Hi Steve,

Another awesome conference. Thanks so much for your generosity providing a great night at the gala dinner on Saturday night. It was great to be part of the video and hope the team remain safe and well in Florida. The three days were energising and cant wait to get started with STEPS. I met some great people to add to my network and have already started to put in place some changes from the information provided by the speakers who were all sensational. Can’t believe its only 9 months till the next years conference. Can’t wait!

Honestly, and many may disagree as they have had success, but most experts I follow suggest avoiding buying off the plan like the plague! I would never ever do it myself!  Here are some reasons I'd avoid it;

1) No one has a crystal ball, so what you buy for today bares no reflection of the value tomorrow, It could be less if there is more supply than demand

2) Generally OTP are unit in large complexes. One should avoid large complexes as your unit is like a commodity, there are many of them to choose from when you need to sell making it harder to sell for the price you'd like (plenty of stories about the GC and Docklands)

3) Mostly developers sell at inflated prices based on the fact its a new unit, it looks great, it has all the mod cons that you would want, pool, lift, gym, nice common areas, sounds great hey, then they throw in the guaranteed rental return or offer to pay the stamp duty. This is just designed to woo you in. Its all in the price and some!

4) Generally if an expert is selling you a property of the plan run for the hills as all they are an expert n is lining their pockets instead of yours!

5) If you are still thinking about buying off the plan re read the above again!

I could go on, but there are far better and less risky ways to invest in property than buying off the plan. The fact you are at the web site means you have a plethora of methods to consider depending on your preference for passive or active investing. Buying off the plan would be passive, if that is your preference, consider researching to find a hot spot and use a buy and hold strategy and repeat once you can afford to.

As always seek professional advice suitable for your own circumstances.

Cheers

Simon

Below are some thought I have. I have been investing in property for 20 years on any off and have used buy & hold. CF+, renovations to add more value than costs, completed a remote and locla renovations, relocated a house and completed a subdivision. Next I'd like to do a duplex or multi dwellgn site where I can make enought profit to retain one for income.

My first developement was a hands on relocatable house where we purchased the land, relocated the home and rennovated. It was something I always wanted to do, and it was fruitful in adding equity and we still hold that house three years later and value can still be added in the desiign in the right market in the future.

Where I am at now is delveloping to add value without relying on the market to rise. I think that works in any market. I purchased a house sometime ago on a corner block where the rear yard had a street frontage. After my due dilligence, among other things I knew it could be subdivided. We held the place for five years and have only just finsihed the subdivision only having started that last year.

To give you an idea the value of the house on the larger block was approx 320k, The cost of the subdivsion was $40k. I choose to outsource the project management as it was the first one I have done, and to be honest that was about 20% of the costs, and meant I completed it much quicker then me doing all the liaising as I also work full time in a busy corporate environment.

The block is currently on the market for 140k and the house on the reduced block is now worth approx 270k. I am looking to onsell the block to a developer who should be able to get at least a15-20% return. So roughly its a 50k equity gain, but I should realise 100k in cash, and based on discussion with my accountant, there is no CGT when we worked out the cost base. I run a trust structure so I could distribute the cash in a tax effective way if I needed to, so structure is something you must get advise on before you buy a block etc.

If I find the right market I could possible churn out a few of these scenarions where I buy something I could do similar to, perhaps get the subdivision done while reovating the house to be sold for a small gain to cover my subdivision costs. Then I could either sell the block, develop it, get a line of credit against it to do another deal while continuing to holding it if I thought it may increase if value in the short term. Depending on zoning and size I might even be able to build multiple dwellings.As you can see there are a few options.

Until you get a couple under your belt I would strongly advise doing something small and simple without risking too much capital.

Its more about learning when you start. My first foray was a 75k town house with a buy and hold strategy in the early 90's in another state, as when I lived in Sydney its was three times as much then and I did not feel comfortable with that exposure

Cheers
Simon

I use Westpac at the moment, and they do it, but they seem to have the same issue as ANZ with people not knowing their jobs. If you find a good bank with a good contact hold on to em! I am yet to find that but I have head good reports about StGeorge.

I wont go into it but I do not recommend Westpac as their service has dropped of considerable. I will admit my investing structure is complex, but it is a worry when the one of the big four consistently screw up my loan applications causing me untold pain ans stress.

If anyone can recommend good institutions to deal with that care I am all ears!

I am not sure of the numbers in the areas nor much about the infrastructure, rental demand and capital growth performance, in the past, and whats predicted for the future. I would suugest you compare to Ipswich and see how it stacks up. There is a lot going on in Ipswich if you talk to a lot of locals and the real estate agents. It also depend on what you investment strategy is as to what may suit you best.

Cheers
Simon

Hi Nathan

I am an ex-Sydney sider havinf relocated to Bribane at the start of 2007. Still own property there, and keep a constant eye on the markert.

I beleive the overall maket is showing signs of recovery, but is at the early stages. Some data is suggesting the action clearance rate has risen slightly and the average time a property is on the market for a private treaty sale is reduicing, allbeit, only slighlty. To me this said there is fair value in the market for investors to acquire IP's, but you still need to research the areas

Affordablility does tend to make me laugh. Most people stating this are simply not prepared to live in certain areas. The medium price across Sydney may still be 500k, there are plenty of house to buy well under that if you look and you are a first home buyer. You have to start somewhere, and I think the tendancy for most youget people is the want the 40s square home as their first home, so claim Sydney is too expensive and move to Perth or Brisbane.

I think Sydney will always be the yardstick on the property market and be the one to watch in regard to overall trends. There are pockets that are going off, and the area areas that are still reducing if vendors are listing at unrealsitic prices. That is fact if you look around and talk to agents and other investors.

Cheers
Simon

Hi lilyhutch

I personaly believe it can prove to be a good investment, as well as resulting in a shorter development time once you have you council approval in place.

With the relocation of the home, there are less steps in seeing the house actually on the land compared to building  from the ground up. However, its a case by case scenario if it is cheaper. You'll know that when you put your costs together the whole project with some contingency in there to ensure that strategy is going to prove a good investment. 

There are a number of good sources for relocatable homes. I have done a fair bit of reseach on this over the last 9 months as I am in the process of subdividing a block and doing exactly this in North Ipswich, but its only at early stages. I have a DA and I am now looking at the actually subdivision process vs. dual occupany. (the DA was already on the block when I bought the existing home)

Below are some sites I have found useful on the subject. I am actually seeking a house that needs as little work as possibe, as once I am ready to to relocate, there is minimal renos and it just a matter of connecting the service, plus other DA requirements and then having council approve for residency.
 
If you want to chat further on this topic I'd be happy do so. If you like send me a private email with some contact details and I'll give you a bell. Always good to network with someone looking to do the same. I find you can never know too much on these things!

Cheers
Simon

http://www.dalbyremovalhomes.com.au/
http://www.drakehomes.com.au/
http://www.eddywrighthouseremovers.com.au/
http://www.jonkerhouseremovals.com.au/
http://www.houseremovals.com.au/
http://www.wrightbros.com.au/

Hi Sarah

Great that you are able to move back in with your parents.

You did not mention whether this loan was secured by anything i.e. a car, boat, something tangable. If you are really keen to get into the property market I can see you may want to keep additing to that 7k. I have some suggestions you might be able to consider.

If not and you are happy to wait, It would really think is would make sense to concerntrate on knocking off as much of the PL as you can as fast as you can. You are on a good wicket earning that kind of money, so take advantage of being at home while perhaps only paying minimal board.

That 7k, while nice to have as security would be better off working hard against your loan. You can get about 6% at call in some cash management accounts, but to hazzard a guess you are probably paying significanltly more in interest for the loan??

Keep reading the book, and if you can grab a copy of the second is worth a read too. I found both book invaluable in creating my investment plan. I use to think the only way to make money out of property was negative gearing! What a fool!

If you don’t want to publish all the details on the forum, I’d be happy to share some of my ideas so PM me and I will elaborate on what I have done in the past with a few of my loans. I have a friend who is a broker and he has imparted a fair bit of knowledge my way. It may just give you some ideas where you can then head off with to get some professional advise which is a must.

While there is a heluva lot of knowledge on the forum always seek professional advise when you think you have decided what you are going to do. I have come up with what I thought were great ideas only to find out there were clangers!

Live and learn as they say, you never stop learning

Cheers
Simon C

Grant

I have to say I am not fan of off the plan properties at all. This is just me as I think there is more potential for issues can arise.

The Perth market as you know is going gang busters. Realistically its not going to continue at that pace forever.

Look and compare what has happend in some other market. Not so long ago Sydney was flying and took a correct where median values when down roughly about 10% across the board

Here are a couple of things you may want to ask yourself about the Perth market.

1) What growth do you expect over the next two years?
2) What is the real value of the property you are considering buying?
3) How will a delay in completion effect your investment?
4) Have you factored the current inflationary effects in the market place (e.g. what if rates are 1% higher when you settle?)
5) If you have to put down a deposit, where else could you invest this now to get into the current market.

I think there is still probably an opportunity to get a good return over the the next 12-24 month if you can buy at fair value. I suspect some people are paying inflated prices to get into the market or into an area they want to live or invest in. Again its choice.

Only you can decided, but I personally steer away from of the plan properties. I like to see what I am buying rather then what it may look like.

When the marker softens there is likely to be opportunity to pick up properties at a discount as developers simply want to move on to the next project. Probably some time off in the west, but have seem evidence if that in the Sydney market for some time

Good luck with it.

Cheers
Simon C