Sounds lovely. 

Have you thought about how you will power your house if the power is 2-3km away, look into the cost of getting the power connected from that distance away or how much solar panels and batteries would be.  This could add quite a bit to the initial cost.  Rainwater tanks will solve the water problem assuming they can be transported to the island, check out the cost  of doing so?

Lastly ring a builder who works on the island and find out what the costs would be to build on the island, there's probably extra transport costs of either brining the goods by barge or boat.  Not saying it can't be done but go into this with your eyes open, know exactly what your costs would be.

Gook Luck
PK

Reading is a great way of learning. Although I have also been to seminars in the past I feel that reading has been one of the greatest ways to learn as you can go over bits as many times as you want.

Now, do read one of Steve’s but also read some other authors as well as there are many different styles out there and you need to read a few to find out what investment style suits you best.

My suggestions would be:

a) From 0 to 130 properties in 3.5 years (Steve McKnight) although his second book was good too and I haven’t yet read the latest.
b) How to Create an Income for Life (Margaret Lomas)
c) Building Wealth through Investment Property “or” More Wealth From Resdiential Property (Jan Somers)

I probably found Jan Somers books the most balanced as in it gave examples of negative and postive geared properties and the outcomes etc. For us Margaret Lomas’ way is actually the easiest to follow while Steve’s would be my ideal. Basically after reading lots we picked the path of least resistance (I think that’s one of Steve’s lines) and for us that meant going the Margaret Lomas way most of the time, although we did manage to do one Steve’s way.

What I’m trying to say though is read more than one book, read several. Don’t get bogged so down that it all becomes confusing and you don’t know what way is right, because they are all right for somebody, just look for the way that will work for you.

Best Wishes
PK

[bow]

I have the PIA software from Somersoft and always found that to be wonderful. I’m fairly sure that McKnight has software advertised here that does that type of thing too, so hopeuflly someone will come forward as to what that is like. Plus try looking up “Jaffasoft” posts, I seem to recall reading his posts, offering free or cheap software.

I realise my reply is a bit vague but do recall reading of different things on this site in the past, so hopefully the odd thing above will give you a couple of leads to follow up to find something that suits you.

Regards
PK

Is the CGT going to be as bad as you think! Before trying to avoid it which is unlikely, look at what it would be. My rough calcution (worst case scenario) would be around $35,000 each but that’s based on the very little info given and it would depend how it was purchased ie: names on the title (joint tenants or tenant in commona nd percnetage etc), what costs need to be deducted etc etc. That would still mean a profit of about $130,000 EACH, not bad for 4 years.

If you need the funds then pay the tax and take the funds, your still well in front.

PK

I have never bought in Kalg but live in WA and have investigated the market several times.

What I have found is that when resources and doing well so does Kalg. When resources are not doing so great then often you’ll need to reduce rents to get tenants or you’ll ahve periods where the property is not ntenanted and the porperty doen’st appreciate duirng these times. However, if you’re holding for the long term then the good times probably outwiegh the “not so good” times. When it comes to selling though, you’ll want to do that in a “good time”.

I don’t believe prices drop in the bad times but often houses sit on the market for a long time without growth in the bad times.

It could be a good place to invest, just go in with your eyes open and be open to considering who rents the type of property you’re looking at. If it’s suitable for single accomodation only and the resources boom busts then who do you rent it to? On the other hand if you buy a unit or house then perhaps you can tap into the family market or something, rent may not be as high as renting to the miners during the good times but it gives more options. It’s only a suggestion, you need to make up your own mind on this.

Regards
PK

You could get a valuer to value the property, explain what you are trying to achieve so he can separate the values for you.

Or try ringing the valuers general office in your area and see if they can help with land value.

Or ring a different agent in town and ask if there are any blocks for sale around the area of the house, if so, ask the price of the blocks, this will giv eyou an idea of what your block would be worth.

Good Luck.
PK

Hi Jeff,

Are they on a lease? There may be a section in the lease, if so you will need to abide by it.

Secondly if they are on a lease then I think they have to stay while you are selling, but if they aren’t then they need only give you 21 days notice (in WA anyway that’s the standard notice) that they are going to vacate and then you are receiving no rent while selling. Is that a problem?

If it is then I can only suggest that you don’t give too much notice.

We recently advised our tenant that we intend to sell in a couple of months even though his lease had run out. We knew he was on the State Housing list so asked him if he could check for us how far away he was. Unfortunately it seems he’s 6 to 12 months away so we simply apologised and said we couldn’t wait that long but he’s welcome to stay on at reduced rent while we sell if he’s willing to keep the place looking good. He was very happy to take this option, so it meant we were still receiving some rent while selling and for him it meant he could put a bit aside towards moving in the event that an investor doens’t buy it. Do you think reduced rent may entice your tenants to stay and keep the place looking good? Some may just want to be out of there, only you can assess what may be work in your situation.

Good Luck, and check the lease first and see if says anything.

Regards
PK

Hi there Islandgirl,

First thing I’d do is ring another agent that manages property in the town and find out what vacancies are like and if $120 is the normal rental rate.

I’ve known owners who will pay the rent for twelve months themselves so that they can sell the property so just make sure that after the intial 12 months you will actually be able to rent the property for the same amount and it wasn’t inflated to “get the sale”.

Secondly, if you really can’t inspect it yourself then put in a “Building Inspection” clause and have a building inspector check it over so you know it’s not about to fall down the day after you settle. This will give you piece of mind.

Also make sure that there is a property manager in the area because otherwise you may end up having to manage it yourself and if your 7 hours away, then it’s difficult to do inspections or worse still if you had to go to court then it has to be at the court nearest the IP and not nearest you. If there’s a PM they will do this for you, but if your managing it yourself then it’s a long way for court hearings. Hopefully you never need attend one, but you never know.

The others have already asked about the population and proximity to a bigger town so I won’t cover the same ground there.

Bascially if you’ve done your research and think it’ll work for you, then go ahead and good luck.

Regards
PK

Before you purschase you should have your exit strategy worked out so you know what you are trying to achieve.

For some people this may be a buy and hold until they retire and then sell some to pay off others so you then have the rent as income on the ones that are now paid off.

For others, they may wait for a ceertian amount of growth and then sell so that one sale may then fund two new purchases etc.

Others may buy properties that they can add value to so they then have a postive income immediately.

There’s many different scenarios, but firstly you need to work out what you what your end goals are and then work out what will work to achieve that end goal.

PK

Hi Pilum,

Back in 2004 when this thread first started, properties in Balga were around the $200,000 mark. Seems I picked a right suburb becasue as you started the prices have grown remarkedly. Shame I don’t have an IP there![annoyed]

PK