Hi eve100,
If you are based in Melbourne suburbs, you can try using Nancy Keep & Associates (www.nancykeep.com.au).
She is a serious property investor herself and has a very good group of associates (finance specialists, insurances, property manager/s, etc.).
She can offer some other innovative (and tax effective) investment products as well.
Hope this helps.
Sanjiv

“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela

Hi petlover,
Firstly, congratulations on your decision to buy your first investment property.
I think the answer to your question depends on what you want to achieve from your property investments. . You may buy some negative cashflow properties to balance your property portfolio but it should not be bought to get some tax benefits. Given you have not bought any IP earlier, you do not have a property portfolio to balance. Remember, assets feed you, liabilities eat you. A negative cash flow property is nothing more than a liability. It will tie you more to your job (assuming you have a job/self employed). I don’t know what your long term goal is but for me, property investment is a vehicle towards financial freedom and (semi) passive income. Those objectives will not be met by investing in negative cash flow properties. You can find positive cashflow with capital growth as well. Typically, you will find these properties in and around regional towns.
Also, when buying propeties, you should be ready to hold them for a period of 7-10 years. Historically, the prices of properties double in that period. Holding a negative cash flow property for that period will be a burden on your personal cash flow and unless you earn six figure income, you will probably stop after buying 1-2 properties.
I hope this helps and good luck with your investments.

Regards
Sanjiv

Hi Mat,
You can try using positiverealestate.com.au. They are buyers agency that will spot a cash flow positive property and negotiate it on your behalf.

Warm regards,
Sanjiv

Hi ao,
You have to be careful when you read developers advertisement like that. $350k house in Point Cook is not very cheap. The 20 minute travel to city is non peak hour travel time. You would use West Gate bridge to travel to Melbourne city and its like a parking in peak times. I think the “real” travel time is anywhere from 40-60 minutes.
Also, you cannot just simply compare the prices of houses in Point Cook with that of Sydney. They are two different markets. In fact, $350k house is few % higher than the Melbourne median price as well.
Point Cook and some other suburbs around it (Tarneit, Hoppers Crossing, etc) are on Victoria’s growth corridor. There is lot of development happening and with the slow down in the property market, there has been (to some extent) an oversupply of land and properties in the area. Not long time back, I saw ads in the newspaper where a land developer was giving a free Barina (I think) with the purchase of a block.
That said, Point Cook itself is a nice area. I have gone there couple of times. And I don’t believe the RAAF base is operational anymore. I am not convinced about long term rental demand in the area. The new estates like Point Cook are more owner-occupied.
Hope this helps!
Sanjiv

Hi CJ,
I don’t think its a great idea to invest in land unless it is in very high growth area. You are better of investing in a small residential property where a large portion of your outflow is covered by rent. And if you do it right, you may even have cash flow positive investment.
I am assuming you have a negative cashflow of approximately $7000 pa on your land investment. With that kind of negative cashflow, you can buy a relatively new $350-400k house/unit in a major city with prospects for good capital growth. For example, south east queensland is expected to grow over the next few years. You can invest your money there or similar high growth areas.
Hope this helps, Good Luck

Sanjiv

G’day Mark,
This sounds like a good opportunity. However, you should be aware of the following:
1. Make sure the lenders don’t treat this as a commercial investment and therefore only fund 60-65% of the purchase price.
2. While negotiating, make sure all outgoings (not just the rates) are paid by the developer.
3. If its a fixed term contract with the developer, try to fix the rates on your loan so that you know the exact cashflow.
4. In your negotiations with the developer, have CPI increases from second year onwards.
Hope this helps, good luck

Sanjiv

G’day Paul767,
I would not suggest such an investment for the following reasons:
1. As you know, you have to come up with a substantial deposit. Using the 50% deposit on a purchase price of $125,000 (I don’t think you’ll find an apartment cheaper than that) means an initial investment of $62,500 plus closing costs (say another $7,000). You are looking at a deposit of almost $70,000. Assuming LVR of 80%, you can buy a residential property of $400,000 plus $20,000 closing costs. With a larger starting position ($400,000 worth of property vs. $125,000 worth of property) you will tend to have a larger capital gain if there is growth of say 10%.
2. Generally, the investments in hotel apartments have significant on-going costs including body-corporate, management fees, etc. The gross yield looks impressive but its the net yield that you need to consider.
3. The capital growth on these investments is usually very limited.
Hope this helps!

Sanjiv