Forum Replies Created
Julian, you might consider getting a wireless modem/router for home. You pay a few hundred bucks more for router and nics, but it’ll do away with the need to have cable running all over the place, and allows you to sit outside by the pool with your notebook. Netgear products are good.
If you go wireless, get the latest standard 802.11G. Further, get someone who knows what they are doing to install it. You will waste too much downtime doing it yourself, time better spent learning about investment. A good techie will explain all the steps and shouldn’t take anymore than 3-4 hours to have the machines running peer to peer. Don’t fret about all the security stuff they go on about with wireless, unless you have nerds living within 80 metres.
Bruce
Mooloolaba, QldJames, I take on board what you say.
The Qld Govt has been proactive in courting business to move up here. However, results are still anecdotal.
There is still a strong perception that education and culture are inferior in Qld cf Vic and NSW. Until international and national market dollars are being drawn into the area, then we still have net outgoings.You are right that families occupy the Bris GOld Coast corridor. However, the job market is still dominated by local services. The contribution of SE Qld to export or nationally derived income is not exceptional.
In the 80s, places like Logan and Beenleigh grew rapidly due to an influx of southerners into cheaper homes. Many from down south moved up here attracted by lower housing costs. However, within 5 years, housing prices decreased more in these regions than anywhere else in SE Qld. Why? because the labour market wasn’t supporting the debt carried by the area. To date, these areas are still primarily resources of unskilled labour.
Yes more migrants are targeting SEQLD. However, more skilled and professional migrants end up in Sydney and Melbourne.
Bruce
Mooloolaba, QldThanks Brendon. I have also been trying to learn all I can about bigger developments. And like you, know one has to be cashed up to carry lower LVRs, higher acquisition, holding, and dev’t costs. The one gotcha that scares me is local council fickleness. I have friends who are big players and they have spent heaps on the best legal representation to counter some adverse rulings. When the council want to play hard ball, they can drag a DA out over 2 years, which would be fatal for most.
At this point, I have come up with these options re entry ito the game:
– don’t be afraid to think big, as long as the risk is well known.
– do a joint venture with experienced developers.
– buy an ongoing project. From my research, there are plenty of inexperienced developers who half complete a project and don’t have the skill or stamina or cash or nerve to take it to completion or hold the finished product until all sold. There can be plenty of bread left in these, especially if the developer just wants to be free of what has become a psychological burden.The one thing I have come to realize is that it has to be treated like a serious business.
Bruce
Mooloolaba, QldI agree with what everyone says above re SEQLD.
Until large corporations move up here, wages and job opportunities will remain inferior. (Of course, what this masks is that the wealth of the south is being artificially fueled by the profits corporations make out of the national market.)Until the Qld state govt gets even more aggressive about attracting old staid companies up here to the sunshine, then the status quo will lurk.
So what does that mean for the future of SEQLD? Look no further than Florida. Lots of condos, retirement villages, and secure enclaves for the idle retired. And support services for these people will do well- golf clubs, health spas, alternative health charlatans, crematoriums….. now there’s a start up business for a gen Xer. cost effectively putting baby boomers in pine boxes….
Bruce
Mooloolaba, QldMy parents have had a stack of rental property ever since I was 8. Back about 14 years ago, my mother had trouble with one of the tenants. And it got too much for her to sort out, so I took over.
– as the story goes, it was a 4 pack block of flats in a lower socio economic area. A young 18yo girl, first time out of home, living upstairs got friendly over several weeks with the charming tattoed electrician downstairs. This guy had come recommended by his uncle who was living in one of the other properties we had.
– Anyway, one night they have a party. The electrician and his mate get the girl drunk, then have their way with her sexually, against her will apparently.
– they tell her male flatmate that if he says anything, then they will put him in a wheelchair.
– first consequence. she comes around the next day seriously distraught, not revealing why, and gives immediate notice. = loss of one good tenant.
– second consequence. I am ropeable after talking with the male flatmate. We talk to the girl’s parents and the male flatmate to get them to go to the police. they don’t want to. apparently she had been flirtatious, but apparently not enough to invite being raped by two assholes.
– third consequence. I ask the electrician to leave. He decides to go away for 5 weeks without paying rent before telling us where he is. Therefore we have a flat with his stuff in it, and he obviously knew how much time he could be away before we could legally enter the flat and take the stuff out.
– so he shows up one day. I am there on the spot asking him to leave. He wants to have a fight. I said I had found out he was on probation and I’d let him throw a punch and immediately have the police there and go to all limits to see him charged with breaking probationary rules. He backs off. And says he is leaving that day.
– the mistake i made was to say leave the key on the kitchen bench when you’ve gone. The next day, we go up to the flat, with another key, and he has trashed the place. Punched holes in all the walls. Pulled the oven out of the wall and smashed it with a sledge hammer. ripped up all the curtains, rubbed sh.t all through the carpet and on the ceilings. smashed the kitchen cupboards, and all the bathroom tiles.
– apparently one other tenant was home at the time, but didn’t want to get involved.
– we got the police in, and got this response:
“did you see him do it”
we say no
they say
“then there’s nothing we can do about it. claim it on your insurance.”I was younger then, not so young now.
So, when I hear about all the upside on the forum, I look back on the 37 years I have been involved in rentals (parents had 15 rentals) and wonder if the downside is being glossed over. I should add that my parent’s properties were in a reasonable area when first built, and we had reasonable tenants. But as the properties aged in style and the suburb demographic went south, sheet happened…….
BTW, I wasted a lot of breath telling my parents to sell these properties and buy something in a better suburb.Bruce
Mooloolaba, Qldregarding the USD, I looked closely at putting my money into a syndicate trying to raise $50million to do USD currency trades a few months ago. The trader we were going to use believed there would be a lot of volatility with the USD in the first half of 2004.
I doubt the US would raise their interest rates unless key economic indicators show signs of improving. The last figures I saw were that employment was not improving.
Nevertheless, I am not an economist and there may be some angle the Reserve can argue that an interest rate rise in the US will stimulate capital injections back into its borders, which will stimulate economic growth, despite the adverse effects on consumption. I think they could probably argue it whichever way they want.
Bruce
Mooloolaba, QldJust a few anecdotes on how China got economically strong. I believe it was due to the govt opening up to foreign trade. Everyone else thought the huge market would be worth taking a risk on so started courting the Communists. The US govt has been right there in the front line fostering relations, believing that a more open China dependent on international trade will be less of a rogue world power.
I was in Pennsylvania in 2001/2002 which used to be the tool and die captial of the universe, but all that has shifted to China since the liberalization of their political system. That industry in Pennsylvania is a pathetic skeleton of its previous self now.
Further, it wasn’t that long ago that Taiwan, South Korea, and Malaysia all adopted a similar economic strategy to that adopted by Japan post WWII. It paid off. I see China basically doing the same now.
Hewlett Packard in the last 2 years have much of their hardware manufactured in China. Previously it was Taiwan.
Bruce
Mooloolaba, Qld“if you prefer to do your own researching, then do it.”
there’s one little fascist dictate….
I suppose you don’t have the subtlety of intelligence to understand that two sources doing it has a cumulative effect.“But don’t decide that…..”
and there’s another.
Can’t help yourself huh Kay? I’ll decide what value to put on a $1000 thanks Kay, without any advice from you in your Gestapo boots and “$1000 isn’t a lot of money insolence”.Bruce
Mooloolaba, QldLeigh and Mini (who I thought was a guy), not trying to be a wet blanket, but have you considered getting some local knowledge on board?
I’d certainly feel more comfortable with a sheep loving local digging up the due diligence then Leigh, who is going to have serious time constraints and apparently has no long term local connections???
There must be a zillion fisch and chup shop owners who’d love to make a few bucks on the side filling out templates and going for weekend drives with digital camera in hand.
They’d also have an advantage in sourcing NZ reno brothers for those inevitable moments.
Anyway, once again, I am not trying to sink your idea. If you are providing quality info and investments, then I am supportive of the concept.
However, if I do my own due diligence and find out differently, I’ll bite hard.
Bruce
Mooloolaba, QldElves, I take your points. Of course, i understand what i am talking about is highly idealistic. However, there are several interim setups one could take towards that ideal. i.e. for one person to do due diligence on many towns is very time consuming. If a group of 5-20 act cooperatively and do due diligence on 50 towns, and share the data, then all will cut through the crap a lot more quickly and very likely move along to the next logical and more profitable matching of supply to demand.
If this collated data was even shared privately between an “e-investment group” then I see it a quicker way to achieve that common goal.
In this day of reluctant and invisible mentors, the next best thing is group cooperation. I am just putting up ideas to take a systematic approach to it.
Of course I understand there needs to be a group dynamic and there are a hundred barriers, but I think it is a positive thing to discuss different ways info can be shared more efficiently than it currently is on the forum. Investment syndicates are growing in popularity and they have more buying power than the individual. I see that a group of like mindeds could achieve a lot more than the sum of its parts alone.
Anyway, I am happy to take it on the chin from Adam or anyone else. Some people just don’t see the potential of the web and the power of a cooperative group.
Bruce
Mooloolaba, QldPisces, if you are happy with the detail in their reports, then keep paying your $65.
I don’t think they do focus reports on regional towns either.
Bruce
Mooloolaba, QldMini, I take your points above re refinancing locally in NZ.
Another issue I think you need to provide reassurance on is tenancies. We all know marketeers promise 18 months or whatever of guaranteed returns, only because they do dirty deals with tenants. When that period is up, the owner soon finds out what real tenant demand is like. If you weren’t inclined to do this, then certainly a dodgey NZ REA could get away with it.
Bruce
Mooloolaba, QldPisces, the website would have absolutely no value if it wasn’t carried out at the highest ethical level. It would have to be done strictly to template consistency, in a business like manner, with the integrity of an .org site.
When wading through the postings here, I think of the time we all put into it, and think how much more efficient and rewarding it would be to use our time logically towards a clear goal. We all have the same goals, there are obviously some smart people here. We could actually create jobs for the disabled or elderly to get involved in the research. To me, an individual can only do so much. A cooperative group, or an investment syndicate, operates so much more efficiently when looking at things on a non local level.
Working out how to charge for the info could be worked out later. I suppose at the end of the day, we would be developing a more detailed resource such as residex, prd, ray white, and matusik put out. The only thing is we are going one step further and sourcing +CF opportunities.
I am just thinking about how to turn a forum like this into a more time and energy efficient investment for us all. Our time is in many respects more valuable than our capital.
Bruce
Mooloolaba, QldAdo, you might be onto something here.
Reading through this forum and Somersofts, I reckon it would be a wealthy resource for forumites to contribute jointly to a website that kept uniform up to date due diligence information on regional towns, and city suburbs. At the moment, this forum has lots of snippets covering lots of different areas. If we took Steve’s idea of templates one step further to due diligence of macro and micro economic state of a township or suburb, then it would certainly take a lot of repetition out of it for all of us trying to attain the same objective.This way, we could all divert our money to where it is most needed at that point in time. It would really help private sector efficiency in supplying accomodation.
I would envision that contributors would have to pay a healthy subscription to receive the info.
If the macro and micro data was then combined with stats taken from realestate.com.au etc, then it could be a thing of true value.
Bruce
Mooloolaba, QldMini, there are several risks that you need to clarify:
– whether the loan is taken out via Aus or NZ banks. I was under the impression some Aus banks don’t lend for foreign property. If the loan is made with an Aus bank, then you need to factor in a risk margin for the NZ dollar weakening after purchase. In the last 10 years, the exchange rate has varied between 75 and 93 cents. If it dropped from its current 90 cents to 80 cents, you no longer have a +CF IP.
– disposability. If the locals don’t have the capital or interest to buy these properties with such high yields, then who are we going to on sell to later?
Bruce
Mooloolaba, QldVery apt and succinct Aaron. If we all looked at the market economy with a sense of obligation to make it work more efficiently, all Australian citizens would be wealthier, via increased exports, tax revenue, and productivity. This involves more than just the private sector doing property efficiently. When there are too many property investors driving prices up and yields down, then it is time to look at other avenues- sharemarket, investing in or starting a small business. Personally, I think the idea of investment syndicates are a brilliant idea. If everyone keeps acting alone, then we are still back in an economic agrarian age practising cottage industry.
Bruce
Mooloolaba, QldI’ve been considering a similar deal where the labour and capital are unequally distributed.
Haven’t done a lot of research, but have spoken with a few wiley old codgers about it. I have come up with two options:
Scenario 1.
my accountant recommmends just taking a private loan from the passive partner. Any profit or blow out in costs will have to be accounted for via the terms of the loan.Making it a loan with a fixed rate of return keeps it nice and clean for your mate. You are the local yokel who is supposed to know the risk, your mate doesn’t. So your mate should be protected from that by offering a guaranteed return.
scenario 2.
After talking with a bunch of people:– work out your acquisition, holding, and exit costs
– work out all your building costs, generally $/sq.m.
– from these, put a dollar value and percentage of whole on each person’s contribution to both.
– use that percentage to split the profit.– for the capital invested, grant each other bank lending rates for the time your money was tied up in the project, before you work out the profit.
– If you are not going to sell for a while, then the guy who does the work also needs to grant himself bank interest rates on the labour component from when he would normally be paid until the profit is realized.
If you have ongoing unseen costs, these are added into the equation and taken out of the final profit figure. Be very conservative when calculating your costs.
I think what you are trying to do is a great idea when your partner is in Oz. Being OS, you want to really do your homework on tax rules.
There is a severe lack of tradesmen around at the moment, and they have all put their rates up. So anyone who can do the work themselves is creating a job for themselves. Just make sure you got the land for the right price. Building materials are only going to keep going up. The downside is if the market softens significantly, and one of you wants to get out before it firms up again.
Oh and take on board that the USD may strengthen over the next 12 months. That is the other risk for your mate.
Bruce
Mooloolaba, Qldsorry that last reply didn’t come across clearly…..
try again.1.
they pay for the treatment before settlement and the price stays the same.2.
you deduct twice the amount of the pest remedy from the original purchase offer, and you will take care of the pest treatment after settlement.The rationale for the differential being this:
– the treatment is best carried out immediately.
– If YOU pay for it before settlement and the contract falls through, then you are out of pocket, and the vendor benefits by your financial contribution, and passing the next pest inspection.
– you want to cover yourself against the risk of leaving the treatment go until after settlement and the problem getting worse, by deducting double the cost of treatment from your purchase offer.Bruce
Mooloolaba, Qldglad to hear that last post of yours. I was going to suggest you make two offers to the vendor.
1.
they pay for the treatment before settlement and the price stays the same.2.
you deduct twice the amount of the pest remedy from the new purchase offer and you will take care of the pest treatment.The rationale for the differential being if the treatment is delayed until after settlement, there is a higher probability termites will enter the house. Plus if your contract falls through, the vendor benefits from the next pest inspection being passed.
Bruce
Mooloolaba, QldDeception Bay happened at least a year ago.
As has Beachmere and Bribie.
Deception Bay used to be known as the Inala of the North.
The demographic is still pretty bad down there. And it may take 10 years for things to change significantly.
Personally, if you have to buy now, I’d go back towards the city or down to Wynnum Manly.Bruce
Mooloolaba, Qld
