Forum Replies Created
We just installed one in our PPOR. Now I have one, I love it. Cost around $1200 in SA.
Not sure I’d install one in an IP though. They do tend to break down alot and are expensive to repair. Remote controls cost around $70 to replace.
You will always miss 100% of the shots you don’t take!
Originally posted by Celivia:Funny, Ronulas and Munjy!
Why do people think tat Nats12’s initial offer was low balling? Low balling is when you significantly offer below the fair market value. I don’t think that Nats12 has done that.
Honestly, how many people here are really usually making just ONE offer on a property- their best offer?
If it had happened to me, I think I would have, as Roy suggested, had a civilised [axe]talk [argue]to the agent to hear his side, clear the air, and then move on asap- [party]
Hakuna Matata.Celivia
This will be my last post on the subject…. I only feel that it was lowball compared to what Nat thought the property was worth. Nat was prepared to pay $265K and only offerd $246K. Nats idea of fair market price was obviously what they were prepared to pay, not what the place actually sold for.
You will always miss 100% of the shots you don’t take!
Originally posted by munjy:LOL thanks Ron,
But I’m really referring to the original posts by NAT12.
1.It was her initial bid.
2.At 5k less than someone else’s it was not a low ball.
3.She was not given a 5 second phone call to give another offer. The vendor is NOT waiting for days for another buyer/offer.
4.There is no need for further house inspections – she is already placing an offer.If you were willing to accept $5k less than what you got, you would have been happy with NAT12’s original offer!!!!
Munjy
Sorry to disagree with you Munjy,
I was refering to NAT’s original post aswell.
In fact, compared to what Nat said they were willing to pay, $265K I believe, then $246K is low ball. Nat did not know what the final price was so her inital offer was very low ball. The fact that it was 5K less then the other bid is irrelevent. The vender obviously reached their asking price and was motivated enough to accept.
As I said in previous post, Nat should have made her best offer.
The asking price was 240K+. In my opinion most people want about $10,000 more than what they are starting at. Offering $4K more than the starting price is fairly low especially if you are willing to pay $265K for the property.
We don’t know how long the vendor has been receiving offers. And for all we know people may have still been asking for inspections.
When, as the seller do you say enough is enough?
You will always miss 100% of the shots you don’t take!
Originally posted by munjy:Honestly, I think it’s great that so many people have different views. I can *almost* feel my mind broadening!
For the people who feel that NAT12 should have offered a higher price, or, that it’s understandable/forgivable that a REA shuns other buyers for a quick sale, how would they feel if they were the vendor who NAT12 approached with a higher offer?
Would you still be so understanding of the REA? Would you still feel that the buyer in front of you deserved to miss out on the property, and you on the extra $10k?
Couldn’t describe how I’d feel without swearing.
Great thread!
Munjy
Hi Munjy,
Ok I will put myself in the seat of the vendor as you suggest.
1. Every day I don’t sell this house is extra house payments that I’m making for nothing.[angry2]
2. Every day I don’t sell this house is another day that I can’t buy the other house I have my eye on.[hmm]
3. Every day I don’t sell this house is one more day of stress waiting for a buyer to make a decent offer.[evil5]
4. Every day I don’t sell this house is one more day I’m paying advertising costs to Real Estate Agent.[grrr]
5. Every day I don’t sell this house is one more day I have to have my house open for more inspections.[jealous]
To tell you the truth If I was in the seat of the vendor I would get quite annoyed and insulted at low ball offers for my house and wish that people would stop wasting my time.
If, later I was rung by the person who offered me the low ball price and they told me that they would have paid me more if the real estate agent had of given me the chance, I would tell them that hindsight is great but how was I to know what your final price would be.
I would then tell them that I was happy with the price I received, other wise I would not have accepted the offer.
I would then tell them that it was they who missed out on a great house for a great price and that the loss was theirs not mine.
And if I was real cheeky I might tell them that I would have accepted $5000 less than what I got….[biggrin]
You will always miss 100% of the shots you don’t take!
Hi Nat,
I’m going to ruffle a few feathers here and take the opposite point of view.
A house is only worth what someone is prepared to pay for it. You were prepared to pay more but the market said it was worth less. You saved yourself some dollars for the next deal.
The problem as I see it is this. Both parties are trying to save/make as much as they can. No prob with that except that if you thought the property was worth more you should have offered more. Instead, because you wanted to save a few thousand and hope the vendor is idiot enough to let you have it you missed out. So by trying to keep a few extra $ in your pocket you lost out on what you think is a good deal.
I don’t like agents either, don’t get me wrong, but you may have had 3 or 4 other bidders higher than you. If I was an agent I would be going straight to the ones offering the serious money, not dilly dallying with low ball offers just in case they are willing to pay more.
If you had of offered what you were willing to pay and then lost the deal anyway then so be it. You could walk away knowing you would not have paid more anyway. Now you have a sour tast in your mouth because you know a deal has gone past and you didn’t even get a second chance to put in your best offer. I don’t think that is the agents fault I think it’s yours. If a vendor wanted an auction they would have paid for one. I’m not saying that you should pay what they want but make a legitamite offer based on the value you give the property.
Anyway, I would not worry too much about it. The fact that someone was willing to pay less than you means that you overvalued the property in the first place.[blush2]
The last deal I put together I started the whole low ball offer thing and realised the agent knew exactly what I was doing anyway. So after I made my initial offer which even I knew was ridiculous, I cut straight to the chase and told the agent my best offer and told them why. The only extra I added was a furfy about me having another offer in on another house and that the first to accept got my money.
A deal has to be good for both parties or someone comes out a loser. No reason both parties can’t come out happy.
The only reason I can see to make real low ball offer is if you think the vendor is motivated for some reason. Then you might get a much lower price than a place is worth.
OK everyone can shoot me down now as an agent lover…[eh]
You will always miss 100% of the shots you don’t take!
Hi elysean,
Thanks for your comments although you have me at a bit of a loss. What are you refering to?
My PPOR is P&I
My IP1 is P&I only because we only owe $19000
My IP2 is IOYes all my wages and rents ect go into the LOC.
What point are you trying to make.
You will always miss 100% of the shots you don’t take!
Thanks DD,
IP1 only has $19,000 owing so not worth going IO.
IP2 is already IO and cost $122500.
Rent is already $170pw which is as much as you’ll get in the area, no matter what reno you do short of 4th br which is not practicle.
Has dishwasher,aircon, double shed, entertainment area ect.
Sell the kids… Tried that but could not get a good enough return on investment[guilty]
We do have 1 car to many but we got that at a bargain and will never get a car like it for same price. It’s a Tarago. We own the other outright.
You know, the more I talk to you guy’s about it the more I realise we are not doing too bad. We are broke most of the time, but boy have we achieved alot in just a couple of years. On a single income (average) , 4 kids ect.
I think some of the previous ideas were right. We must be patient….. and let the mirical of capital gains do its work. Wait a few years, sell up and re-invest into better houses.
You will always miss 100% of the shots you don’t take!
Thanks Hmackay for your encouragement,
Sometimes you get so focused on what you have not achieved yet you forget what you have achieved already.
Feels good to know we are not the only ones making sacrifices for a better future. Sometimes when your dead broke but have $400 000 dollers worth of property you wonder what the hell you are doing.[blink]
As for selling/renting the PPOR….. The decision to buy our house was my wifes. I wanted to buy two more cheap IP’s…. she wanted a house of her own. Guess who won!!!
I have mentioned we might be better of renting and selling/renting our PPOR but she has fallen in love with the place and I think its out of the question.[blush2]
We may be able to draw down some equity as we paid a fairly large chunk off initially but we don’t have enough income to service the debt. Thus the idea of wife going back to work.
Thanks again
You will always miss 100% of the shots you don’t take!
This leads me to ask you guy’s another question.
Who here sinks the rent from properties back into the same property or puts the money into an account for emergency/repairs?
We personally live of the income from our houses and when the bills come along just pay them as we can.
You will always miss 100% of the shots you don’t take!
Hi Yack,
Yes time can do the work I suppose. But how do the people who feature in API do it. They buy several properties in a couple of months and some of them are not on huge incomes? Where do they come up with the money for the repayments? I know the rent covers alot of it but in most cases not all of it.
As for why sell a good performing property? To free up some cashflow. Sure over the whole year it actually makes about $2000 after expences but because we are living off the rent when the costs come up it kills us. Especially when you multiply that by 3 properties. Perhaps we don’t have it structured right, or perhaps we have overextended ourselves, I’m not sure but some weeks I am not sure of we can cover all the payments ect. Also because the house is profitable then I lose money from Familly Assistance and get taxed on my income as I do not have the property in a structure.
You will always miss 100% of the shots you don’t take!
Thanks for comments guys,
Yes selling IP1 did cross my mind. However because the LOC is set up against this property there would not be much left to re-invest and I would be losing the cashflow from this positive property.
After saying that however, I have decided to sell when the climate warms up a bit and the gardens/lawns start to bloom. Gives the place a nicer feel and perhaps loosens the prospective buyers wallet [biggrin]
IP1 has been a great investment for me. Only cost $32500 and has been rented constantly for years with very little expence. Current tennant has been there for nearly 4 yrs.
Sometimes you have to divide to multiply though.[cap]
While this property has been a great cashcow, with the monthly repayments/rates/insurance and now the LOC interest repayments its starting to drag me down. That one good investment has helped me buy two other places though.
Redwing: No my loans are not crossed, except as I mentioned, the LOC against IP1. If I sell, then Loan and LOC will be paid out with a little to spare. You are right about letting time do its work. It’s just frustrating seeing some good deals go by simply because I don’t have the money. [comp] Guess everybody has that problem though.
You will always miss 100% of the shots you don’t take!
Well Neo,
I have some equity from the properties, as I paid less than valuation ect but cashflow wise I have buggerall left. I’m flat out paying down my current bad debts as it is.
Thanks for your reply.
You will always miss 100% of the shots you don’t take!
Obviously everyone has thier own comfort zones with these things but here is my opinion.
Imagine this new IP you are considering the purchase of sounds fantastic. The figures work well, the pictures look great. All the inspections are favourable.
But…
The house next door has several burnt out wrecks in the front yard.[blink] The lawn is touching the top of the fence [comp]and there is a huge german shepard that loves to run up and down the fence line barking at anything that moves, including its own shadow[grrr].
Would you want to rent next to that?
Some people might, but do you really want to limit the potential renting capacity of your IP?
Street appeal, neighbours ect are an important part of you due diligence. Not everyone has the same standard of living conditions that you do so don’t assume anything.
The only way of determining these things if you do not have friends or familly in the area is to visit personally.
Remember: The agent does not work for you and has no requirement to advise you of these things.
This is probably a major investment for you financially, you could save yourself thousands for the sake of a lousy few hundrend dollar plane fair.
My 2c worth
You will always miss 100% of the shots you don’t take!
I thought you were going to talk about the new article in API. The heading is “AUSTRALIAS CHEAPEST SUBURBS”
By the way, I invest in one of the suburbs mentioned so I’m all smiles[biggrin][biggrin][biggrin][grad][specool]
If you want that sort of info just subscribe to API.
You will always miss 100% of the shots you don’t take!
Sorry I messed up the quoting in my last post. [biggrin]
You will always miss 100% of the shots you don’t take!
Originally posted by OSienna:Originally posted by Ronulas:Secondly, regardless of what the stats say, where I invest very few own their own homes so stats are meaningless. The reality of the situation is that there are large pockets of people can not afford to get into the market and therefor must rent.
Just because very few people own their own homes in these areas, does not mean that there is an oversupply of rental properties. Just the opposite. There are too many people and good rental properties are scarce. Rental yields are high. As I said from the begining. Supply and demand dictate rental yields.
If you invest in areas where “very few own their own homes” then doesn’t that mean there is likely more competition between rental properties? Would that not serve to keep rent prices down? Sounds like it’s all swings and rounabouts to me.
You will always miss 100% of the shots you don’t take!
Originally posted by OSienna:Originally posted by Ronulas:An exodus of investers means a glut of homes on the market.This reduces prices which allows homeowners back into the market which then causes rental properties to be scarce again. Causing high rents. Supply and demand.
Oh, and I forgot to add that foundation has already countered that point with the following:
Originally posted by Ronulas:
And conversely a lower demand, as those houses are now homes to ex-renters.Once again, if the flood of dditional ‘investors’ didn’t have an impact on rents, why would an exodus?
It would be nice if we could all make an effort to read what others have posted before repeating the same argument.
Firstly,
I was not repeating his argument, just adding my own opinion to it.
An exodus of investors does not change the supply and demand issue. If investers sell up then homeowners buy them. Either way the demand for rentals does not alter much as most people in some areas of the population can not afford buy.
Secondly, regardless of what the stats say, where I invest very few own their own homes so stats are meaningless. The reality of the situation is that there are large pockets of people can not afford to get into the market and therefor must rent.
You will always miss 100% of the shots you don’t take!
Hi Jacqui,
For most newbie investers, stats don’t mean much and are expensive and then where do you get them from?
I suggest look at it from a practicle point of view. What sort of market do you want to invest in? eg low income or blue coller?
Decide that, then apply some reasoning. Low income – what are they looking for? Public transport, shopping close by, schools. They won’t be looking for nice street appeal, good roads, manicured front lawns or private shcools.
You can get into the whole stats and history thing which, don’t get me wrong, has its place. But when you are starting out the best thing to do is get a feel for the population either by visiting or internet. Target your market which narrows your field of vision and do the figures. If they work, go for it. Experience is the best teacher.[biggrin]
You will always miss 100% of the shots you don’t take!
I believe if you do your research and you have not invested at all then any time is a good time.
If you are too concerned with :The right time” then you may just wait too long and miss the boat.
Invest for long term and if prices drop then just hold on and eventually things will correct themselves.
Just don’t overextend yourself in case things do drop.
Your first investment can be the most important one as it will either exhilerate you or scare you to death. So be carefull but don’t get anaylasis paralysis.
good luck
You will always miss 100% of the shots you don’t take!
There will always be more renters than home owners. Thus the rental demand will always be there.
An exodus of investers means a glut of homes on the market.This reduces prices which allows homeowners back into the market which then causes rental properties to be scarce again. Causing high rents. Supply and demand.
Let’s go back to the basics of asset value. Why is an asset worth something? For anything to have a monetary value, it needs to satisfy two conditions
Serve a purpose, i.e. someone wants it – continued demand;
Has scarcity, i.e. there is not enough for everyone – limited supply.However, not everything with a demand has a monetary value, e.g. the air we breath – there is no scarcity of it. Conversely not everything that is scarce is worth something either. For example, used shoes – as there is no continued demand for it.
For an asset to appreciate in value, we need continued demand and limited supply, simultaneously.
You will always miss 100% of the shots you don’t take!
