Forum Replies Created
Hi Rob,
Make sure you check out realtor.com, and search for the area of interest.
The post-foreclosure (short sale) is an interesting option.
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Opusca1,
In the early days is was P&I on the basis of 20% down.
Today, I tend to be involved with more development projects where it is interest only, and the interest is capitalised into the loan balance.
I'm still a CA… proud of it (just not practising).
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Angiebabe…
Are you related to this site?
It just seems a bit odd that you would join today and then post this.
Is seems to me to be some seeding for something new.
For what it is worth, what I'd like to know are:
a. Are the original listing prices genuine? If so, are they independently verified, or is it up to the agents to input?
b. How much is paid for listing the property on the site?
c. Why are there so many google ads on the site? Makes it look a bit dodgy.
d. Who are the people behind the site? On the 'about us' site it doesn't mention names.This whole thing seems a little odd.
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
You won't find $1m in Property… in stores anymore as it is out of print.
You might get a copy on ebay.
Suggest you get the revised 0 to 130 which has just been released. Should be in bookstores from this week.
Also recommend you read:
* Rich Dad Poor Dad
* Richest Man In Babalyon
* You Can Do It
* Money Secrets Of The RichAll the best with your investing.
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
I've a couple of thoughts to add here:
a) 1 Br Apartments. These are the bottom of the market and hence are attractive to those seeking affordability. As such, they are likely to underperfom the median house price growth and rent. If you can, you are better off with a 2br second hand apartment than a new 1 br apartment.
b) How do you plan to make money from this investment? Growth, Income or Both? It is smarter to start with your profit and work backwards to your property, than to start with your property and work forwards to your profit.
c) You are right about the hidden costs. Be careful with body corporate, leasing charges, extras (pool, gym etc), carparks, noise (check construction for soundproofing), stairs / access (impacts rental if hard to move in and out – ground floors tend to rent for more unless there is a view).
d) Finance – make sure you shop around for a financier as some will not like apartments less than a certain size.
Food for thought. All the best,
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Bronte,
It's uncommon but not unusual to rent the property before settlement for the sake of getting early access.
Sometimes no payment is needed, just agreeing to take the property as it is now, and to pay for the rates etc. from now on, plus insure the property.
An experienced property solicitor will be able to help you.
All the best and congrats on the purchase.
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
I agree with other posts about needing the preliminaries sorted.
That said, you have a goal and if you lack the funds it is smart to invest with others. Make sure you have each role defined though, as if you are all doing the same thing then it will cause arguments.
Open communication among the partners is the most important requirement. Common goals and expectations are also critical. For example, be careful if one party contributes more time or money than others. This will be acceptable in the short term but will cause tension in the long term.
As for a structure, unless you are related a family trust will be out. Therefore, alternatives to explore are:
a) A unit trust (where the units are owned by the three parties)
b) A partnership of family trusts (each party has their own family trust)As has been said, best to see an accountant to discuss your specific needs and what fits best.
All the best,
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Okay… finally recovered from lots of hot crossed buns. Thanks for your patience.
Seems Qantas has jumped on the unemployment bandwagon. Interesting how these things build momentum… I wonder which major corporate will be next.
First up, please remember that my thoughts are just one of many opinions. You will need to take and leave what you feel makes sense.
1. Overvalued Property
By historical standards, based on times earnings, the property market in the US, UK and Australia appears overvalued against the long term trend. Certainly, prices in the US and UK have come off, but here in Australia we are yet to see a major fall.The major distinction economists believe is the reason for housing stability here are:
a. Government stimulus – in the form of the FHOG, savings accounts etc.
b. Housing shortageMy response to this, as I mentioned at the info night, is to avoid being a growth investor (as delivered by general market growth) as the downside of prices slipping is not worth the upside of potential price growth.
However, I remain a fan of positive cashflow investing, and for lump sum gains earned from developing and renovating property.
2. Yield
The purpose of the examples used is to show how the 1% rule works to quickly filter deals that might be positive cashflow from deals that are not. Deals that stack up need to be evaluated further to test the key assumptions.
Whether or not a return is 'good' depends on what other opportunities an investor has, as well as his/her skill or expertise.
Surely a 6% return (that will be +ve cashflow) is better than a negatively geared return in a low growth environment.
3. Sydney Property Prices
The death of Sydney property prices was proclaimed when the Carr government changed the land tax rules, and has failed to recover since. It was timed at the peak of the cycle, and by the time it was reversed, a new momentum had been established.
However, you simply can't argue that low interest rates fail to ignite the property market, as it is a question of if, rather than when.
Already yields are improving, however the problem now is being able to borrow money given credit has tightened.
I hope my answers have shed further light on some of the issues.
Thanks,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Happy Easter!
I am about to sign off for some family time, but will be sure to answer this post on the other side of Easter.
Regards,
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Reviving this post….
Although interest rates have fallen, clearly the gloom is placing pressure on property prices.
The near term prognosis remains gloomy, which is why I continue to recommend trading in and out, rather than buy and hold.
Just because something is cheap does not mean that it is good.
Cheers,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
The rules were stated when you joined up as a member.
If we allow an inch, people tend to take a mile.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Would this be State specific? I know there are state-by-state rules about the qualifications and experience needed to become a real estate agent.
Cheers,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
A great book that everyone should read is 'The Great Depression Ahead' by Harry S Dent.
It's a new release and is compelling reading.
The tea leaves of demographic analysis paint an interesting picture.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
The problem you have is that a change to the title usually attracts duties.
However, (I think) in WA and Vic you can transfer the property to your spouse's name for 'love and affection' (that is – $nil) without any stamp duty applicable.
Worth a phone call to your solicitor though to find out.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
It sounds like you are taking a pre-existing house and then renting it to students (by the room), as opposed to buying a 1-Br purpose built student accom dwelling.
As such, here are some points I recommend you work though:
1. Leasing: are you buying or renting? If you are renting the property then you will be sub-letting to tenants. That's fine, but you want to make sure your lease allows for this. If you are owning, then be aware that there will be quite a few logistical management issues with having 4,5 or 6 sep. tenants.
2. Bathroom: clearly the 1 Ba will be a problem – but only in terms of the appeal and function of the property. I don't know of any legal impairment that prevents you from renting because of only 1 bathroom.
3. Boarding house: check with your local council about what their rules about boarding houses, as with 5 tenants you may be pushing the boundaries. Just check in advance…
4. Tenants: students tend to be transitory – especially if they are from overseas. Therefore, you need to be sensitive to timing and vacancies around the start of the Uni year, holidays etc. Also, tenancies are likely to turn-over quicker as people move in and out. Therefore, your property's fixtures and fittings are likely to depreciate faster.
5. Bond – you will need to collect a bond off each tenant.
6. Harmony – given so many people are co-habitating a small space, you will need to create a good place to live. Given the lack of internal space, I would try to make good use of external areas and converting them into open living spaces that also offer some privacy.
I could go on, but instead send me a PM and I'll put you in touch with someone I know who has done really well from renting a house to tenants by the room.
Hope this has given you some new ideas.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hmmm….
I would demoish what I could and strip things back and then get the trades in to fit off.
Yes, with the kitchen, get the sparky in to junction box the mains to the stove, as it will be easier to do this with the old kitchen gone then trying to do it with a half-installed kitchen.
Hope all goes well,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Beware of the foreign controlled corporation rules, which you should ask your accountant about.
I invest in NZ and use a NZ family trust (not an LAQC).
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
I suggest anyone interested in US property should read:
The Great Depression Ahead – Harry S Dent (2009)
He makes many good points about the past, current and future real estate prospects in the US.
I'm reading it right now and I can't put it down!
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hmmmm.
Seems like there are many choices.
Melton should hold up well given the price of property and that there are so many 1st homebuyers.
With that in mind though, if you buy new and sell in 1 yrs time then you will be selling to 1st homebuyers, and therefore competing against spec builders. And that's my fear, there is a chance that spec buyers will discount further if the economy falters as they clip profit to maintain volume.
Furthermore, I wouldn't buy a home in a place I didn't want to live… period.
Do your numbers on the student accom… there are sometimes many and large management and ownerships costs (such as servicing, body corp etc).
My pref would be to buy in the area you want, and then to improve the property to maintain your capital so that when you sell, you can sell for more. That is, stay in Geelong and buy something you can improve to add more in perceived value than actual cost.
I hope this has given you some new ideas.
Warm regards,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi,
Interesting post… street appeal is something that you should consider, as the property needs to be appealing to the next purchaser to command a great price.
I would have though you would want to make the view a centerpiece to the living area, and that the house design should fold around it.
All the best,
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
