Forum Replies Created
I own a Waldorf serviced apartment with a 5% guarantee. My advice is to check out what unusual “special” levies have been applied as we just got hit for $800 over two payments for “special” levies. Special Levies are not necessarily expempt from the levies and rates that are often included in the management agreement.
I would also suggest that you only take a short term agreement such as 1-2 years and then review it for a further term, 10 years especially is a long time and you don’t know what else you may want to do with it, also with a long term be sure there are rental increases because the agreement can state a 5% return of the purchase price value and therefore over a long term you are short changing yourself.
The other thing is to speak directly to the management company about other options under their management plan such as receiving a higher rental return based on long term rentals ie 3mths at a time.
Hope this helps, don’t be suckered by the gloss of a guarentee. You still need due diligence.
Just thought of one more thing, work out what is your exit strategy, such as how long do you want to keep it and keep 30% of your funds tied up, as these type of apartments are difficult to sell especially in a flat market. We have had ours on the market for 5 months and just yesterday decided that if we are prepared to reduce the price then why not include an incentive such as a new car instead, so now we are off car shopping for some unknown lucky investor.
Cheers
Leigh K[biggrin]Jars
That was a great review, and they would easily be the same things I got out of it too, with the addition of a few directly relivant bit for our situation.
It was great to catch up with people that have become good friends as well as meeting a few new ones, I thought SIS would be a bit more “preppy looking” and that Chan$ (Jet, Dollars, CHans whoever you are today) would be fatter – go figure! But I also thought Jars was a man so there you go.
I think I need to change my avitar to a chook as I got to hold the babies and got really clucky!!!
One of the other strong messages that came fromthe mappers was to create your own group of investors that meet and help and hold you accountable for your choices and goals.
Thanks, as usual Steve well done.
Cheers
Leigh KPS: Dave I like your presentations and personally I thought you had improved[laugh4]
Just a friendly reminder folks keep a cool head and don’t take other peoples opinions personally and don’t throw stones.
Leigh K
ModWestan
I noticed something interesting yesterday when we received our annual report, it stated that overseas owners paid a lower annual levy than locals – now I’m peeved about that – but it may be something for you to keep in mind when you are looking around, maybe help you save some annual funds. Don’t forget that you have to pay a membership into the exchange clubs and it is best to pay for the multiple years rather than one year only.
Cheers
Leigh K[biggrin]Good on ya Janette,
What a super post for your first. Welcome to the forum and I look forward to seeing you on Sunday.
Cheers
Leigh K[biggrin]Hi Westan
We have owned one for years, same story as FW. We exchanged it to the Carribean for our honey moon, those were the days!!!!
In fact we were only talking a couple of weeks ago about selling ours to buy another IP. Hadn’t given it much thought since but PM me if you want any details.
Cheers
Leigh K[biggrin]Hi Dom
I can’t help you too much, but to give you something to look at straight away is to do a search here on the forum as this is a popular topic and there has been a lot of very good advice.
Cheers
Leigh K[biggrin]Craig
You could do a joint venture without the complexity of a trust, this is where each of you form a contract specifing your share in the deal, your solicitors can do this.
I also noticed that you are in Melb, Dale Gatherum Goss as mentioned above is a sensational accountant (I travel from Sydney to see him – in a professional sense of course[blush2]) he is a trust guru but generally a top accountant as are his team.
Seek “GOOD” professional advice – that may mean seeing more than one accountant and solicitor – before you even breath on a deal, you might be mates now but what about in 1, 5, or 10 years.
Get your structure right now, and prepare a plan such as how long are you going to be a team, what are the indicators that will signify a time to sell etc.
Get your mates to become members here and start benefiting from the valuable advice that is available from many experienced investors.
Cheers
Leigh K[biggrin]Hi Hector
Nice post Kay[thumbsup2]
I would just like to add that you need to decide what your goal is and prepare a plan, such as mine is to produce a stream of income. I do this by buying CF+ regional and rural properties.
As you become more experienced you can change your plan as we are about to, there is an area not far from where we live that missed the last property boom and is most definately set for the next cycle. We will watch it until the area starts to change and then buy neg geared for the CG.
Steve gave you the most valuable peice of advice, learn to crunch the numbers because this is what can make a deal. You also need to learn about value adding to your properties to increase the rental return, such as a new bedroom, second bathroom yadda yadda!
Good luck, stick at it, despite what the nay sayers say the deals are still out there.
CHeers
Leigh K[biggrin]Now we have to come up with an extra 2K to cover which we don’t have. Does anyone know what happens if we don’t come up with the $2000. Who is liable? If the loan falls through do we have to pay anything to the vendor.Check your purchase contract for penalty clauses, sometimes they can be quite high and are charged on the outstanding amount until paid. I too would get the fund any way possible such as a CC.
As for liabilty, sorry but you are responsible for understanding what you are getting into and that includes double checking the “experts” because at the end of the day or in this case settlement you are responsible for the funds. As Terry said you might get a mere recourse from the bank, but don’t hold your breath.
Another thought is do you have any equity that could be accessed as a Line Of Credit, this might do it.
Good luck.
Cheers
Leigh K[biggrin]Ticky
Well done, it is a tough thing to do questioning someone’s work or pricing.
You are the boss of your business so take charge, you may not win them all but at least you are taking an active interest in what happens to your money. $100 could be the annual profit on a cf+ property.
I do beleive that things are all about swings and round-a-bouts, but never asking the question always results in a no response.
Cheers
Leigh K[biggrin]Rob
Is option B right for your goal or are you making it fit for lack of other option???? Just something to think about.
Cheers
Leigh K[biggrin]Hi Rob
Which one of these two propsect (if any) will get you closer to your goal?
Cheers
Leigh K[biggrin]We have bought one property sight unseen, as it turns out we have done well but we did spend a week at the property sprucing her up. The nerves that go along with buying sight unseen are not worth it to me.
I have to say I am with Yack on this one! What is the time and cost of checking it out compared to seeing them yourself. Maybe I am just still an ametuer! (spell checker)
Cheers
Leigh K[biggrin]PS: Kay, I would have thought ‘size’ was of no importance you![blush2]
rooti
I have one property under family trust/company.
I’m buying another now.
Q. What structure would best be used for future purchase of properties.
Any info greatly appriciated.Without any more details I would say buy them in your family trust (with corporate trustee). You can buy many in the one trust before you need to set up a new one.
Where are you located?
What are your property goals?
What problem are you having at the moment?CHeers
Leigh K[biggrin]I’d also like to play cashflow – never played before.
GP can you share the details.
Cheers
Leigh K[biggrin]Well just for the sake of joining in, we still only buy propeties with a 10% or better yield. That may be residential, retail, commercial, reno etc.
Cheers
Leigh K[biggrin]Gats
I agree with you in this instance, ethically it is right thing to do by asking Steve. Good on you.
Cheers
Leigh K[biggrin]Sonja has clarified it very well, if you are thinking of bird dogging in OZ, I would suggest you have a read throught the REA website for the legal aspect of introducing buyers and sellers.
Cheers
Leigh K[biggrin]We nearly had a lemon, I think it was the day after settlement our existing tenant topped himself and we didn’t know for a good week or so. Then being a smallish town everyone knew of the event and we figured we wouldn’t be able to sell it or rent it.
Then we identified a niche rental market in teh town. Each year the town bring in insterstate and overseas doctors, teachers and nurses etc. These people used to higher rents and generally plan to stay for 2ish years. So long as our properties are in there best condition we could rent out the potential lemon to someone that didn’t know the background and also we can charge a higher than market rent on all our properties, because the people are prepared to pay a bit more for a good quality property.
We do have a rental manager in teh town – I should say a rent collector but at least we had that much.
Maybe you could meet a local tradesman or neighbour and offer a small fee in return for small jobs.
Cheers
Leigh K[biggrin]
