Forum Replies Created
28/ Don’t give the bank more security than what they need. No point losing more than you have to if things do go wrong.
Fortune Favours the Bold.
The states are different again by the sounds of it…
Is the WA the only state where every RE agent has written “Offer and Acceptance” forms that you fill in? Do any other states do this? Just asking for interest sakes in case we ever venture interstate for IP’s.
PK
Fortune Favours the Bold.
Even with the WA deposit system, it is not necessary to pay it at the time of writing up the offer, ususally you pay it within 7 days of acceptance of the offer. I gather from the initial enquiry they were asking you to pay up front before they’d even show the offer to the vendor?
As for 10% being the norm in WA, well, I’ve never paid 10% as the deposit yet, the smallest I’ve paid was $200, the vendor did accept the offer and had a sale so their time wasn’t wasted at all. (I did have pre-approval though, so perhaps that made a difference although they never saw it, I just verbally told the agent I had it).
Yes, wouldn’t it be nice if every state did things the way! Boring though, we;d all know what each other were talking about….
PK
Fortune Favours the Bold.
Hi Yack,
We do similar, except we don’t already have an agent managing the property, the property that is in my husbands name I manage so that’s why he pays me to do so. This property is also close enough for me to do the management of it. However, I do have an ABN (not GST registered though) and I do write him an invoice for the service.
Does your wife have an ABN, because if not then technically I think you should be withholding 48% of the payment and you’d need to send this to the ATO and then technically she should claim that half back when she does her tax. If she hasn’t got an ABN, it’s easy to apply for one from the ATO web site. Saves the hassle of withholding tax, also makes the cost more official, it’s on the books “so to speak” and not hidden within them.
Our other properties are further away and are either in my husbands name or joint names,so we have them managed but the distance is our argument for me only doing this one.
Julia, that’s an interesting stategy you pointed out and although it took a bit of thinking over I can see how it would work (if your workplace allows salary sacrifice for anything other than super that is). Glad you brought it up though, does us all good to think outside of the box and open our minds to other ideas.
PK
Fortune Favours the Bold.
Why not do both?
Having said that, I prefer property as I have some control over it. At least with a house, I can do improvements that add value, I can’t do this with shares.
Fortune Favours the Bold.
Thank you both, well put. Buying houses was easy but buying a block of flats is another learning curve all over again. Appreciate you replies, will do a lot more investigating before deciding on this one.
Thanks
PKFortune Favours the Bold.
OK, but why? Do the banks perceive the risk to be higher?
Fortune Favours the Bold.
Jealousy could also be part of the problem….
Fortune Favours the Bold.
Hi Phil,
Yes you can purcahse the agreements forms at the newsagency or alternatively, type it out yourself (bit time consuming). Yes, it’ll stand up in court as long as both parties have agreed and signed. You can even delete or add items as long as you don’t breach the Tenancy Act.
You can also purchase an information sheet called “Residentail Tenancies Act 1987 Information for Tenant”. I give this to the tenant at the same time as giving/sending them the lease to sign so that they know that I know their rights and hopefully won’t try and pull anything else over me.
Also read page 15 of the book “re-newing a lease”. If your tenant is staying then they don’t have to sign a new lease, it’s their choice. It then becomes a periodical tenancy rather than a fixed term tenancy.
Regards
PKFortune Favours the Bold.
Have you considered Rockingham, cheaper to get in the market and still close enough for you to manage yourself. Probaly not quite +ve geared but closer to +ve geared than what Mandurah would now be.
Fortune Favours the Bold.
Phil,
I didn’t realise you were also in Perth. You don’t need a solicitor. But go to the newsagent and buy a book called “The Landlord’s Handbook”, it’s under $20 (your looking for a blue covered book about A4 in size). Not all newsagents stock it, but quite a few do, so shop around, if you can’t find it then ring The Dept of Consumer and Employment Protection, they will post out but will charge you for the postage on top of the book. The book covers everything to meet WA laws from leases, to lodging your bonds, property condition reports, to breaches, to lodging documents with the courts and even “abandoned goods”. It covers the lot, you can’t go wrong if you read this.
Regards
PKFortune Favours the Bold.
Jake,
Check out the ABS site for median prices, population figues etc, they have a free section. I don’t find it user friendly, but if you persist you can find information out about areas you might be considering.
Regards
PKFortune Favours the Bold.
Hi there Lino,
Our first IP was purchased in Mandurah (in Coodanup, down near where the estury and the river meet) and just had it revalued and it’s gone up 30% in 20 months, so we’re happy even though it’s -ve geared (we bought before we read the book and cottoned onto the ideas, but it’s done us well anyway).
Our only gripe is trying to get tradesmen when you need them, their either “tired or retired”!
Regards
PKFortune Favours the Bold.
Hi Phil,
Well, most here are against managing themselves, however we do manage one of ours ourselves and haven’t had a problem. We gave the tenant our mobile number only though and not the home phone number in case problems did arise in the future, at least we could turn the mobile off in there were to call in the middle of the night on a vindictive streak. Never happened yet, but that’s our peace of mind. Also, due to the expense of mobiel phone calls they only ring when there is a genuine porblem.
The other thing we did was a “To Let Only” contact with an agent so they did the proper checks etc of the tenant and then we took over afterwards. Tenant has a deposit book for our account so we don’t need to collect it, just check it’s in. The agent who did the “To Let Only” lease did advise that if ever we changed our mind, he’d happily take it on, so we have that to fall back on if needed too.
We have never “got friendly” with our tenant. If they ring with a problem we get a tradesperson out to fix it straightaway, so that there hasn’t been time for a relationship to occur. The relationship is strictly tenant/landlord.
Our other properties are managed and future one well all be managed as we do have limited time. However, I like to have a hand in somewhere, it keeps me realilsitic about what is necessary and what can be expected when you are paying someone else.
I rekon, give it a go but keep on OK terms with the current PM in case you need them later. No sense in burning your bridges.
Well, looking back over everyone else’s comments I can see I’m a minority here, but well, you asked for opinions so there’s mine.
Regards
PurpleKissFortune Favours the Bold.
The question I’d be asking myself is “Are they dieing and therefore the population decreasing (meaning vacancies are likely to occur) or are there enough new retirees entering the town to keep the population stable?”
Fortune Favours the Bold.
IF YOU HAVE TIME, Manage your IP’s yourself. You don’t even have to choose the tenants ie: you can do a “To Lease Only” contract with an agent so they can find and check out your prospective tenants properly for you and then you do the rest.
I give the tenants an option of a deposit book to pay directly into my account or they can set up a periodical payment. I don’t have to even collect the rent, they put it straight in the bank.
If you have to evict someone, you can then pay a property manager to do the court paperwork etc or you can do it yourself too. I’ve found the general collection of rent and inspections take minimal time, as does ringing for the odd plumber etc. when needed.
For those in WA who want to consider this, there’s a handbook at the newsagencies called “The Landlord’s Handbook”. It was only $9.95 when I bought a copy a couple of years back and it’s saved me about $700 last year alone.
(Note: Only do this if you can keep the emotion out of looking at your home, other people might not live like you do and just becasue it’s untidy doesn’t mean it’s unclean or that it’s not be looked after.)
Fortune Favours the Bold.
And how do you find our vacancy rates for country towns?
Fortune Favours the Bold.
Thanks will check it out. I’ve picked up rental forms there before but haven’t tried this type of form. Will have a look see.
Fortune Favours the Bold.
Phil,
Your might want to ask the Employment and Consumer Protection Dept, as I think wraps are illegal in WA unless you have a credit providers licence. Not saying you can’t wrap in other states, but you might want to check out the legalities of doing it in WA.
Purple Kiss
Fortune Favours the Bold.
Perth…well, Gidgegannup (Gidge Where? Yes, heard it before). We’re 10-15 mins out of Midland, another one in the hills.
Fortune Favours the Bold.
