Forum Replies Created
yes true westan
I was able to turn a 20 percent return on the list price into a 29 percent on just by negotiating.
It wasn’t a piece of cake though – I’d done some hard core statistical anaylysis-type research of actual sales versus GV’s in the area which meant that I’d come up with a figure which I thought was exactly how much I *should* get the property fo,r to be a ‘fair market price’. Trouble was, it was a 30 percent discount on the asking price!!
I threw the evidence at the RE agent to back up why my offer was so low, (2K under what i wanted to pay!) got rejected, walked away from the deal, and then the vendor came back agreeing to the exact figure I’d decided was fair.
Renovations –
Even budget renos are relatively expensive (or time consuming) and so far I’ve only been able to get about a ten percent return on the renovation costs alone, BUT it does mean your property will be good to go for many a year, you can raise the rent, and it should attract a better tenantyes true westan
I was able to turn a 20 percent return on the list price into a 29 percent one just by negotiating.
It wasn’t a piece of cake though – I’d done some hard core statistical anaylysis-type research of actual sales versus GV’s in the area which meant that I’d come up with a figure which I thought was exactly how much I *should* get the property fo,r to be a ‘fair market price’. Trouble was, it was a 30 percent discount on the asking price!!
I threw the evidence at the RE agent to back up why my offer was so low, (2K under what i wanted to pay!) got rejected, walked away from the deal, and then the vendor came back agreeing to the exact figure I’d decided was fair.
Renovations –
Even budget renos are relatively expensive (or time consuming) and so far I’ve only been able to get about a ten percent return on the renovation costs alone, BUT it does mean your property will be good to go for many a year, you can raise the rent, and it should attract a better tenant“Where is the underlying population demand into the future for those hot spots of residential property speculation in areas such as rural Victoria and Tasmania’s east coast?”
OK…anecdotal evidence here, but I know several city dwellers who are sooo not property investors, who are selling up their city properties and translating them into mansions/land in such places -melbourne people buying in Tasmania as holiday homes with view to moving there later – Sydney city people selling and buying a mansion in the Blue Mountains for the same price as a modest city pad, Auckland people moving up to the beaches/vineyards to the north.
Huge growth of the ‘lifestyle block’ as a concept….more people able to work from home, due to technology and the net….businesses farming out or outsourcing things to independent contractors…not to mention the baby boomers thinking about where they wanna retire in a few years and buying there now while it’s cheap…
I don’t think this trend of buying rural is just investor driven. You see it when you visit the little places that used to be frumpy little forgotten places and are now humming with craft shops, cappucinos, bed and breakfast, pub and wine-bar renovations…actual people are moving to these places.
just some thoughts…..
I think an overall positively geared portfolio works.
a la what richmastery teach. With a mix of different kinds of properties.got this fabulous email today from my property manager
“I have a young couple interested in (my house – the up til now unrentable one, despite fabulous renovation and having been rented no prob before in dump-like state when i bought it). They had a look some time ago but didn’t like the area. I convinced them to have another look as they also have a beloved dog and other places they were interested in would not allow dogs. I told them the rent would be $XYZ per week as we discussed last time we talked. I feel they would be good long term tenants. He is a farm worker and they have a little baby daughter.
They have asked if they could refence the property in return for the 2 weeks initial rent in advance. How do you feel about this?
They are getting back to me this afternoon. I think we should try to secure them as tenants a soon as possible.
Look forward to hearing from you.”
I was soooo happy and said yes! What more can you ask for but tenants that want to improve my property? I could certainly not re-fence the property (it’s 1600 metres!!) for the amount of 2 weeks rent. And it will make it more rentable in the future if they ever move out. I hope it works out. I have a good feeling. It makes me feel better about having persisted with this property.
(or was that just stubborness?? hehe)
hi there-
I think Paraparaumu and Kapiti are going to be huge, and in fact have been going up heaps lately I hear. Coastal, commuting distance from Wellington, on the trainline, cute cafes, new apts going up at Kapiti, blah blahThere are still +ve cashflow properties in the Wellington suburbs such as Naenae (there was an apartment block of 8 returning about 12-15 percent for sale there at the beginning of the year for 500K) as well as 3 bdr type houses on a decent sized section that fit the 11 sec solution in Naenae and Wainuiomata. Petone is another hot suburb, beachside, used to be run-down and semi-industrial but is very up and coming these days
cheers-
Minibrilliant reply Steve.
I was actually so mad at that little twerp for saying what he did that I stayed up until 3am last night writing this mad rebuttal which i was gonna email him as well as post here. now I don’t need to because you’ve done it so eloquently not to mention elegantly and with the higest possible ‘vibration’.
So I am glad i saved it as a draft and didn’;t send it in the heat of the moment cause now I’m just gonna delete it.
but i also agree with the fact that if you have people saying you’re dodgy it’s far harder to redress the damage, which is a severe bummer.cheers-
miniHe’s just been to town on Richmastery, too.
I wonder who he’s going to turn on next?
I’m working on the best debating-team slamming come-back of all time, which i’m not only going to email the author but post here. Watch this space.
Hi BB
my old nemesishow’s your taxi driving going??/
you know what they say about never taking investing advice from taxi drivers?>Haven’t you leant your lesson yet?
I will never stop learning lessons (i hope!) I have sooo much so far.
>You bought crap
Hmmmmmm – define crap? (I am assuming that in the sentence above you were using the word ‘crap’ metaphorically?)
Every house I bought was structurally sound, as verified by a builder’s report – and two are working out great –
One of them (that didn’t need any renovations) is returning 20 percent after management costs, has been tenanted the whole time since I bought it bar one week in between tenants.
The other one which is almost finished being renovated (floors being sanded this week as we speak) will have a tenant moving in next week who has literally been hassling the letting agent every few days to find out when it’s ready – that one will also return 20 percent clear based on purchase price PLUS renovation price. It also happens to be in an area which is going up in capital gain (who knew?!!!)
The third one I bought for 16K with a sitting tenant (long term, documents) paying 90 per week. That was a 29 percent return, but she moved out. Bummer. So we renovated. So far no new tenant though, so am deciding whether to drop rent to previous level of 90 per week (then only an 18 percent return factoring in renovation costs) or put house on the market as is in pristine condition.
Because 18 percent still not too bad result and as I was planning to buy and hold and renovated accordingly I think I will perservere a little longer before making my decision.
So learning, yes – but so far so good, 2 out of three anyway
>crap houses and the pain has caused you to pour your poor >little heart out to everyone on this forum
What I discuss on this forum is numbers, deals, opinions, but i wouldn’t call it ‘pouring my heart out’ feelings type stuff.
dude -I won’t be offended if you don’t read my posts. Your choice. not pain so much as sharing problems that came up and what I did or was thinking about doing. I made the choice to buy three cosmetically challenged places rather than one middle market place because as you go up the price -range the rental yield goes down. Also for the chance to increase the value and rent.
>How much pain are going to put up with before you wake up >and sell these bits of rubbish (you call investment >properties)and really invest in quality
>property?Wow, you’re going hard on the metaphors tonight….
I think that as long as they are tenanted and giving me the desired returns (I’m aiming for 20 percent) why would I sell them? I think 20 percent return from a newly renovated property with all physical problems fixed that attracts quality tenants would qualify as a ‘quality property’ as far as I’m
concerned. These properties should continue to give me cashflow and go up in value too. The repairs and renovations i’ve done should last a good few years (brand new bathrooms, heating, flooring, etc) and as far as hot water cylinders going or roofs developing leaks, that can happen on medium properties just as much as cheaper ones. Besides they’re all fixed up now>As some little girl on this website said,all her money is being >poured into paying for repairs.
Adjudicator’s note –
‘little girl’ usually means a girl under 12. That does not compute. So did you mean to be both patronising *and* sexist with that remark? *bzzzt* You lose points and credibility.
Back to the issue
I certainly don’t spend ‘all my money’ on repairs, I decide after the builder’s report whether to purchase or not knowing what has to be done and pretty close to exactly how much that will cost, and count that as part of the purchase price when calculating my yield. I only invest money I consider to be ‘spare’
anywayI’ve already made back three times what i would have earned in a term deposit *at least* and that’s not even counting capital gains (haven’t had the properties valued yet but am going to soon) – and that’s even counting the vacant one. plus the ‘capital’ is appreciating not depreciating like a cash deposit does, (well the land portion anyway)
>KEEP AWAY FROM THE BOTTOM END OF THE MARKET!
look if you wouldn’t mind yelling that a bit louder, I’d appreciate it- you might draw a crowd. It would be delightful for me to know that you wouldn’t be vying for the same properties as I am.
>Go for the middle.
*punches BB in the guts*OK but you did ask for it….
>I forgot to say G’day Mimi,
*looks around wondering who he means and then realises he probably was trying to write “Mini” and just made a typo cause n is next to m – *
*crosses mind that BB was having an ‘I deliberately spelt your name wrong to show you i soooo don’t care’ -type moment*
>hope the rest of your life going BLOODY terrific!!!!
yeah it is thanks!!
health, wealth, and happiness to you and all who sail in youcheers-
Patrick
PS
I was on the debating team at schoolYeah – do it yourself. Take a friend or get a local yokel or backpacker and pay them 15 per hour cash. Make sure you do a LOT of prep – hole filling and sanding, and undercoating those bits so it doesn’t shine through. Good prep is the key to a good result and paint that doesn’t come off again!!! BTW You definitely need an electric sander.!!!! If you haven’t done painting before do it with someone who has!!!!! Allow an extra couple of hundred for rollers and brushes if you don’t own any.
Enamel gloss is really easy to stuff up ( from personal experience!!!- (as in for cupboards and window sills, etc) you need it to dry for a loooooong time and then sand between coats. Good result but a bit of a pain. The second time we used water-based gloss which though not as hardwearing as enamel gloss is a lot more forgiving to apply as well as much easier to clean up. We also used satin on the doors instead of gloss which was much easier.
Using the same colour on ceilings and walls saves time and energy too, if you can handle matt white-kinda thing throughout…
take the family member and their cheque book with you!!!
Hi teacher,
wow, yeah, great to hear your stories!” buy at the lower end of the market (if not the lowest) and then when all the cheapies are gone you hav increased the value of your place to around the next cheapest place available… “
if that is true i’m gonna be a happy camper, having just bought 3 this year at what I call the ‘bottom of the bottom of the market’ and done up two
hehe
cheers-
Minihey westan
I like your 36,500 bargain, congrats!!
Will you have to do much to it? Did you offer that unconditional? Did you get a builder’s report etc etc,
did it have a tenant, how much, sorry for asking so many questions – don’t answer if they’re too personal etc etccheers-
Minibillabong,
if you’d be interested in lending, renting, or selling the books and tapes I’d be most interested to check ’em out.
cheers-
MiniMain money saving tip especially if you love shopping as a sport is to leave your wallet at home – meaning all credit and eftpos cards. Just have enough cash on you for what you for what you went out for in the first place and no more!!
Another money saving tip is if you are going grocery shopping – eat first before you go!! – as well as make a list.
Shopping when peckish almost guarantees you’ll buy way too much junk you didn’t need.Better still leverage your time further and shop online (coles is good) and get it delivered. It only costs a few bucks.Also it’s much less tempting to impulse buy online, – the delay between ordering and delivery means instant gratification factor is gone, and along with that much of the appeal of impulse buying….
westan, around $300 per property per year with NZI.
Am insuring for up to a specified dollar value per property, rather than ‘full replacement’ insurance.
The way I calculate what that figure should be is purchase price plus what I spent plus 25 percent.cheers-
Miniyeh we have done this topic
my main feeling is that whenever anyone makes a great burst of energy to slag a competitor it’s usually because they have an agenda of their own- In Treed’s case he ‘s trying to be a famous educator too….and none of us have ever heard of him, apart from that he disses Kiyosaki – so in a way he’s leveraging off kiyosaki to get famous himself – hmmmmm….
has he contributed anything useful himself?
there are many possible explanations as to why RK doesn’t, hasn’t or can’t reveal the identity of Rich Dad – apart from the one Treed is suggesting.
later-
MiniHi Rita
I think you mean rates???It’s paid quarterly and the real estate agent will tell you what it is per annum. Maybe around 800 -1000 per year for places I have bought. Depends on size of land and rates in that area.
cheers-
Minihi insider,
does that mean joint ventures or maybe flips? you were vendor financed? Or some kind of non-traditional lender? Can you be more specific or don’t you want to give too much away?
I guess that without equity or a regular income and you’ve bought four houses, you would have had to get fairly creative…..
navy, slim has a wrap secrets for sale, which I have – I think it is the next best thing to going to a wrap seminar live, as you get the CDs which is Steve and co speaking, as well as a hefty folder of notes.
I read a bunch of books and after loving ‘real estate riches’ by dolf de roos I really wanted to go to his seminar which was thousands. Instead I bought a recording on 10 CDs at a fraction of the price of attending live, which i got a lot out of.
However it wasn’t until attending Steve’s Australia Property Masters live that I fully understood how to work out the numbers. Perhaps as an accountants Steve and Dave emphasise it, but that was exactly what i needed to get a handle on – the nitty gritty stuff. I also really felt the challenge to ‘take action’ and conquer the many ‘what ifs’ associated with starting out from the live seminar. nothing like being looked at in the eye while a presenter is saying that stuff,,,,
‘networking’ with other investors – even just being in a room full of people who mostly had a few properties each – was hugely beneficial to me as I don’t have people in my circle of friends that are doing it.
So I reckon books are great, recordings of seminars are good value, but going to seminars live is the best. i would recommend Steve’s, Dolf de Roos, Richmastery (which I have seen on video – very good too, I hear it’s very challenging to attend live cause they start at like 5 am and stuff and one person here on the forum didn;t like it, but i think others did, and anyway you can always buy the video set instead of going to it) – I have only read John burley books but i know he has a great reputation and i think his seminars would be good too
cheers-
Mini
