Interesting read.

I came across someone quoting this: The best time to invest was 10 years ago and the second best time to invest is now.

The rational I was given behind this quote is:

1. Interest rate will raise (probably will NOT skyrocket, but will raise overtime).
2. Because of the raise in interest, it will become increasingly more difficult for first home buyers to buy their first home, unless they want to turn into apartments, which may happen, but even then the raising interest rates will probably end up hurting first home buyers in that regard as well.
3. If they can’t buy, then they have to rent, which means the market is still an investors market rather than renters market
4. The stump duty allowance for first home buyers doesn’t look like it will help them in the long run either. It gives them more $$$ to buy, but that means they are getting bigger loans, which can be risky for them.
5. Increased interest rate means increased rent as well………

I have also find people like Robert Kyosaki now advocates people to become online entrepreneurs rather than property investors……

Hi there.

I agree that everybody’s strategy is different, so there is no “universal checklist” as such.

However, the idea I am getting at is for 1 person to use 1 “case study”. Yes, we are all aware that such a “case study” is specific to that person’s circumstances, but by listing out such a “case study” together with a check list of all the steps taken…. that way, young investors who are just starting out can see something that is “visual” and it is easier for them to have the information “sink into their brain” and then we can go from there..

If the checklist outlined fits into my strategy, then great, I can replicate such a process for my own.

Even if it is different to what I am looking for, that’s also great because it provided a “framework with some real data” rather than “generic advice”, as well as the tools used for each step (whether those tools used are free tools or paid services is a different story). So not only can I “adjust” or “twick” the framework according to my own circumstance, I also gained information on how to use some of the tools (which I may not be aware of before).

For example, the person providing the “case study” might have shown us a particular tool that he used to search for small units because that person is investing in an area where people are mostly single and not interested in getting married… but by just listing out such a tool, I can go to that tool website and apply my own filtering (such as I might be more interested in investing in properties are suits young couples rather than people who are not interested in getting married). Chances are I have never heard of such a tool before and by listing out the steps, I learn a new tool and I can play around with that tool myself.

—————————————————-

I make a promise here.

Next time I purchase an investment property, I will provide a concise step-by-step process on where I go from “looking for a property from all over Australia” to “finally nailed onto the particular property that I am looking for”. Unfortunately, at this stage, I don’t know when my next purchase will be, as I am still learning myself…. but I promise that once I do go out and make a purchase, I will compile such a process that I personally used.

I won’t write a huge essay that takes 2-3 hour to read, but I will list them down in bullet points and provide reasoning and rationals behind why I applied such a filter and why my process is ordered that way (ie: why a certain filter is applied at step 1 but not step 2, etc…), as well as for each step, which website did I go to in order to perform my research and any other tools I used. I expect such an “case study” to take no more than 5 minutes or so to read through, so it is not so detailed and long but enough for new investors to clap their hands and say “aha! So that’s what I am missing in my research”

I will provide such as check list whether my purchase is considered a “good purchase” or “bad purchase”. If it is a good purchase, then great, new investors can leverage my process and try out on their own… if it is a bad purchase, then that also provides an opportunities for feedback as others experienced investors can approach me and point out the flaws in my process and I can adjust it.

—————————————————-

To use another metaphor to explain my point. Think of in terms of IT. Companies such as Microsoft would publish some sort of “best practice guide” or something like that. But you will find lots of companies don’t always follow “best practice” because their specific situation is different and “best practice” isn’t always followed due to all sorts of reasons, ranging from political reasons to financial reasons to any reasons that you can imagine…

But companies such as Microsoft doesn’t stop publish “best practice guide” on the basis that “everybody’s IT is different and they implement their IT solutions differently to our guide”… instead, they keep publish the guide (and the guide has specific examples) year and year, release after release knowing that the guide may or may not be suitable for their customs specific circumstance…

As for other companies who need to make use of IT, they don’t have to “search blind on their own”, because they can leverage the guide published and make adjustments in accordance to their own unique IT environment, or they can even assess the difference between Best Practice guide circumstances vs their down and use the guide as a “benchmark” while developing their own IT practice.

• This reply was modified 7 years, 4 months ago by  Steven.

Hi Corey

Thanks for the suggestions.

Although rather than putting in <500K and listing over 19K properties, I was hoping for something more like “putting in <500K and be given a list of suburbs… then I will study those suburbs before looking at the individual properties within that suburb…”

Cheers
Steven

Hi Benny

I had another chance to speak to the agent that I have been speaking with. I specifically questioned them if they only do new property projects, in which case their answer is no. They deal with old properties too.

The exact wording I got from them is:

——————————- snip —————————–
we are very particular where our clients invest as we wanted to ensure their property investment portfolio has a good mix of investment properties that will generate cash flow positive income as well as capital growth. If our clients are in a position to do armchair development, we would then look at established or old properties so they could build two or three properties on this site (sometimes, retain the old property, renovate and then build another one at the back but this needs a lot of cash funding and usually over $1m by the time this project is completed).

Otherwise, your old properties have no more depreciation, paying full stamp duty. In addition, if you prefer not to develop or not to renovate and just rely on collecting rent, then the ongoing repairs or maintenance costs are not likely to generate good cash flow positive income and in fact, more likely to be negative cash flow which you are not able to pull out equity to “go again”.
——————————- snip —————————–

Essentially what they are saying is if I am financially that strong (they are talking about acquiring an old property and then construction 2-3 buildings to replace it, which adds up to a lot of cost), then they will look at old properties projects for me, but otherwise they think old property doesn’t sound like the right choice, given my financial situation.

While you are here, I have a question that may strike you as a silly question.

Are renovations for investment properties tax deductible?