And isn’t there a new railway station going in between Warwick & Edgewater (Hepburn Heights area)?

Peter

Hi Sebastian – I knew a landlord (a corner shop owner from Taiwan) who owned a house in Marquis St (opposite Curtin Uni) and would have made a mint out of (mostly) o/s students. The house was 3br, 1 bth, but a sleepout was converted into a 4th br and a granny flat built behind.

Out of 5 students he collected $45pw, ie $225pw total. This was for…[Read more]

One accountant I spoke to (will be using him this year for the first time, seemed enthusiastic about my cashflow postive strategy) quoted approx $140.

On accountants, I’ve just been reading ‘The Millionaire Mind’. Thomas Stanley finds that wealthy people not only use accountants for their tax, but also use them (and lawyers) to provide more…[Read more]

NAB and Westpac were able to tell me if I qualified on the spot. ANZ had to refer it to their central office and couldn’t give me an immediate answer (and I was not a borderline case either!).

Westpac are wary about lending in some country areas. Even for a place in a city of 30 000 they would only lend 70%. Whereas NAB would lend the full 80%…[Read more]

Hi Willi

I wonder what you think of the following:

1. Visit country town and spend a week there looking for properties and end up buying one
(in March). It settles in May, start receiving rental income before June 30.

Though the stay was one week its sole purpose was to buy property. Am I right in assuming that all this travel and…[Read more]

Moe, Morwell, Traralgon, Sale and Bairnsdale have quite similar populations (10-20 000).

Moe and Morwell seem to be cheaper than the other two. They also have the worst long-term population trends. Given this I am a bit surprised that David’s property has seen some growth. However the Valley does have low prices compared to other country…[Read more]

Oh and another thing, buy a brick veneer + iron place rather than double brick + tile.

There have been subsidence/cracking problems in some areas (speak to the council’s building dept) and the council people & engineers recommend brick veneer. Also there are parts of some streets in West Lamington area that are best avoided due to this.

Ring…[Read more]

I also like the idea of buying places with existing tenants. Risk due to tenant problems
is likely to be lowered and you’re instantly getting an income right when there’s most pressure on your cashflow. Also you’re saving letting fees, etc.

I see the main drawback being that the tenant may be currently paying less rent than what you might…[Read more]

My own view is that Kal could be a promising place for cashflow positive property with yields of 9% common. Prices are low, average wages are high and there are many renters.

You can get a small 2 or 3br brick/iron unit near town for $70 – 100k. Rent would be approx $120 – $180pw.

Have just been there myself and the vacancy rate is currently…[Read more]

I haven’t dealt with them, but several people have recommended CGU. They also offer Landlords insurance.

Peter

That’s pretty much the same conclusion that Choice Magazine drew when they examined financial planners a few months back.

They found that many planners recommended investments that earned them the most commission, were too risky for the client’s needs or were unnecessary (faster repayment of the mortgage and elimination of consumer debts might…[Read more]

I won’t do your assignment for you (you’d probably fail if I did[]) but consider the following:

Profitability: Profit = income less costs.

On the income side, there can be rents and capital gain (when you sell). On the cost side there are loan repayments, insurance, what you paid for the property, agents fees, etc.

Some properties are likely…[Read more]

I had a very similar experience at an auction, but did not bid (not having a spare million!).

It was a mortgagee auction of a block of 4 units. The owners ran out of money, and the units were only half fitted out (no floors, no baths, no switches, etc). Where things were done they were done poorly (eg you could stub your toe on very uneven…[Read more]

I know it sounds simplistic, but here is what I’ve been doing:

1. Check estate agents websites (both for sale and for rent).

2. If an area could be worthwhile, pop into local real estate agents and ask them for a rental list (for details of rent) and look on their window for for sale properties. Also talk to agents.

3. When you’re really…[Read more]

The more rent you get and the less amount you buy the property for (or need to borrow) the better the cashflow. If you’re interested in cashflow positive property, use this criteria to eliminate 90% of the properties and locations you see advertised.

I’ve found that in Melbourne you’d be hard pressed to get $1 per week rent per $1k of property…[Read more]

If anyone’s reading this far, the Home Price Guide
tells you a bit about various areas you might be interested in. You can also order reports of recent sales.

http://www.homepriceguide.com.au

Helpful if you fear getting ripped off and useful part of due diligence!

Peter

A good technique is to list your fears.

For each fear:

a. define the risk/fear
b. list preventative measures
c. list your responses if it did happen

You will find that in many cases the consequences aren’t as bad as you fear, especially if you have a response to them.

My IP risks were as follows:

1. Interest rates could increase repayments,…[Read more]

Paul asked if ‘is 20% off market value a lowball offer’?

My answer would be yes, if we define ‘market value’ as what similar properties have sold for in the recent past. However if the seller is desperate, they might take it, grateful that they got 80% instead of 0%.

Consider that the seller might have set their asking price depending on what…[Read more]

I’m new to all this, so correct me if I’m wrong [], but I’d firstly get stats for sales in the area over the last year.

I got the sales report from homepriceguide.com.au which cost $50 per postcode.

This won’t guarantee a bargain, but it will stop me getting ripped off. If a property is way over what recent sales for similar properties have…[Read more]

One of the books I’ve been reading (Anita Bell I think) said that banks wouldn’t disclose their valuation, even though you paid for it.

I asked this question of the mortgage person I spoke to at ANZ and she said that ANZ do give you a copy of the valuation.

BTW ANZ was the only bank I spoke to that wouldn’t tell me if I’d qualify for a loan or…[Read more]