Forum Replies Created
Tumbarumba is too far from….1. decent snow, 2. Bunnings, 3. Macdonalds (Gundagai or Albury) So are you expecting renters to drive to Batlow to pick apples and earning $120 a day during February to April? Or maybe drive a little further on winter slippery potholed roads to the sawmill at Tumut? Maybe I missed the big employment generators each time I've cycled toured through Tumba.
We use excel with a few pages and based on the tax office requirements forquick input to etax. ( over 15 properties with many having multiple rentals ie dual occupancy or 4 units)
Each month we review bank statements received for the previous month against the property managers' reports to ensure rent payments and put the net payments into the onth's income. The expenses from PM statements as well as any other expenses for the moth are also entered against each property.
Having been involved in computers for nearly 30 years I have seen many software programs become obsolete so that's why we have chosen a stable longer term and simple spreadsheet system. Remember, excel cell data system evolved from lotus 123.
The simpler the system, the easier to come back after two-three months of holiday and get inputing.
1. Check with Council zoning provsions. Check car parking requirements, separate driveways etc.
2. Discuss with bank as they are using the property as security.
3. Ask a reputable Building Surveyor about fire separation requirements under the Building Code of Australia. Also consider separate water meters, additional garbage bin, additional mail box, spearate pedestrian access. Noise transfer between dwellings.C and holding on well. Good time to increase rents without compromising vacancies because the tenants are now more aware of the mortgage rate rises and less likely to leave…if there is anywhere else to go to. We have 100% occupancy except for 3 weeks changeover on two IPs.
SMH today page 7 "Interest rate cuts are on the cards at last" by Jessica Irvine – quotes Macquarie Bank boss Rory Robertson stating that "An RBA cut in September now is given. The only question is whether it's 25 basis points or 50 basis points" And he alledgely stated that he expected rates to fall by between 1 and 1.5 per cent in the coming year" ref: http://www.smh.com.au/news/national/interest-rate-cuts-are-on-the-cards-at-last/2008/08/05/1217702042543.html
Break out the bubbly!@!! At least the upward pressure has stabilised.
The issue of living in a shed is a Council planning issue. Sheds are not intended for habitation pursuant to the Building Code of Australia. Using the shed for habitation is a change of use which must be approved by the local council pursuant to the State planning legislation and local planning provisions. The initial approval of the shed, if it exists, may have a restricting condition of consent prohibiting the use for habitation. Either way you would be either illegally using a shed ($600 fine in NSW) or contravening a condition of consent/approval for the shed ($???). The local Council can then issue you with either an intention to serve an order under the Local Government Act (if in NSW) to cease the use, or just serve you with the order straight out. Best to move to appease the authorities and avoid a negative legal stoush.
Insurance of the shed may? be compromised by misusing the shed if that action contributed to a damaging incident such as a fire.
If the shed is well away from the roadway and there are no nosey neighbours then the use of the shed for habitation could be undertaken without Council knowing and then if caught just play dumb. Keep the car movements, pub & local talk to a minimum as well as delivery of personal goods & services &mail to keep under the Council radar and conceal evening lighting where possible (blankets over any windows, and no loud & wild parties!
One way of looking at this decision is the development of 90,000 outer urban land lots will eventually increase the demand for inner and middle ring properties. However it will lower the value of properties already in the far outer suburbs as deamnd is met or even oversupplied.
I severely doubt whether the Vic govt and the state has anywhere near the capacity in contractors, builders, engineers, nor would it have the price capacity to lure such workers.Make friendly contact with the Council planner – they can be friendly if you use the right approach. (I am a municipal development control planner)
Also a Tasmanian mapping system at http://www.thelist.tas.gov.au/listmap/listmapstart.jsp is invaluable. It has helped us in making a site plan for discussions with public authories.I definitely agree with starting small <$200k but it is hard if you are located in the capital cities. I guess I would look just outside my capital city and do the ongoing analysis of opportune properties.
I'd love to run a property investing course through TAFE having 15+ IPs. I enjoy teaching people (ex instructor) and have a wider then normal field of expertise and knowledge that can make a difference (ie LOA, Council requirements, Admin for IP). However, I am currently employed and enjoy the job. I would be happy to run a course through TAFE in southern NSW if TAFE asked me.
One thing that seems to have eluded many commentors and authors is how to administer your IP and PPR system efficiently. This is really an important IP segment after the fun times of purchasing and renovating.
The needs to meet your way of thinking and operating.
I believe it needs to:
a) meet the requirements of the ATO (so you can get a quick return and re-invest)
b) track rental payments through bank statements
c) be effective in finding out the insurance info, lease aggremment info, property details, property mgt details
d) be efficient in filing expenditures
e) be easy to understand when the ATO audits in 5 years, or for your will executorOur system is made up of
a) excel spreadsheet component for expenditures and incomes
b) the bills to pay tray – in chronological order
c) concertina folder for doc info to be entered onto the computer
d) hard copy system made up of lever arch folders
1) Each folder has on the spine in big letters the property name ie street name or suburb/town as well as the insurance number and loan umber on the spine as well,
2) Front plastic sleeve with TAX 07/08 in permanent marker on it – for expenditure receipts
3) Divider Tab – Rental – for rental statements from property managers, inspections and lease agreements
4) Divider Tab – Insurance – policies and associated docs
5) Divider Tab – Loan – loan docs, bank loan statements
6) Divider Tab – Purchase (located at the back – for initial acquisition & research (nice to read back at some of the adverts being considered after a few years!, strata stuff, reno stuff
e) a tray system for each property which all relevant docs are placed after being entered on the computer ready for lever arch filing.
f) Lever arch folders for Line of credit, Research (ie new deals)
g) Usual collection of API magsSo the admin system is just one segment of IP. We have found there are several interconnecting segements of IP.
a) Property research (yes we have bought IPs when on holidays!, looking for multiple income streams off one property ie house and granny flat) – also what sort of ownership type – joint, individual, trust
b) Finance (getting it ready before buying, we're always a bit late on this!, having a broker that is also a direct property investor-should be your first question to a prospective broker along with how many and where.)
c) Making the deal (how to get the vendor's agent working for you and achieving the lowest acceptable price – I reckon having the finance ready then offer a silly low price but add the enticement of 30 day settlement and no conditions – you won't get every deal but the deals that are successful will be +ve or close to it)
d) administering the whole process from start to ongong
e) exit strategy – what are you doing all this for? If it to retire early then considering when to sell, is there another way such as seeking an additional LoC and living off the rental income whilst using the additional LoC for paying the shortfall on loans.(Double tax deduction)
d) Having fun!! and Communicating Effectively by stopping the use of acronymsWhilst not in Perth, I would recommend asking the relevant Council’s Town Planner what companies they regular see in subdivision applications. Then you know you are dealing with a local surveyor who knows the relevant Council rules.
Yes, Jaffasoft, .. time to reconvene? Catch up with how we are going and today’s opportunities.
Make offers that are cash flow neutral. There might be a desparate owner in amongst all those properties. Remember, if you can show the colour of the gold, someone will go the grab and the agents will start working for you and not the vendor. They are just after a sale, price reductions, I reckon, have little effect on their payment. But what would I know, I just keep buying +ve where I can find ’em.[strum]
Definitely depends on what type of easement. If sewer, it may need to be replaced with the high quality sewer pipe and the easements designed so as not to impart any load upon the pipe. Consider how will the service be replaced when required?
I agree with Wake in regards to the strata subdivision. You may need to consider some visitor car parking spaces in the common property. Two should be enough, but your Council will have its own car parking space by land use provision requirements.
Also consider the practical access issues such as car manouevring on the common property and the movement of garbage wheelie bins. Also consider the provision of separate water supply meters and gas meters if applicable. This makes each tenant responsible for these services rather you as the body corporate owners.
A reputable strata management company could assist in the strata management set up.
If in NSW, the strata development application will also need a Statement of Environmental Effects. Three questions that must be answered in the SEE are:
1. What are the environmental impacts?
2. How have the impacts been identifiied?
3. What steps are taken to minimise the potential impacts?
These questions are required under
ENVIRONMENTAL PLANNING AND ASSESSMENT REGULATION 2000 – SCHEDULE 1
SCHEDULE 1 – Forms
(persuant to Clauses 50, 126 and 139 of the Regulation)
Part 1, 2 Documents to accompany development application, (4) at http://www.austlii.edu.au/au/legis/nsw/consol_reg/epaar2000480/sch1.htmlThese questions sometimes require a degree of imagination when there is really no impact to the environment, particularly for strata subdivision.
WARNING: If any part of the subject land is covered by Bushfire Prone land than the whole application becomes Integrated Development under section 91 of the Environmental Planning and Assessment Act 1979] (Ref: http://www.austlii.edu.au/au/legis/nsw/consol_act/epaaa1979389/s91.html) and requires a Bush Fire Safety Authority from the Rural Fire Service under section 100B of the Rural Fires Act. (Ref: http://www.austlii.edu.au/au/legis/nsw/consol_act/rfa1997138/s100b.html) That means a Bushfire Assessment Report (in accordance with reg 46 of the Rural Fires Regulation 2002 – http://www.austlii.edu.au/au/legis/nsw/consol_reg/rfr2002229/s46.html)will need to be forwarded with the DA along with an additional $250 cheque payable to the Rural Fire Service. Don’t even try fighting this one. It’s L.A.W. A bushfire assessment report can be undertaken by anyoje with familiarity with the Planning for Bushfire Protection 2000 requirements.
Question for nordicskier:
RE: Paulskip
“So what if you successfully got it for say $115K, divide by 2 (58) and multiply by 3 (168) so it will cost $168 per week in mortgage payments and a bit towards rates etc. So you increase the rent to $170 and see what happens or purchase for $100k ( /2 then X 3 = 150) that would be cash flow positive.”Could you please explain this working out a bit more? Why do you divide by two and multiply by three? I’m interested to know just what you mean and how this could become positive cash flow.
Paulskip, I look at hundred of properties each week and need to do a quick calculation to find the diamonds. The calculation is quick and dirty but good enough.
So a property for $115,000 will need $174 per week to service the loan (not $168 – I made a mistake)
Proof: As calculated on smartline.com.au
Loan Amount: $115,000
Interest Rate: 7% Loan Term: 30yrsPrincipal & Interest – Weekly $176.45
Interest Only – Weekly $154.81 So $173 is close enough
So how to get from amount to week repayment?
– amount in thousands ie 115
– multiply by 1.51 I don’t have a calculator with me all the time so I can either divide by 2 (58) then multiply by 3 = $173 – loan repayment per week.
Or just add a half to 115 (ie 115 + half of 115(58) = 173)I figure if you have to look at so many properties, you have to know what you will need to pay the loan from rent, especially during negotiations. I hope this helps. PM me if you want more assistance.
What about some pro-active planning?
I reckon two things equal property investing.
1. Find money – use brokers – start making a list of brokers
– make up your financial sheet ie assets, salaries, debts etc.2. Find a propertty – use real estate agents – make list of agents and their emails & phone numbers
So what property do you want? Cashflow positive eh? Capital growth? Write it down, and location, close by so you can reno if needed or further afield?
If you then know what you want then start contacting the real estate agents.
Don’t forget the money chasing – you need to be confident you can get some money and how much. Once you are confident in this area start letting the real estate agents know you’ve got some gold.
Are your reading every real estate advertising paper yet? Got to have a handle on some baseline prices ie 3 bedroom/double garage & ensuite for $250K X 1.5 = $375/wk rental to fund 100% of purchase amount. Need to have the stamp duty, conveyancing fee and inspection costs.
Happy Learning.
Not all Councils require a building design prior to subdivision, some just require what the intention is ie residential. So it depends on where you are subdividing.
I would check where the services are connecting and the easements. Then the town planning street setbacks, these can severely restrict development on a corner site.
Don’t get hung up with the figures too much. Just offer 20-30% below advertised price and see if any fish bite. And just get into it.
Rember once you’re in it doesn’t matter what the market is doing – if it drops you’ve got opportunities, cashflow positives emerge, yippe, if the amrket goes up then revalue and grab the equity for some more deals. Too simple! But take action ie buy, polish or reno, rent out and be patient.
Oh yes there is no free lunch, if your got IP’s your letterbox needs to be enlarged, better still get a post office box, because the rates, and statements from PMs, bank statements etc will explode in no time. Secondly you will spend a lot of time paying bills, negotiating with PMs, fixing broken bits of properties, keeping the paper up to date everyday and the tax office lodgement – but you do get a nice tidy sum of money back, in two-three weeks if submitted elctronicially.
modernARTillery – check your private messages for reply
