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just remember the killer stamp duty on purchases. It varies between states, but in NSW you can very quickly burn $20 – $30k in taxes and charges on each purchase / sale – this quickly erodes a lot of profit!!
For what it is worth, I fully agree with Scott no mates comments – those items he mentioned are the difference between a great deal and a real shocker. As for your list, all items that you have noted as "installed by the tenant at their cost" I agree with, but those items being installed by the landlord and amortised (air con, carpet, blinds, security bars) would seem to be standard inclusions and I would have thought would be included in the base rent. It is a bit much to expect a tenant to lease an office without carpet or air con in this day and age (I have tenants who expect a rent holiday if the air con breaks down for a day!).
Also, just be careful you don't end up with a gross rent + increases in outgoings over base year – it is a great deal for a landlord but you will pay for the increases twice.
I use Robilliard & Robilliard at Parramatta. They are a full service law firm, which can be more handy than a standard conveyencer if something goes particularly pear shaped.
This is going to depend on the repair and maintenance clauses within the lease, as they can be so varied. Is it a net or gross lease? Generally most of the leases I have dealt with require the tenant to maintain the landlord's equipment within the premises. So like Scott said "I'd suggest advising/reminding the tenant of their responsibility to service the pump & flush the lines (pressure spray/water blast)". There is also often something about not using equipment for a purpose other than for what it was intended. If it is a net lease, then you can easily recover all repair costs as outgoings as long as it is not a capital replacement (and even then you could go the tenant for negligence).
As for the greywater, I am surprised that is being directed down stormwater rather than sewer? E.g domestic washing machine greywater is disposed of through sewer pipes, and that is going to be cleaner than any paint greywater.
Please see another thread on this topic. Stanhope Gardens is actually a suburb with good prospects (reputable companies are investing millions in this area) however Bathla Investments seems very concerning from what I have just read.
Just one quick tip – minimise non-deductible debt and maximise deductible debt.. You seem to own more of your investment property than the PPOR – Whatever you work out I would move some of the debt from PPOR to IP at least getting the IP up to 80% debt.
The critical points are "collecting rent" and "carrying on business".
My wife and I own an investment property (although it is technically all mine legally for tax reasons). The tenant pays the money into my bank account. My wife however deals with any issues arising from the property (the tenant is known to us, so a special relationship). She is not a Property Manager, however she gets a reward from the proceeds of the property.
So long as the Lease does not mention Camb as being the Managing Agent, and the rent is paid direct to the owner, I can't see it being an issue.
The above said, I should add that I am a Property Manager by profession, so whilst not a legal expert I do have a vague idea what I am talking about. Also, if I was overseas, or had a more complicated investment property, I would call on a local professional. I am simply answering the question of could it be done, not recommending whether it should be done.
If the gov't reduced the tax breaks for investors in real estate (of which NG is one) then the investors would be less likely to choose to invest in property. This would have some effect on the demand for purchase of property (i.e drop sale prices slightly) but it would have a much greater impact on rentals – and in the wrong direction. Less investors = less rental properties = higher rents. Investors will only purchase property when there is a sufficient return above the risk free rate to justify the risk. Tax breaks help to make the return stack up – remove these and rents will only go one way. Then there will be more owner occupiers in the market, who will push the price up to a level that is sustainable for investors…. and around we go again
There is only one way to improve afforability and that is to increase supply by enough to reduce prices. To do that, they need to reduce the costs of development (and that is another topic).
But, here's the catch – if prices go down, then there are going to be a whole lot of people with negative equity in their home. This will be bad news for politicians popularity, and even worse news for banks who can't recover their money when borrowers default with an LVR of 120%.
You only need to be licensed if you are handling trust money. If the tenant pays the rent direct to the owners bank account (which he / she may give you direct access to), and you just take phone calls / emails on behalf of the owner, and organise tradesmen, then I can't see why you would need to be licensed. It is no different to being the lawn mower or cleaner. If you hold money in Trust though (ie. operate a Trust Account) then a whole new world opens up, and you would want to be well educated and qualified.
Thanks all for your advice. I have spoken with council, and other than a minimum lot size and frontage (both of which I will comfortably meet) they don't have specific numerical guidelines, it is more qualitative and subjective, which is not such a bad thing. I am now in the process of compiling all of my information, and then will talk to some experts.
PPProjects – I had a look at your website, but it would be great if you could give an idea of some projects you have been involved with.
Multiplying your costs by 1.25 is to give you a 25% profit margin (this is what developers will aim for), and I'm guessing dividing the sales by 1.2 is to allow for a reduction in sales price below what you were hoping, if this becomes necessary. That is, to get a 25% profit in a "bad case" scenario.
