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I would depend on your own homework. My parents bought their house for $200K more than the agent suggested vendors would accept. We just bought a house for $200K less than it was first listed at.
Much depends on how well you know and trust the agent, but it comes down to knowing your area and your prices.
Listen to the agent, but don’t forget they have a vested interest in the sale.
My thoughts, Wylie.
Thanks tgavin71. Our laundry is small and we have put in a sliding door to save space. The benchtop is New Guinea Rosewood with an estapol finish. The white ceramic deep sink is cut into this worktop and that part has two doors, just like a kitchen sink cabinet. The other half of the benchtop sits over the top of our front loader so it doesn’t have doors. We could have put them on but they probably would never be closed because I wash most days..
In our previous kitchen we put four full length narrow doors with bi-fold hinges which totally enclosed a front loader with dryer above and a tub and storage in a space no bigger than a large pantry. Our brooms and mop also fit into this space. It was fantastic.
Why don’t you fiddle around with pen and paper and see what you can come up with.
Good luck, Wylie.
For what it is worth, here is my idea.
I would go with the shower in the laundry but only if you can make your laundry look a bit lika a bathroom, ie. our laundry has a front loader under a bench with a ceramic basin and lovely mixer tap which looks classy but is deep enough for handwashing clothes if needed. This cabinet is very nice and was made by the cabinetmaker who made our kitchen. Our laundry is adjacent to our kitchen area and I didn’t want a “daggy” laundry tub setup.
If you can make that room more “second bathroom with a laundry included” as opposed to a “laundry” with a shower included, it could be a much sought after second bathroom.
We had a choice when we renovated of having built-ins in our main bedroom or a separate shower in the adjoining family bathroom. The bathroom is quite a good size but we went with the built-in bedroom (which was a no-brainer in hindsight). However, if I had my time again, I would definitely install a separate shower cubicle if there was room.
Can you add storage anywhere else? Just as a tip, when we had our cabinetmaker fit out our bathroom built-in storage we had him put doors from about waist high up to the ceiling for towells, linen etc. From the waist down we have eight drawers (four each side). With three boys, instead of sorting out who’s socks and undies belong to whom, each drawer is dedicated to socks, undies, swimming gear, boxers for sleeping, toiletries, etc.
I throw all the undies etc in the approproate drawers and the boys grab their own pair after their shower. I absolutely LOVE this idea and would do it again if I moved. It also frees up drawers in their own rooms for storage of their own junk.
Hope this helps, Wylie.
We have managed one or more IPs for 25 years and have never done an “official” inspection. I believe if we chose our tenants carefully and have a good gut feeling, things will be fine, and they generally are.
We have had one lot of bad tenants recently who caused the neighbours grief due to fights and loud arguments through the night. They stopped paying rent and during the process (long and frustrating) of having them evicted, we visited the house quite a number of times.
For us, we only get involved in their lives if they do the wrong thing by us. It has worked for us. I would hate to walk through someone’s house (even if I own it) judging them. I know that is not what I am doing, but that is how I would feel if I was a tenant.
We have just rented to two (seemingly very nice) young men and I took the opportunity of having a peek at how they were keeping the place last week when I had to let an electrician in to install a fan. You can manage to do an “inspection” without seeming to be snooping on their lives.
I might also add that on the occasions we have had managing agents through a house to get an idea of what it would rent for (and to have them find us a tenant in exchange for a week’s rent) we have always got more rent ourselves than their estimate of what the house is worth.
Wylie.
We had a rat die in the wall cavity near our bedroom. Pretty bad for a few weeks, and for a few months afterwards when we got a really hot day (Brisbane) there was a bit of a smell. By May there should (as hb said) only be bones and no smell.
We also had a possum die in our roof and there was a smell when we turned on the ducted air, a slightly odd sweet smell. It was not nearly as bad as the rat.
Time heals all wounds, and most smells.
Wylie.
In our case with Westpac, we advise them (via our broker) early June that we want to prepay. They do up loan documentation which in effect fixes the IO loan for one year and we sign and return. We are given a day on which to transfer the funds (we do it via internet banking). This year, the rate was better for a two year fix so we did this.
As far as rates are concerned, we contact Brisbane City Council who work up a figure which we pay before June 30.
Last year I was told we couldn’t prepay land tax. I called again and was told I could, so I did.
Good luck, Wylie.
My understanding is that if they are on a lease, you cannot ask for vacant possession. However, if you go ahead and purchase and they fall behind in their rent, you can give them notice.
Going by what you have written, I’d go ahead and buy it. Keep taking the current rent until the leases end (make sure you give them the right amount of notice that you will not be renewing the leases) and then go ahead with your renos.
If they happen to apply to rent again (not likely as they would have found something else by then) you just don’t rent to them. Take an application but rent it to someone else.
My thoughts, Wylie.
I have to disagree regarding the tax refund. I do my tax as soon after June 30 as I can and having prepaid interest for the year (plus rates, land tax and anything else I can prepay) the refund then comes as a lump sum and sits in our housing loan to reduce that interest. We then redraw it to prepay interest the next June and get another tax cheque. It works for us.
Personally, if I did a variation (and we have done it in the past), we would just increase our living expenses – it is human nature.. Statistics say that people live up to their incomes, so we’d rather keep our income lower and get the bonus at the end.
Our trouble is that with boys 17, 14 and 10, they would eat through any extra on a weekly basis. If there is more money, the temptation is there to be a bit more extravagant with the groceries. Anyone who grocery shops knows that some of those extras cost big.
For me (everyone is different) getting that tax cheque is a huge incentive to tuck it away.
That is what works for us, but everyone has their own level of discipline and priorities.
Wylie.
I’ve found lately that if I go back to the home page, I don’t have a logout invitation. I have to click on a post and get into the page to have a logout opportunity.
Don’t know if I am alone in this.
Wylie.
We have just bought an IP and a fridge was left in the house. It is in fair to good condition, but we have added to the lease that should it fail, we will not be replacing it.
Fridges, however, are not usually part of an unfurnished house and in your case, say the oven fails, you cannot expect someone to live there without an oven or cooktop. You would have to replace it, even with a working second hand one.
Dishwasher you could get away with, because many houses don’t have one. I would suggest that you add to the lease that if it fails, the rent will decrease by $5 per week. You could just say it will not be replaced, but I think you would be limiting your market by saying that.
Just my thoughts, Wylie.
Fear of the unknown is exactly what we have. I have spoken to a town planner about our options for this block and his advice was initially to have the blocks surveyed showing house position and services. I plan to get this ball rolling and then we will know what can and cannot be done.
Who should I be seeking advice from? I am happy to pay for advice and guidance, but just don’t know where to start. I have been reading all I can on this and another forum trying to glean information about small developments. I have a very steep learning curve ahead.
I am hoping that, say we put two houses into the back yards, we will have four rental incomes instead of two, and depending on the costs involved in building two houses, we may get away with holding all four. Failing that, we sell one and try to hold three.
The 30 houses I mentioned were not all owned by us (I wish). My parents bought their first IP when I was 15 and since then I have helped them paint/renovate their IPs, their own home, our PPORs and our own IPs. Some of these have been painted a couple of times and over the years, have needed new bathrooms or kitchens or decks. I just mentioned the number because to me, renovating is something we can do in our sleep, but building from scratch is a whole new ball game, and I don’t know any hints or shortcuts, or what to watch out for. And there are lots of stories of people going broke doing small developments. So I don’t think I am so smart that we cannot go broke, and it does make me very wary.
We have only sold two houses in over 20 years, both to clear debts as our life decisions necessitated changes. We have three children, two now in private schools. I am not in the paid workforce. I would have kept both houses if we could, but the choices we made were right at the time and enabled us to reduce our debt and renovate our PPOR to make a comfortable home. Our other options were for me to return to full time work, and of course this is an option for us now, but I don’t want to have our investing choices dictate my direction in life.
While we have a fairly comfortable life, we certainly don’t spend up big but I don’t want my kids to remember having to scrimp and scrape (as we have done many times over many years) just to have some assets at the end. We want to enjoy the journey.
I suppose life is a balancing act and we have to find what is right for us. We have to make some choices this year about which direction we will take.
Cheers, Wylie.
Hi Dr X.
Yes we did get it finished. Luckily my parents looked after the children because we worked very late.
We still have that house and have since added a huge back deck, new kitchen and had the floors polished. Each addition or improvement has made renting it so much easier.
Cheers, Wylie.
Hi Derek,
Far from being an expert, we are faced with a bit of a quandry. We have just bought and renovated a house backing onto another IP. This gives us 72 perches with two street access and two houses which cannot be moved (character).
We have stretched ourselves and this is heavily negatively geared. We have borrowed extra to allow us time to work out what to do. Our options include –
1. Selling another half share house we have in order to reduce our loan enough to just hold these two back to back houses until we decide what to do with them.
2. Go straight in and get a DA aproval for one house, two houses or perhaps three townhouses.
I would like to keep the half share house, but we need to speak to someone who knows the ballpark figures on our different scenarios because to develop the block would mean borrowing much more than we have already, and the associated risks involved.
Perhaps someone needs to tell us to get the DA and onsell the block to avoid the hassles involved in actually building anything. I want to develop the block, but I don’t want to end up in the loony bin doing it, and it seems that going crazy or going broke are two definite possibilities.
I suppose I am stepping outside my comfort zone.
Since I was 15 I have helped paint, spruce up or renovate over 30 houses with my parents, then my husband. Renovating doesn’t phase me, it is just hot hard work. However, we have never built from scratch and I’m a bit nervous about where to start.
I thought a financial planner who knows property development and the risks could give us some direction.
I read many posts and think we are real tortoises. We are in our mid 40’s and, considering I bought my first house about 25 years ago, I feel sometimes that our net worth just doesn’t reflect the amount of hard work and sweat we have put in over the years.
I’m not complaining, but each time we buy a house I think “this time I will pay someone to paint the house” and each time we don’t have enough money to do it, so we do it ourselves.
I do go through periods of thinking it would be easiest to sell the half share, reduce the IP debt and just cruise for a while.
Sorry to ramble, and I hope I don’t come across as though I know everything, far from it.
Cheers, Wylie
I think the gurus might just be wrong, but in the meantime, someone is paying us good money to live in our houses with the added bonus that they are growing in value, sometimes slowly (and sometimes slipping back a tad, like just recently) but still growing.
I’ve watched at least three property cycles and don’t have any doubts there will be another one, and almost certainly prior to 2018.
Cheers, Wylie.
hb,
I don’t think I was off topic. I don’t know how you work out our $50K would be worth $270K. How do you know we would have chosen “good” shares. I know the news reports say that if you invested $xxx it would be worth $xxx now, but what if you happen to pick a poor performing company, or one that goes bust, or get bad advice.
My risk profile does not include shares. My parents have made their money from houses and shares. They have NEVER lost money from a house but lost $26K in one day after an adviser told them a company they had shares in was okay. They had heard rumours this one was having problems and should have followed their gut instinct and got out then. Instead, they asked their adviser, who told them all was well. Couple of days/weeks later, $26K down the drain.
The only time we bought shares we lost the lot. Luckily we could only scrape $1000 together (20 years ago) or we would have lost more.
I have no problems with others buying shares, but they are not my cup of tea. I cannot paint a share or add a deck. I am too lazy to follow the sharemarket, but I am not too lazy to get out a paintbrush. It comes down to what you are comfortable with.
By the way, hb, the house we bought for $155K (instead of taking the adviser’s advice) was last valued at $530K six years later. It is 5km from the city on 36 perches with development potential. It can only increase in value as more people try to cram into SE Queensland. I’m very glad we didn’t listen to the adviser.
I am sure that if we had put our $50 into shares, they would be worth much more today, but some of the best “blue chip” companies have gone belly up, so how do you pick a company to trust and sleep at night?
I’ll stick to houses.
Cheers, Wylie.
NTDD -non tax deductible debt.
I’d mention things when you find out about them. For an example, if we had told the tenant they were up for the cost of a replacement clothes line, they may have decided to buy one themselves. As it happened, rather than another hills hoist in the middle of the yard, we chose a fold up type and attached it to the side of the house, which is a much better look for this house (and most houses, I’d suggest).
Use your gut instincts here as well though. If we had said the wall had to be patched, the tenant may well have tried to patch and paint, using the same (lack of) expertise he used in putting up the shelving in the first place. AARGHH!!!!
I’m fairly laid back, try not to ruffle anyone’s feathers, so I would wait and see what life (and your tenant) throws at you and take each problem as it comes.
Best of luck, Wylie.
Definitely go with the creeper. We have an IP and the nighbours insisted on a chain wire fence, although we wanted to pay more and have timber. We put creepers in and soon it will look much better, and much more private for both neighbours.
Try to make sure you choose a creeper that isn’t too aggressive or has to be trimmed.
Wylie.
Troy and Bec asked the forum because they don’t know the answers. They are not asking for anyone’s permission to do what they intend to do but simply wanting to research, research, research. Asking a forum like this for answers is part of that research.
It makes me a bit nervous to ask something in case I get a sarcastic answer, but I know that most people on this forum are genuinely trying to help.
Helpful answers surely don’t include belittling other forum members.
Wylie.
I would also be interested in a “neutral” or, better still, “property oriented” adviser.
We last spoke to a financial adviser several years ago. We took great care and chose an adviser who charged by the hour as opposed to fee based. We could only find one in Brisbane (probably many more now, but this is quite a few years ago).
The advisser told us that we were too heavily into propery. He suggested we sell our negatively geared IP, pay off our PPOR and invest the left over $50K into a nice safe property trust or similar product.
As soon as he started talking, our hearts sank. Sure, we would have a house we owned outright and some cash, but it was the opposite of our wants, and he certainly he didn’t read our risk profiles very well.
If we had taken his advice, we would be have had only one house to catch the most recent house price rises and would be kicking ourselves.
Anyone got the name of a Brisbane adviser who actually invests in houses?
Thanks, Wylie.
