Forum Replies Created
Make sure that you don't get carried away with the hype and excitement of an auction, don't allow yourself to be pressured by the real estate agents. I generally don't open the bidding and I don't place a bid until the bidding slows down a little bit. Don't appear too enthusiastic as the agents use this enthusiasm to push you further than you may want to go. As Scott said, make sure you stick to what you think the property is worth. If you are not the successful bidder, try not to be too disappointed, there are lots of properties out there.
Good luck
Sonya
Hi Sarah
A few more questions you ,may like to investigate: What opportunities for employment are there in Sunbury? What is the current rental demand in the area? have you spoken with the local council to ascertain whether there is any planned infrastructure in the area that may impact on the local economy and/or the exact location of your proposed property? What is the commute time to Melbourne?
Another proto consider is that a brand new property will allow for a better depreciation schedule than buying an older building.
cheers
Sonya
Hi drive a mazda mpv that is ten years old with 200,000. Want to upgrade, its not running very well at the moment and the mechanic said it will probably be expensive to fix. Maybe after my third IP settles next month. cheers sonya
hi i am not sure about this, however i am just in the process of refinancing loans and bankwest has asked for the insurance papers to reflect that they are the source of finance for the property. I haven't even changed the loans over yet and was surprised to see this as a prerequisite for the finance. Although I am more than happy to have this information on the policy I would have thought that this should or could be doen once the loans are actually transferred.
cheers
Sonya
Are you planning on relocating to Perth permanently? If not, perhaps you could rent in Perth as well as renting out your country house. What would be ther ental return on your existing home? Would it cover your mortgage and/or line of credit commitments? If you are not intending to stay in Perth this may be your best option, especially once you factor in all the extra costs associated with buying and selling homes such as legal and agents fees, searches etc.
cheers
Sonya
If you have evidence that the rental is this far below market value then you may be able to increase the rent by this much. However, as stated above, you may be at risk of losing a tenant. It may also be worthwhile to inquire from both your real estate property manager as well as other property managers in the area what the current vacancy rates are. If you do put the rent up by this amount and the tenant moves out, how long is the property likely to remain vacant?
Andy, have you thought about buying a PPOR and having your brother live with you and pay you rent? This way you would be eligible for the First home owners grant which you would not be entitled to if you bought an investment property. And depending on the type of property you bought you could, if you wanted to, rent another room to another tenant and then have them also contribute to your mortgage. if buying in Melbourne you would then be able to redraw on this equity to buy other properties. I have two investment properties and am in the process of settling on another property all of which are in regional areas. The capital gain is not what you will achieve in a major city, however, the fact that they are cashflow positive allows me to purchase more properties.
Sonya
Bergy, Have you investigated getting a variation on your tax. if you can show that you have a certain loss over the financial year you may be able to claim a variation and pay less tax each pay period. this would free up some money to put towards your PPOR. It would mean that you don't get a lump sum tax return at the end of the financial year, however you may have more money in your pocket week to week.
sonya
Thanks for that Richard, I will keep that in mind as I continue to search for CF+ properties
cheers
Sonya
It would seem to me that you have dug yourself a huge hole. How were you planning to finance these loans if both you and your husband were not working? Why go so 'big' to begin with? Smaller loans are obviously easier to service as well as being easier properties to rent.
Did you pay anything towards the mortgage repayments in the six month period of missed payments, or did you just let the loan payments accrue? All of these factors are things that any lending institution will look at. Unfortunately, the way you have managed (or mismanaged) things means that you have made it very difficult for yourself and i don't think any financial institution will lend to you especially in the current financial climate.
Terry and/or Richard,
Do you know of any lenders that will lend on multi unit purchases? I have found a number of unit blocks that are cashflow positive, (Some with very good cashflows that would more than cover all loan, rates and insurance costs with money left over), however, the banks won't lend on these properties or if they will want a forty to fifty percent deposit.
Any thoughts or suggestions would be greatly appreciated
thanks
Sonya
hi,
Ditto toFS' comment above. i have found both Neil Jenman and Margaret Lomas have good books and helpful advice. They approach investing from a slightly different approach, so reading these author's books will provide a balanced viewpoint as well as inform you on strategies and pitfalls to avoid. they don't tend to offer over the top promises or unrealistic purchasing time frames. If you are looking to attain cashflow positive properties i have found that my properties in larger rural areas provide a positive cashflow without having huge loans and/or deposits. good luck!!
Sonya
HI i guess it would depend on whether you can do the work yourself, therefore not having to factor in labour costs. Also if you cupboard carcasses are in good condition and you only need to replace the bench tops and cupboard doors it is probably doable. Bunnings have what looks to be a reasonably good quality white vacuum sealed door
Goodluck, hope to see your end results posted on the site
cheers
sonya
Nicklee88
Am I correct in assuming the $1,000 was materials only, or did you have some professional help laying the laminate and/or floor tiles?
looks great
cheers
sonya
hi, i have four policies with GIO. i recently made claim after my tenant set fire to my kitchen and caused smoke damage to the whole house. i was on holidays when i received the call drom my PM. i called GIO they assessed the property within a week and approved the repairs, actually going with the more expensive quote to ensure that the ceiling was not just painted but replaced. From start to finish it took less than three weeks for quotes, assessment, approval for repairs and repairs completed and paid for. i was very happy with the service that i received.
cheers
sonya
hi
off street secure parking is usually a value add on properties, especially in inner city areas with limitted parking. be sure to keep the design in the same style as the existing building so it doesn't look like a dodgy addition.
cheers
sonya
one other thing, arrange to have the rent from the melbourne property paid into your offset account and only pay the minimum amount of repayment onto that loan when it becomes due.
sonya
Hi
as i understand it you can use an offset account with fixed interest rate loans as well as variable. i would have the offset account set up against the loan for your new PPOR so that the largest benefit is in reducing the interest on this loan, as said previously any interest on this loan is not tax deductible. Also i assume this will be the larger of the two loans so it makes sense to reduce this as much as possible. also if you are a disciplined person, use a credit card to pay for everything then pay this off in full once a month, you can set up your banking to do this automatically. this means that the maximum amount of money stays in your offset account. if however, you are not a disciplined saver/spender then this is not such a good option.
cheers
sonya
Hi Phlang,
previous growth that is so high may be an indicator that growth may stagnate or go backwards, especially with the economic slowdown reducing the demand for resources, therefore mining cutbacks. Also if there is a lot of land being released this generelly means that existing house prices go down, or again, stagnate. When there is a shortage of land property prices increase because the land is what is appreciates in value not the building.
if you are looking to spend $400k on investment property you may be better off buying two or three cheaper properties as you then spread the risk across more properties. if you only ahve one property and it is vacant for four or six weeks then you receive no income over this time, whereas if you have two or three properties and one is vacant at least the other property/ies will still be bringing in some income. Alos properties at the cheaper end of the rental market are easier to rent than higher priced properties. This does not mean you cannot get quality tenants either. You can still get very good tenants at this lower end of the market.
hope this helps, again it is only my opinion, but this is the info that seems to come through from all the real estate books that i have read as well as my own personal experience of owning five investment properties.
cheers
sonya
i would work from top to bottom, so that if there are any mishaps with paint or scratching of the floors when installing the new kitchen cupboards you are not ruining your new floors. Also if you have not had any experience polishing floors i would get them done professionally. if you can, ask if you can see their work, to be sure that they deliver a good quality finish. if they are truly professional they should have previous clients who are happy to show you the finsihed product.
good luck
sonya
