Forum Replies Created
Cheap properties do not mean bad tenants. Bad tenants come from all socio-economic backgrounds and so do good tenants!
Good luck, always do your homework on both the property, town and the tenant and you should be fine.
PK
PS. And don’t forget Landlords insurance, just in case!!!
Anne,
I had two negativley geared properties when I read Steve’s book and decided on a change of appraoch. However, I was and still am happy with the growth these properties are giving so didn’t want to sell either.
So, I didn’t, one cost we $30 a week, so I went and found a +ve geared property that earned that amount so now the extra on one covers teh shortfall on the other.
The second negativley geared property was only -ve by $5 per week so rent rises over time has sorted that one out, it’s now neutral but give it a few more years and it will be +ve.
I have bought another since that is also +ve by only by $8 a week, but it does need a paint job that may improve the rent a bit and other than that, time will help.
So, yes, you can purchase +ve geared and still keep the -ve geared ones, you may not accumlate as many +ve geared ones as someone else who doens’t have funds tied up, but then if you are getting growth tat you are happy with then you may not need as many.
Work out your long term goal, what are you hoping to achieve and that may help. for instance the -ve one we have that is achieving good growth will eventually be sold to pay off the mortgage on our own home, but +ve geared ones will be kept to give us an income as we don’t want to be 55 or older whenwe retire.
THis is just my situation but hope it helps a bit.
PK
Hi Jo,
Yep that’s a good one! Worse than my scenario. At least I can afford to replace the fence but hard luck for those that get a new fence but can’t afford to replace the house.
Just shows that we do need to read the fine print, however boring it may seem at the time.
PK
WEll, rents on three of our 4 properties have gone up since May, each was only $5 a week more. Two have long term tenants who have stayed and the third is a unit that has always have short term tenants so time will tell on that one. (All in WA).
PK
Hi there Gabbo,
1) I haven’t done this myself although have looked into it a bit, hopefully, someone else will reply that’s actually done it, but here’s what I found:
2) How long the subdivision may take varies depending upon the council and what else is happening in the area. One area I looked at, the council said it usually takes about three months for them to approve, however a real estate agent in a different area advised that approvals by that council were taking anywhere up to 12 months and that they weren’t approving anything that became a “battleaxe” block, they wanted roads put across the back of blocks that could be subdivided to give each block a street front. This then added to the costs of subdividing and the need for the house before yours to be bringing the road past their home. Believe this is unusual but pays to talk to the council in the area that you are considering and find out what their expectations are.
3) Early access to a property – this I have done more than once, but ususally works best where the home is already vacant and I usually put on the contract that I want access once finance has become unconditional. This gives the seller reasonable piece of mind that it will be going ahead. Having said that I don’t usually do anything strutural prior to settlement in case some sort of problem occurs but can arrange any quotes etc I need prior and have it all set ready to roll upon settlement. Also make sure all your other conditions are met prior to taking possession ie: termite inspections done etc. Once you take possession you often lose the safeguard of these things so get them done first.
4) You could put the sudvision clause as part on the contract ie: that the sale is subject to subvision being approved. However they may not then give prepossession until this point otherwise your in the house on a contract that could fall through if subdivision doesn’t occur. Also you may need to have them sign the paperwork for the subdivision as they are still the owners, if this is the case you’d need to include this into the ocntract as well.
Perhaps others can shed more light, but that’s my two cents worth, good luck.
PK
Ah yes, insurance policies are forever changing!
I have just found that our policy does not cover the fence falling down due to wind or storm damage! Fences don’t often fall down for amny other reasons so they have certainly reduced the number of claims they will pay out.
Never mind, we found out on an affordable item, thankfully. CommSec has just lost all our building insurance policies though becasue I can’t see any sense in having the fence covered if it doesn’t include damage by wind or storms.
PK
PKOk, on a serious note, the things that would stop me investing in a town like you mention would be “
a) population declining
b) one industry town
c) no form of public transport to the nearest city.I have a property in a town of 4000, where the population is stable, it may even show a rise in the next census if buidling approvals are anything to go on. It has more than one major industry providing employment and it has a daily train to the nearest city. I’m extrememly happy with the rental yeild and have added value and obtained growth. I don’t expect major growth but am confident it will continue upwards even if it is slowly. Plus the cashflow from this one is paying off our -ve geraed one.
Having said that, I won’t purchase another in the town as I don’t want all my eggs in one basket. I have a policy of one house per town/suburb policy and so far it’s working for me.
Good luck with yours.
PK
I odn’t have a report to send, my concern si that their free data has not always been accurate.
I recently emailed them about 3 towns where their data didn’t match the ABS data. They agreed it needed updating!!! It has since been updated “after a couple of reminders” (took over a month for them to do so), but I am concerned to to how many other towns may be incorrect so am now a bit dubious about relying on their data. I would a t least cross reference it with data from somewhere else to ensure that the town you are looking at apperas to be “up to date”.
Regards
PKScott.
Looks lovely.
PK
Spot on jhopper.
I’d probalby put “subject to you being happy with a building inspection report”. Once you have received that, if there is too much to be done then you are not happy and can opt out or renegotiate.
Good Luck
PKZen,
Dunsborough has been “going off” for some time so they may have had it long.
Simond, it may depend what your long term goal is, do you want the cash as deposits on something else or are you looking at capital gains with the tax breaks that a negativley geared property will give? As well as depreciation? Think about what you long term goal is and that may help you decide.
Regards
PKThat depends upon the council and the type of zoning etc. Things such as sewerage affect this. Often the answer is no or there still needs to be minimum land size per dwelling ie: The area I live in doesn’t have sewerage connected, so although we have a big block we are only allowed one dwelling on it until sewerage is connected. We aren’t even allowed a granny flat. We are also in an area where they are perserving natual vegetation so even if we could have a second dwelling we mgiht not be able to have one if it meant kncoing down adult native trees. We’re happy with this arrangement as it protects the lifestyle we want, but these are just some of the type of factors that could affect a council’s decision as to whether you can have a second dwelling, so I think you really need to ring the council of the area you are looking and ask a few questions.
Regards
PKLisa,
It’s not all doom and gloom, I self manage two of ours and it’s not been a major headache. Yes, there’s been the odd hiccup but nothing that couldn’t be sorted over the phone or by phoning a tradsperson in the area to look at it. Having said that you can always change over to an agent if you find it too much.
Best Wishes
JudyYou can buy this kind of stuff from RPData. When looking at population stats (ie: their free data), cross reference with ABS as the areas sometimes include surrounding areas and not jsut the town etc, so make sure your getting the info you are actually trying to find.
Regards
PkTime – I htink the biggest sacrifice is time. Using it to research and look at towns/suburbs and IP’s.
The other thing we’ve sacrified is our veradna on our PPOR. Would love to have one, but each time we save for it we end up using it as a deposit on an IP.
Correct in that it doesn’t affect your Rental Yield.
HOwever, does affect you if you wish to sell or if you wish to use the property as security.
Marisa,
Someone on here (and I can’t find it now, but perhaps someone else can) made the comment ath you bought a land and building package then the 12 months starts from signing up on the package, however, they said if you bought land and just held it then purchased the building separately then the 12 months would start from when the building was signed up for. I wish I could find the thread but jsut thought I’d mention it as it may be a factor in how you do a project like this. I don’t know the reasoning or even if it was correct but as it was mentioned it’s worth checking out.
Regards
PKHi Kerry,
Do a search on the word Geraldton, I think you’ll find quite a few threads where Geraldtonoa dndifferent ares of Geraldton have been discussed.
On a personal note, we have a unit there that is +ve cashflow, alhtough not by a great deal so if interest rates rise it will become neutral. Having said that the rent has gone up recently so perhaps it’ll hold it’s own and remain +ve cashflow. Only time will tell I guess.
When the railway is sunk that will make the city itself more appealing so whether there’s possible gains in that area? It might make a neutral investment worthwhile, but then you are banking on the unknown (or the “possible” that may not happen).
Good Luck
PKI’ve got polices with EBM (that’s Rentcover, mentioned above) and also with CommInsure. Both do quotes online so I usually compare prices etc first and then buy.
Regards
PK
