Forum Replies Created
- If you lose the ‘Duplicate’, you’ll need to jump through quite a few hoops, including signing a stat dec. signed by a JP and resubmit to the Titles Office with a fee.
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I must admit some of the older ‘Duplicates’ on A3 or so parchment look really snazzy, especially with all of the fancy handwriting and the history of previous owners, but really, the best place for it is to be fully paid off, and then remortgaged to the hilt and sitting in the banks vault.At least until you want the certificate released and then find out that the bank has lost it and you can’t settle on time!! GRRRRR! That took a trip to the banking ombudsman to sort out.
Originally posted by elbows:Have you bought positively geared property recently quigles?
Yes, in upper New York State, since you ask. It’s not an easy market. Friends of mine have, in the last two months, bought positive cashflow properties in Karratha and Kalgoorlie, one got a steal in Western Sydney and I put up a property for sale with over 7% returns just recently. You can PM me about that. I only mention these because you seem convinced that the deals aren’t there.
The following should be confirmed with a lawyer.
1. You can’t get the easement off the title without the agreement of the beneficiary of the easement, and it doesn’t sound like that will happen any time soon.
2. You are entitled to have one, two or 127 gates, providing that the specific terms of the easement do not prevent this.
3. You can’t lock the gates so as to prevent access/egress and you probably can’t force your neighbour to close the gate.
As a result, you need to put your thinking cap on to come out with a win/win result. Or maybe you don’t need to have a gate? Just a thought.
Sorry to hear you say that, elbows. Sitting on your …er, hands… will not get you any exercise, especially mental exercise, the most valuable kind.
WHY aren’t you going out and looking for deals you can make into +CF? Or investing in Kalgoorlie? Or Karratha?
Obviously your money and your call – but ask what you could be doing with your funds that’s better than nothing, and at least do that!
Be careful in jumping down Lisa’s throat before you’ve read the message clearly. In my lexicon, ROI is NET return (i.e. if sh’e picking 30 to 40% gross returns) then a net return, given the expenses over there, of 15 to 20% (before income tax and interest) isn’t too shabby.
Of course,that also depends on the condition of the property, the actual ability to collect rent and the level of costs factored in.
Originally posted by kay henry:A Subaru Impreza RX is my current car- I love it
Unpretentious and yet, so smooth. First car was a Hillman Hunter- awww.Dunno why people want to spend hundreds of k’s on a house and drive around in a car that makes them look like a hillbilly, though. I thought investing in RE is supposed to make our lifestyles better?
In my case it’s because the cars that mean enough to me for me to want them are so uneconomical as to make them a low priority. A slick Porsche or a Corvette would be fun, but they are real liabilities. You couldn’t park them in the street, insurance would be a hassle etc. Just not worth it at present from my point of view.
I am considering upgrading my pushbike, however.
Dazzling, my reading of the question was about structure rather than total numbers of properties that a person should own, in whatever capacity.
I think most property savvy accountants these days would answer “None in either name”. You put +CF properties into a discretionary trust, and get both asset protection and tax advantages, you put -CF properties into a hybrid trust for neg gearing advantages and asset protection and future tax advantages when the property becomes +CF. Whether you keep your PPOR in your own name or rent it from a trust is a moot point.
NB. In Victoria the proposed land tax changes may make a small difference.
Ferry one son to hockey, send other son off to an all day frisbee (er, sorry “Ultimate Disc”) competition. Pick up hockey son and friend, take them to a live theatre show. Walk some dogs for a friend. Come home, more son’s friends, help wife cook muffins and Anzacs for the kids. Watch a video with her then put her to bed (still afternoon). Cook dinner, feed kids and wife and settle down to do a bit of financial analysis. Ashes in the background and the Poms are in trouble.
Sunday – early morning run, then play cashflow with younger son in the morning, cook the week’s meals in the afternoon while watching the motor racing and head out for dinner in the evening to celebrate wife’s birthday (a bit ahead of time).
Same ol’ same ol’. And I wouldn’t trade it.
given that you have the REA valuation and the valuer’s valuation, if the REA refuses to agree to his own valuation you may have cause for action against the valuer. This should be politely pointed out to the head of the valuation firm. In the mean time, don’t change the offer you were going to make, but think of reasons for the land agent why your offer is justified – start with “The valuation gave me comfort, but I’m not relying on it”.
We were a two car family – a 91 laser TX3, $5000 in 2003, and a 94 Ford ($13000 in about ’97) station wagon which we use to transport families, tools, you name it. I just wrapped the laser around a tree, total write-off and I’m back on the buses and the pushbike, depending on the weather. I’ll think about another car another time.
This doesn’t count my son’s 79 Corona, very driveable altho no power steering, which he was essentially given.
OK elbows, let’s do some numbers first.
Assume all up it costs you $5000 in taxes, fees, stamp duty etc to close so you pay $120,000. Assume also that you have the house occupied 48 weeks a year (8% vacancy, I’m being cautious on your behalf) and finally assume that you’ll lose 20% of your rent in maintenance, land tax, agent’s fees and similar costs. You take out an interest only loan at 7% = $8400 and your net income is $6144, leaving a deficit of $2256 p.a.
Lets assume you can get depreciation allowance of $2000 so you lose (in the ATO’s eyes) $4256 leading to tax deduction (assuming 30% income tax bracket) of $1278 p.a. Now, what you have to do is use your brain to turn this property which has cost you zippo in your money from something that loses you less than $20 per week to something that gains you the dough. Maybe a roll-a-door would cost you $1500 but be worth an extra $10 per week? Installing broadband or FoxTV?
Or maybe you can make a deal to buy a few of them for a discount – you’d need a $14,000 discount on the above figures to break even – that’d be a bit of an ask. If you have your own cash, 14,000 (on teh above figures which are really rough) is your breakeven point.
Keep thinking.
As for recent examples of cashflow positive, I hear that Kalgoorlie, and Karratha in WA are good at the moment. I don’t invest in such places and nothing in this post should be taken as recommendation. But you should seriously consider talking to people about potential DEALS. Finally, is that $115 the selling price or the ASKING price?
This thread is pressing a few of my buttons.
Let’s get down to basics – I think two important questions are being raised here:
1) Is the message in the books mentioned (and others by implication) valid?
2) Are the stories in the books cold fact, romanticised recollections or parables? And does it matter?
For the first, I would have to say that there are only two books on investment that I have read that I was unable to take anything concrete away from, and even one of those at least had a point worth considering in looking at the broader issues. Both of these books were Australian, ironically enough.
For the second, if you want to find out what’s real and what’s not, look up the site belonging to a US commentator named John T Reed. He will point out truths, half truths, evasions, gossip, discrediting facts and other material about nearly everyone who’s ever published anything on investment, especially real estate, in the US. And after you’ve wasted an hour or so on his site, you’ll find that there is no mention of the “Ah hah!” moment you might have had when reading Rich Dad, Poor Dad or any of a hundred other books.
It doesn’t matter if the examples are real, as long as the message has value for you. You don’t want to do the same deals as these guys – many of them bankrupted themselves (RK twice, from memory). You want the messages about context, about walking before you run, about making the profit when you buy, about good and bad debt etc.
If you mistake the window dressing for the message, then you need to reassess your thinking. It’s when the message makes you uncomfortable (even if the attached story is cute) that the alarm bells should go on.
Know why you’re doing what you’re doing
This doesn’t contradict the advice above about starting, by the way.
When we renovated some flats, we figured that we could reliably increase the rent by a minimum of $5 per week. That equated to $250 per year, allowing for vacancies which was enough at 6.5% interest to afford a breakeven budget of $4000 ($4000 * 6.5% = $250 approx). We also were after a slightly better class of tenant.
As it happened, the rents went up $55 per week (the agent recommend an extra $65 per week, she ws that gobsmacked by the job we’d done) [biggrin] which meant a payout period of under 2 years, plus better tenants.
We didn’t know what the result would be, but we knew why we were doing it and the achievement of the goal was way in excess of our aim.
I’ve met the reno kings and Geoff was a long time and very useful contributor on another forum.
I’ve also met one of the people featured in the book. Like Michael says, she’s real, but not typical.
So good on you for asking the question, but the answer is, based on a small sample that yes, tehy are real.
My 18 year old is at home and pays rent. He’s also on a compulsory savings program (6% of gross salary into super at work and 10% of gross salary invested with us) while he saves a deposit for his first IP. He works in a job for 20 hours a week and has 3/4 of a full time load at uni.
We’re content to go down that path for a while – we see him as being financially free well before 40 all out of his own funding. If he wants to move out, he’ll have to find his own place/space. In the meantime, while he has more cash than he’s ever seen in his life, we’re teaching him to exercise priorities.
You’re being pressured.
Time to apply some in reverse. Note to the vendor that the cracks concern you as does the roff (and it should, it may be structural – read Steve’s advice about building inspections).
If the rest of the deal makes sense, consider offering subject to a satisfactory building inspection – if it fails the inspection, deal off and deposit refunded.
Set yourself a reasonable amount of time for the inspection and find a reputable inspector.
I agree with wake about the ceiling – get it inspected AS WELL AS having the vendor fix it (again to a professional standard). The few hundred dollars one or two inspections will cost are well worth it.
Wrapping is a business, rather than passive income. It can generate a lot of cashflow but requires effort and dedication, plus appropriate market conditions.
All real estate transactions involve a lot of money. A good lawyer and a good accountant are essential team members.
Allow me to take a different tack to the essentially geographic responses you have had. The CF+ deals are in your head, which is were your maximum leverage exists. Subdivisions, new uses for old properties, developments, wraps (or in SA lease options) – the list is endless. don’t look foor properties on a platter, that went out with the 90’s. Look for properties where you can improve something to make them CF+.
As with all gurus, there’s a bit of picking and choosing that needs to be done.
It’s partly a case of “horses for courses” – you need a specialist in what interests YOU – and partly a case of caveat emptor. Not everything is as, it may seem – not suggesting misrepresentation, just possibly mismatched expectations.
Good thread, nonetheless – I LOVE a good accountant.
Just to be safe, you’d better let your tenant know if you are not registered for GST, otherwise they may be illegally claiming an input credit from the ATO.
Unpretentious and yet, so smooth. First car was a Hillman Hunter- awww.
