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the way I would look at it is like this.
the new townhouse would probably rent similar to the house you own now yeah? so your going from losing money to making money. if you are looking for income this would be the go.
There fact the developer can give you a house lowers his cost base and makes the deal more likely to go ahead. if he were to buy your land, it may not be as profitable for him, and harder to get finance and the deal may not be worth it.if you were to sell, how much money would you have? if you are looking for growth, maybe it is better to take this money and use it as a deposit to buy 2 houses which would be slightly positively geared i would think.
So it all depends. having a place fully owned would also allow you to service another loan, however if you still owe money on where you live, its not the best tax wise. but still, your getting 350 a week plus you can depreciate the new house….
i have met with Pino from capital360 and he seemed very good. they're not just a buyers agency,, they help you manage it as well. I didnt end up using them as there is another group a lot cheaper in melb. I will probably use the cheaper one for the first 2-3 houses then shift to capital when my portfolio is starting to get large.
property planning australia and capital 360 are companies like this and there are plenty more. they help you set up the structure, get the loan, find the property they negotiate for you, and they help you along the way evaluating your portfolio.
The dont buy new property so there is no commisions paid to developers. they charge a flat fee to find a property. its generally between 8-10k per property. that involves all the due diligence and negotiations etc.
some of them even guarantee that they will purchase the property below market value. they work for you, not for the seller.
Property planning australia focus on educating you about the whole process as well, they even offer a course at vic uni about property investing.
They will even help you organise a reno, some, like alliance corp, specialise in this.
I have talked to them all and am currently using PPA to get my finance and structure set up (no charge as they act like a broker), and will find my own property.
Worth looking into if you don't have time to look at hundreds of propertys but still want to invest in residential property.(for the record, i dont work for any of these companies, i have just investigated them as i was planning on using them and still probably will inthe future)
well there is a unit in the same block renovated a few years ago asking 260pw so i would think similar or slightly more.
i would be hoping that would mean it would be worth at least 260-280k.I agree, this has been very helpful. Powerpoints is one thing I hadnt though of at all but is a very important part of a home as even I remember looking for powerpoints when I bought our place.
Is it easy to get rid of damp? Being a structural engineering (a young one tho) I should be able to get advice on how to do it at work ,but generally we don't know how much it will cost.
There is a brick wall just out of the photo's which would be the party wall to the next unit.
two of the other unit owners have also done recent reno's so we may look at doing something externally to the whole block if we can get majority vote for the BC.Thanks very much for all the info guys!! Really appreciate it!
Thanks Guys,
I have some leftover paint from when I painted the spare room in our house (however it's currently stored on concrete, i better get it off the floor tonight. Is this to do with the concrete being cold?)
Thanks for the idea's guys, I really appreciate it!
I've lived in a one bedroom unit before so i have a good idea what works and what is easy to use. A breakfast bar is exactly what I had in mind, with wall cupboards above the benchs.
Sink will be going, I hate those old industrial sinks and it will look out of place with everything else. I will be looking to get stainless appliances, I will definately use good quality paint as I am saving on labour and want to make the job easy for myself.
I will def fix the ceiling and instal a stainless range hood.
I like the idea of fixed stools, stops the carpet getting ruined by bar stools being moved round all the time. Iwill be replacing floor coverings, they are all knackered.
I will get tradies to do most of the work, Iwill just do painting and the easy stuff. While it would be nice to save on cost, i'd rather just get it done quickly.
Here are some more pics. its quite possible the old man died in there?? Now you'll see what I mean by the plaster, but when I inspect it sat I'll be able to make a better judgment.
Keep any idea's coming guys! It's all taken on board and very much appreciated!!!!Hi jason,
These properties are really good. How much would you generally spend on a renovation?
I'm looking to do something similar,
render, paint, floors, light fittings and maybe a second hand kitchen and some bathroom updates. I'm trying to work out how much I will need.
Does the area your renovating in make a huge difference on the cost of the improvements?
Any advice and more info on these projects would be greatly appreciated!
Cheers mate,
HaydnAnd if you really believed it you’d be selling your houses and buying gold coins??
WJ Hooker wrote:Sorry,
Just had to post this.
http://www.moneymorning.com.au/20100608/house-prices-at-maximum-risk.html#more-3296
Always a good read is the moneymorning post.devo76
Canada is not in dire financial troubles, it is like Australia in many ways, both have high housing costs, both are reliant on mining, both have hots of space with nothing ( ours is hot desert, their's is cold desert ).
Oh OK you mean like America sorry. OK go along with that first bit.You now assume they will recover……..maybe in 20 years or 15 if they are lucky.
Your guess is reasonable and makes sense if all plays out as in the past, but I myself think Australian Properties will fall by 20 -30% over the next few years. But it's my guess so has no possibility of happening….L.O.L.
America etc prices will recover if the economies recover, but I think that the world will slowly start to realise that we do not need a Mc Mansion to live in and be happy, and we will ( Australia included ) start to buy smaller and more modern and environmentaly friendly housing, So will need less land and hopefully mean less housing costs, less money from wages so we have more money for living. You know less electricity, water, gas, pollution etc etc.. But hopefully, not more and more flats..
It's time we decided Mc Mansions are too expensive to build, to look after, and are wasting to many resources of which less and less are available to us…. You know peak oil, wars over clean water theats etc…mate that’s like saying people will realize they don’t need Louis vuitton suits and Chanel jewellery…a big house in hawthorn is a status symbol, not a living requirement. And people will always be vain. And how do you propose lower density living in the inner suburbs without more units??? There will be more apartments and townhouse but I will be a long time before Aussies don’t want a large house. I’m just out of uni and 95% of people I finished uni with and my mates from high school want modern 3-4 bedroom houses with all the mod cons! I want one but I’m smart enough to know that u can’t start at the top, plus there was no way I was gunna do a hour commute just for a backyard.
As for kris sayce,well I subscribe to his asi newsletter and I think he knows his stuff on shares, however property wise I don’t think he really knows. He just bags property when he has nothing better to write about to try and getore people buying shares, most likely the ones he recommends, hence pushing up their price.
me an the missus bought out first PPOR with a 100% LOAN in feb 2009 got it revalued last week, achieved 30% growth, withdrawing 75k to buy another one as soon as i find something decent. will prob look at cashflow positive for the next one (maybe strata titleing a block of units) as dont wanna get stuck with 2 growth properties costing me $$ each month and reducing my borrowing capacity.
im not saying there wont be a slow down or possibly (but unlikely) a small reversal as people become spooked, all i'm saying is that in 10-20 years, a 20k drop after you bought a property isnt going to make a big difference in the scheme of things.
its like holding off on buying a speculative stock at 5c to try and get it for 4.8c, your still making plenty if you sell for 20c.
haha dont think so mate!
tighter credit hey, i just got a 75k LOC on this property approved (up to 90%) and also a 95% loan pre-approved for another property….and both myself and my partner earn less than the average wage …read some of the comments after than last article….if you excluded sydneys inner suburns like they excluded manhatten the figures would be much different….month on month who cares about auction clearance rates. you guys need to start looking at the bigger picture.
property in australia is still affordable. its just that young people expect to be able to start their life in a equivelant house to their parents, who have been working for 30 years….and the media will write whatever they can to sell papers…who wants to read that property has doubled every ten years for the last 100 years….that wouldnt sell papers now would it…..
Fact Update:
Bought, 2 bedroom apartment in hawthorn, Mid April 2009, $375 000
Revalued: End May 2010, $485 00013.5 month growth 29.33% – Wasn't it meant to drop 20-40%???
id say you'd be looking around springvale/blackburn east that sort of distance from the cbd mate…
And I don’t think u’d be renting a house in Richmond for $350… entry level duplex is easily over 500pw. 350 would just get u a ok two bedder!
im only new and i dont know much about how much babies cost, but wouldnt you first change your investment property to interest only, then use the extra cash you were using to pay the principal on that to put into the offset account on your PPOR. pay down your PPOR as much as you can before the baby comes and then chuck some of your savings off the loan, refinance it and that would reduce your minimum repayment. keep maybe 20k in the offset for emergencies. that way u get to keep both properties, and generate more cashflow?
Silver will give u much higher percentage returns in the short term, silver is being used much quicker than it is being mined. It won’t be all that long before there is a huge jump in the silver price. Just check out the gold- silve price ratio and see what it’s average has been over time. Problem is you are then stuck with only 150k appreciating. That same 150k could get u 2 400k places that might cost you 150 a week to hold.
So say 800k at 8% = approx 63k p.a growth. So silver would need to appreciate at approx 40% pa over the next 12 months to beat property.
I would probably be buyin property with your cash, however maybe a smsf full of silver might be a good idea, as silver is going to go up, just when is a bit unpredictable.
Anyways, my opinion only! Cheers, let us know what u end up choosing mateWhy? The first place is returning 10%, the other 7%. Between them they should be cash flow neutral after all costs, so why not keep them and buy something else and get the growth from all 3?
There's a 2 bedroom furnished apartment in a 3 story apartment block in melb on the same st as a uni, buy 280k, rent 400pw (over 20k pa). (7.2%) they're 2 years old so there would be plenty of depreciation as well.
I'm not sure if it's soley student only living but they are pretty small apartments so in the end only students live there.I'm only new to property investing but i'm going to nitpick markh3084. Student accomodation is still leased on 12 month contracts, doesnt matter whether they live there all year or not.
Now chances are the students who would live in it would be international students with mommy and daddy paying the rent each month, who are unlikely to damage it like some local students would.
I'm unsure about the capital growth propsects of this apartment as you only have one buyer group, this being investors. As it's not a studio in a big tower, what do you guys think? I've heard of apartment buildings body corporates getting student only covenants taken off and the prices nearly doubling. Has any one heard about this before? Has anyone owned student only accomodation? The uni is spending lots of money on new buildings to take more students and also is not in the cbd, so there is not loads and loads of student accomodation about like there is around melb uni.
Any thoughts would be appreciated. Cheers
Thanks a lot guys. Nah unimproved value was 39k, improved value was 100 and i coulda picked it up for about 70. Most houses in the street are worth about 150k max of 180 and rent for 200 so building a new place, even a bond transportable home would not quite work.
It’s a town of 15000 people that is growing. I have mates there who are plaster, carpet, electrician, glazier and carpetner. I am also a structural engineer so doing the footings is no issue.
The original plan was to buy for 70, spend 50, reval at 150 and rent out for 200 return of approx 8.5%. However when my pop looked at it for me (cuz I live in melb now) he said it needed a bit more thAn the realestate agent said.
So I woulda needed to buy it for 50k if the renos were gunna cost 70k to get 8.5%.
With the week off, I would organize the stumping, wiring and plastering to be done before I got there, then work from sat one weekend till Sunday the next. Know plenty of people who could help and my bro could also help out during the week.in the end I didn’t end up going for it. Missus was a bit scared of doing something this big as a first project. And as you guys all said, you can plan and plan and plan but it’s
still likely to blow out time and costwise!
Cheers for the advise guys!! Appreciate itHi Rob,
Can I ask why you say stay away from Detroit? I was actually talking to a company (I'm happy with their reputation) about buying in detroit earlier tonight. I have read articles on the net about detroit going backways population wise and there being a lot of empty houses, however 30% yield is pretty good, and these guys have any renovations required and the houses rented withing 6 weeks as they have an aussie over there managing the 3 US agents they have working. It is wefindhouses that I'm talking about.
So yeah, any information on why to stay away from Detroit would be greatly appreciated!
Cheers
