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Buying through the investors club or any other organization similar is often a good way to start out or to implement a lazy method of investing (just keep buying from them when you can and let it slowly accumulate).
The big question you need to pose is “what do they look for” then you can find these investments on your own and work much faster and much better with a lot more knowledge about what you are actually buying.
If you’re just starting out and going alone, keep attending the meetings just to talk to fellow investors afterwards, read some books (heck just borrow them from the library to begin with) and naturally find sites like this one to discuss or read about investing. Feel free to spend 6 months doing this. It’s 6 months lost investment time but it could be 6 months well spent if you get off to a smart and educated start.
As above, there are thousands of variables and sub-cycles within smaller areas but generally the national boom starts when good houses start reaching prices that the majority of people can afford, they move out of lesser houses and into these, starting the boom for that housing market, then appartment owners start buying the lesser houses and when they all become too expensive, renters start buying appartments. Within all of this, investors click to the boom and start jumping the band wagon, shooting the prices even higher, until the majority of people are maxed out on loans and everything else is too expensive for them to buy. It sits around for 7-10 years until people have paid down some loans, have enough equity in their homes and the prices start looking good compared to everything else. They it begins again as they all buy further up market once again.
In the end, it’s all driven by supply and demand no matter where you look. The key is spotting something thats going to create a low supply and/or a high demand in any particular area. no matter what the national cycle.
The national cycle is for the lazy investors who just want to sit back and buy houses in the major cities one after the other. It’ll make you a profit and it’s safe but you can do better if you know what your doing and know where to find the diamonds in the rough, outside the cities.
Get Landlord’s Insurance. Its an extra cost but well worth it ESPECIALLY when your still just starting out and a single property in your portfolio going to bad tennants can affect you badly.
Go it alone. Times change, people change and you can’t sell properties as easily as shares. BUT maybe he’ll still give you “mates rates” if you help him operate his own investment portfolio, separate from your own. (not sure of legalities here).
ADVICE: start slowly, simply and safely unless your already know what your doing (or have a mentor). Attend every free investor meeting you can (investors club, etc) and visit sites like this one regularly (basically immerse yourself in the investors world). When possible, get a mentor (someone who’s already successful and can give you advice). And return the favor by mentoring someone else one day.
The other thing to consider is getting a loan for the trust or company. Lets say you earn $50k a year and your wife earns $100k a year (sucking up to my own wife with that). This means that the bank see’s YOU as Mr. $50k man, your WIFE as Mrs. $100k woman and the two of you (jointly) as Mr & Mrs. $150k.
If you start up a trust or a company then it sees this as totally seperate from you and/or your wife. With no properties, etc, the bank will see it as $0.00 Pty Ltd which can make it difficult to get a loan.
Once you have Properties, you may wish to start up a trust or company and transfer ownership from you and/or your wife’s name/s to the trust/company and after a while the bank will see the trust as earning an income (I presume it would have an income since you mentioned wanting positive cash-flow). The other one to remember is that if you and the Mrs buy a property that earns $50k a year (just an example), then after a while the bank will see you as Mr & Mrs. $200k / year. Why transfer to a trust or company you ask? As said by others above, it can simplify your accounting and allow you to move quicker once you have a number of properties already.
You can convince the bank (sometimes) that the trust/company also has your income and that its all OK but its a lot of hassle thats not worth it.
Summary: your just starting out so KEEP IT SIMPLE and get more complex after you have more experience.
Charles Wilkinson
“Average people boast about their earnings while rich people boast about their worth – Charles Wilkinson”Set the time and place and the people will come. Few at first but many more will follow as agendas and results are posted to this site together with future meeting times.
Just get the ball rolling with the first meeting and It’ll have a snowball affect.
Charles Wilkinson
How much did it increase your Property value? Sounds like most of it was repairs.
I guess the end result is if you focus and commit yourself to investing with a passion then you should do just as well as any athlete who does the same for their sport.
There are your weekend rugby players who practice for a couple of hours each weekend and have a game each weekend as well. Then you have the professionals who slug it out in training or the gym for 10 hours a day.
There are weekend investors who just buy a few houses here and there with rose coloured glasses. Then there are real investors who attend all the training courses, read all the books and financial reviews while constantly hunting the markets for the next deal.
The other benefits you usually get with a H&L package are warranties on the house (often 5 years or more builders warranty on the structure and 6 months on fixtures and fittings). The only other mob, besides Ozinvest that I know of are Kaizen Property Sales. Both are pretty decent in their dealings with investors and usually give you a good deal (surprising to hear it’s prices 30k over existing houses).
“Concept Invest”
“Capital Concepts”
“Whats Your Worth”
“Smart Investment Strategies”
“Value Enhancers”
“Investment Enhancers”
“Enhanced Investment Concepts”
“Investment Accelerators”
“Capital Growth Concepts”
“Speedy Capital”Name the time and place. I’m in ASCOT
One thing I’ve learnt is that the more investment meetings you attend, the more chat rooms you use and the more fellow investors you surround yourself with, etc. The more knowledgable you become.
You can succeed or become an expert at almost anything simply by ’emersing yourself in the world’.
Computer nerds are good because they talk to other computer guys and attend computer conferences, etc in regards to their field. Carpenters are good because their surrounded by other tradesmen and its the one thing they all have in common to talk about. But if either one stopped, their knowledge would quickly dwindle or become outdated.
Anyone looking at investing, I HIGHLY recommend you go to every free meeting you can attend and spend as much time as you can in sites like this. You’ll pick up tid bits all the time, refresh existing knowledge or gain new knowledge. The rules are changing all the time and you need to stick with it to keep up.
Charles Wilkinson
Kaizen Concepts Pty LtdProbably the understanding of capital growth compared to cash flow.
The average person boasts about what they earn, the rich man boasts about what he’s worth.
Once you can get your head around it, its easy to understand the benefit of sacrificing your cash flow for the sake of investment in assets (such as property).
Stay strong and just remember that even it it takes you ’till the age of 60 before you have enough assets to retire wealthy. At least you could retire wealthy unlike the vast majority.
For the sake of pleasing tennants, just put in 100W globes to keep it bright and maybe some down-lights near the darker areas. Simple but it works and is a really cheap way to make any place seem more appealing to inspecting tennants when its just that little too dark (I’ve got a bathroom with no windows, and although 100W is overkill for such a small area, it works wonders. Great Idea for the often dark, laundy area as well).
As for adding value, I tend to think the wood finish will leave you more value but as Wylie suggested, ask the estate agents. I tend to think the best way to add value is to simply fix the things that need fixing while trying to keep the whole affect, fairly neutral and leaving everything else, as is (unless it’s REALLY ugly like bad wall-art or something).
The best place for any excess cash to go is not into existing investment homes but buying the next one.
After checking out the BCC site above (THANKS TO STUART MILNE) you basically get a $500 rebate for a tank holding 1,000 litres or more and $750 for 3,000 litres or more, plus $100 if it’s hooked up to the internal pipes (toilet and washing machine).
After asking around, the 1,000 tank will probably cost more than $6,000 by the time you buy the tank, buy a pump and have it all delivered and installed. A licensed plumber needs to hook it up to the internal pipes.
As an investor, I probably won’t get the value return in my property for a tank and if council makes it a requirement on all new buildings in the future then housing costs will all go up and so will the value of my property, even without one (a reminder that the worst house amongst the best, will always gain a better percentage of capital gain, so why try and make it as good or better unless it needs it?). So unless you want to save the environment or your council has a much better rebate don’t bother unless it’s required by them.
Another tid bit to add is that you pay for the house and land package in stages of the build. The bank usually takes care of all of this. There are something like 6 stages (not certain on this):
1 buy land
2 slab poured
3 frame
4 lockup
5 fixtures & fittings
6 handoverFind out when each stage is due to complete and the rough amount you will pay at each point. Unless you have a different loan to the basic variable, you should only have to pay interest per month on what has been handed over to the builders up to that point. The first portion you pay usually includes your entire deposit.
Not sure what your getting but if it’s one level, brick with tiles then you’re looking at 5-6 months build. I’m buying a 4 bdr h&l package from a company called Kaizen property sales but there are other great mobs in Brisbane like Ozinvest, etc. I couldn’t neg the price down but the bank has valued it $10k more than the purchase price anyway, and I’ve heard it’s a common result with H&L packs at this time of year.
G’day back,
To give you an Idea of what you’re paying to what you get. I’m paying a total of $170k for a brand new 4 bedroom, brick home with tiles in Brisbane. However if your house is 2 levels or in dificult terrain to build on then that can add to the cost. It’s probably more difficult to add on to an existing house than to simply start from scratch as well. My house is also off an existing plan by engineers who may have thought ahead with materials to save on cost.
To judge the cost/benefit ratio, simply look at the prices of houses in your investment’s area which have a similar structure (number of bedrooms, materials and condition) to the one you hope to build and that should give you a rough idea of how much value you’ll add onto it’s existing worth.
Lets say you have a $100k house and you owe the bank $90k. You then pay the bank $10k so you now own $20k of your house while the bank owns $80k. If you Refinance then you are borrowing BACK off the bank, the $20k that you own in the house. So if you refinance $5k then you will own $15k and the bank will own $85k.
You can indeed refinance to get the deposit for another house. EG you own $20k the bank owns $80k. you refinance $10k and borrow another $90k to buy the new house. you now owe $90k for the old house and $90k for the new house ($180 in total) but you still hold $20k between them ($10k in the first house and $10k in the new).
