buy in Melbouurne Sydney Brisbane etc that are in the slump stage?I will answer with some comments:-
1. I know that many investors who did well in the last property boom did so by purchasing properties early in the boom when others thopught they were “crazy”
2. I know many investors who bought in the last few years of the last property boom who regret their investment decision.
3. You can buy at any time in the cycle if you buy below market price and add value, creating your own capitla growth
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auCan I get another star too please?[biggrin]
Michael Yardney
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FREE subscription http://www.PropertyUpdate.com.auInteresting comments Nigel and it confirms my thoughts about most finacial planners.
There is no simpe answer to cleaning up the industry, there will always be bad apples.
Some who try and take advantage of others but many just don’t know what they don’t know, but give “advice in good faith”
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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