Forum Replies Created
A bit sensitive there Resi!!!
Who cares……… really!
Hi Resi,
Well, he did ask for people’s opinions………..
What’s your NET worth resi……..[biggrin][biggrin]
don’t worry only joking
WauloK,
Mate you can only rent out a place to somebody at what the market will pay not at what you think you need as a return![biggrin]
Hasn’t the market (in most areas) changed to a buyers market? I see a lot of sites DA approved up for sale now-a-days. Duplexes etc up my way are languishing on the market for what seems for ever with multiple agents “for sale” signs out the front which are soon followed with “for lease” signs.
Sorry to rain on your parade but maybe it’s your lucky day if this project doesn’t get off the ground! Think very carefully about it.The reality books for us arm chair property investors! No developing, wraps, paint and punts, renos for profit, on-sells etc, etc just simple buy and hold! Yeah, sure she takes the fun out of it but she’s all about promoting sustainable and bullet-proof property investing.
Her books don’t feed the greed factor like so many other writers try to invoke.[biggrin]I’m working on the get rich slow method. I equate getting rich quick to getting poor quick and a lot higher risk in my books. I have a pretty crappy SANF anyway and prefer the KISS principle myself. I just buy in the bad / stagnant times and hold forever i.e the Jan Sommers method.
Bit of a no brainer that has worked for me so far.
IMHO, I would break it into 20 % cash deposits on quality IP’s.
Aim for properties that after dep etc are cashflow neutral or mix it up a bit and try to achieve an overall cashflow neutral position.
Try and keep some cash in an offset account (against one of the Ips) to tackle some of the unforseens etc.
Sit back, enjoy the ride!.Unfortunately my inheritance ($600k) was used to flick the ex![angry2][angry2][angry2]but what I said above is what I would have done.
Hi Mono,
What if their sell price to get out goes real low or yields for the area are trending up or its prior to a price movement? Would you be interested then?
Changing market conditions can certainly make someone else’s “dogs†look a whole lot better.
[biggrin][biggrin][biggrin]WOW!!!
I gotta start thinking outside my little square a bit more!!!Hi Monopoly,
I guess you’re right most people don’t like hearing the truth and prefer others to just agree with them.
Oh well, these deals will probably be the bargains we buy at a later date when they’re finally discarded.
[biggrin]Hi Tracey,
My accountant bought one of these homes and made quite a lot of money. This deal was done a few years ago though and the boom helped him considerably with his profits (he did sell after the builders lease expired).
As stated before check market rent for the area. It might be considerably lower than expected. My accountant solved his problem by selling into a hot market and taking his profits. Today you might be stuck with it for some time.
Hi All,
IMHO I think we are seeing the development of a new class of investor. The new newbies. This class is the late, late entrant to the property market who has decided to finally give it a go especially at a time when the more seasoned investor is consolidating his holdings and looking towards other investments to provide better returns.
I think a lot of new newbies should present their deals on forums like this a lot more often. More seasoned investors could pick it to bits and demonstrate to these people how good/bad their intended investment is, especially considering the current market. I don’t mean the “welcome to the club†type responses but the more analytical dissection of the possible deal.
Hi Bonnie,
Lesson one
Never believe the selling agent!!!!!!!………It’s all about supply and demand. Check to see if there are a lot of vacancies in the area your IP is located.
If your IP is fairly typical for the area and there is an oversupply you will just have to wait in line until you have a taker unless you take control and work on the PM to get your place rented above the others.
I have had this problem in the past and have approached a number of agents and told them that the first to rent it out gets the management. Bingo, instant tenant (and a good one too, he’s still there!).And here’s the trick Matt you’ll be faced with, working towards NOT losing it through poor investments!
Tread carefully at this time in the current RE market.
Like the last boom Yack those who went in too late and too hard were burnt the most.
I suspect this time around it will be no different…….
Hi Spanky,
If something meets the 11 sec rule TODAY after one of the biggest booms we’ve seen I would regard that as a sure sign to stay away from it!!!
Try this rule of thumb Paulusi,
1) Every 10 years property doubles (A good –ve geared property should at the very least!)
2) Work out your NET holding costs over this period (estimate of course. Can’t predict interest rates etc).
3) Subtract 2) from 1)Do you see a healthy profit? I would hope so! Don’t loose sight of the big picture when you negative gear!!!
Some thoughts from another forum on this topic:
1) Furnished attracts a more itinerant tenant.
2) Some doubt about the quality of tenants who cannot even accumulate furniture etc seeking furnished accommodation.
3) Furnished makes it easier for the tenant to do a runner.
4) Lack of care / faster replacement of furniture which doesn’t belong to the tenant.Although with depreciation etc it might still be very worthwhile.
Not only a $25k loss but just think of the real opportunity cost of this “investment†over the last 3 years!!!!![confused2]
Hi iwsctws,
Last boom everybody was thinking exactly the same as you. Many sold up their places in Sydney to pursue the good life in Qld. Most returned back to Sydney because they couldn’t find the high paying jobs they once had in Sydney.
Another chap I know who’s an agent said to me that Sydney people with cash in hand move to Qld with removalist trucks following closely behind only to return to Sydney with the clothes on their back 2 years later (supposedly selling everything to get back into the Sydney market!!!).
