Forum Replies Created
Hi Dazzling,
Just can’t work out what a 4 x 2 house is. Is it a four bedroom, two bathroom house? (I thought a 4 x 2 was a block of wood!!)
Thanks, Wylie.
We have been private landlords for over 25 years with very few problems. We have never done any regular inspections. I know this is perhaps unusual but I would hate someone to walk through my house and unless we perceive that there are problems, we never do this. If we think there are problems, we arrange to call in to, say, collect overdue rent, or discuss the issues or whatever, and get an idea of how they keep the house, without being too obvious.
However, if you want to do an inspection, the RTA website (in Qld) has forms for just about everything you need, and I’m sure there are forms giving tenants notice of an impending inspection.
One couple renting from us decided to install shelves in the freshly painted walls without asking. They drilled 1cm holes in the VJ walls to do so. They also removed the clothes line. They were very reasonable when we explained we would deduct the cost of a new clothesline and have a painter patch the wall. The money was taken from their bond and they probably learned a good lesson, but there was no bad blood between us. Very lucky, but perhaps because we didn’t come over all heavy with them.
If a tenant replaced a broken window glass with a badly mismatched one, we would probably get a quote for the right glass to be replaced. We would request that amount be deducted from the bond.
We have always relied on “gut feeling” in selecting tenants and have only been burnt a couple of times, never badly. We always treat our tenants with courtesy and respect and nearly always get that in return.
We have just rented a house we have bought and renovated. As a precaution, as well as filling out the condition report I have taken photos to back up any future disagreements about the condition of the house, should they arise. We did this because last year, we had tenants go into a house in very good condition. When they returned the condition report, they made it sound like a flea pit (which it certainly was when they left, but not when they went in).
Cheers, Wylie.
My husband worked in the mines in Mt Isa for four years. I will be almost passing out with heatstroke in Brisbane and he says “what have you got the air conditioning on for, it’s lovely outside”. Yeah right!!!
I think the sun has had some sort of effect on him – fried his brain. Not only did he work underground, he also played football, just in case he wasn’t hot enough. Can you imagine playing football in 45 degree heat – MAD!!
He also says the cockroaches up there were as big as his foot (may be slightly exagerating) so that and the heat would be the end of me.
Not my type of town – Wylie.
On the Today show this morning were three finance experts, all very well known in the media. They talked about the stories floating about that banks are selling up people in trouble.
The point was made that the same percentage of loans were defaulted now as in the boom period and much less than the defaults in the 1980’s. I think the figures were something like 1.7% now, 1.7% in the boom and 2.5% in the 1980’s. In other words, more defaults from more loans, same percentage.
The message was that the sky is NOT falling any more than it always has for those who have made bad decisions or have had bad circumstances forced on them by job losses etc.
Anyhow, that is what I got from the story.
Wylie.
Do you REALLY NEED a new car?
If you don’t need to sell the unit, don’t sell it, especially if you use the money for a new car. You would be giving up potentially thousands of dollars in capital gain and rent for something that will lose you thousands of dollars over the same period.
If you NEED a new car (I’d chose a second hand car) I’d definitely leave this tenant in, but raise the rent to it’s market value. If he has been there for 13 years then getting it up to market value may be too big for one jump. Possibly raise it for six months and then raise it again.
If he has a lot of “stuff” he will probably not want to move it for a small rent rise, especially if he knows he has been paying less than market value for a while.
If he goes, by all means do the renovation, but then rent it for even more and the extra rent goes towards a car loan.
Better to have him in there (with more rent) than have him move and have to renovate while it is empty, especially if he is a good tenant.
We’ve (reluctantly) sold IPs to clear debt and improve cash flow as our children have grown and living expenses have increased, but we would NEVER sell an IP to buy a car.
Just my thoughts, Wylie.
Hi Mkc. Thanks for that information. The sheets are well painted on the outside and in good condition. I can’t remember about the inside but I don’t think it is painted on the inside.
We have removed asbestos ourselves before (being extremely careful and with the children gone) but it scares me silly that someone could die because of our renovating.
I know the chances of being afflicted are fairly slim, but my uncle died from an asbestos related disease recently, and he was a builder, so he probably worked with it a lot before the general public knew its dangers.
The medical professionals have said that asbestos disease will be a big problem in coming years because of all the renovations happening.
I think we will probably leave it be until we do raise the house and then get quotes. Apart from not wanting to risk our health, I am also mindful of the public liability aspect.
Having said that, last time we painted our house, we paid considerably extra to have the sanding done with a special extractor sander because of lead content. Few months later, our elderly neighbour had her house sanded and painted with dust blowing all around and into our house. I shut everything up but queenslanders are not exactly airtight.
I just wish there was a way to ensure that these dangerous practices could be policed better so we could be safer. You can be as careful as you like and then have the idiot next door take the cheap way out and put you at risk.
Thanks for your info, I will do it the right way but maybe later rather than sooner, seeing it is in good condition.
Wylie.
We have just used a Westpac loan which is a low doc type setup for one year until we prove our servicing ability, when the interest rate reverts to the rate we are paying for the other half a million they lent us two years ago (and which has been serviced properly). One would have thought our servicing record over the years would speak for itself. Go figure!!
We are very glad to have the loan (through a neighbour / broker) because it enabled us to buy the property behind one we already have, but otherwise we wouldn’t have touched it. The reason it is a low doc type loan is because I don’t work (outside the home – and not much inside either – LOL) so our servicing was letting us down but we had stacks of equity.
I’d definitely go to a broker who can source a lender for you.
Wylie.
Hi ecatt.
I started work at 16 on about $3,500 per annum. I don’t remember what I was being paid when I bought my first house (aged 23) but it was possibly around $14K pa. That would put my first very modest house at 3.5 times my salary. (My memory on all this is a bit hazy – I wish I had better records.)
Eventual ownership seemed a long, long way away. The thing I do remember well is that once those monthly payments commenced, I never had anything much left over for anything remotely luxurious.
Hope this helps, Wylie.
Hi ecatt. If you send me a private message with your email address I would be happy to send some photos.
Thanks, Wylie.
To be truthful, we don’t know how it will stand up to water. We have sealed the wall edges and sink edges with waterproof filler but water sitting on the actual bench will possibly mean it will lift.
However, if we need to we could replace the whole benchtop section for very little cost. We will watch and see how it goes. This kitchen will probably only last a few years. It could probably last another 50 years but I’d like to replace it before too long with a new (or second hand) kitchen to get better rent.
In the meantime, the floating floar totally transformed it and it actually looks good enough for me to use, which is how I judge the finish in a house we are offering for rent. If I cringe at something, I figure most people will too.
I’ll certainly post any problems if we have them, because I’d hate to suggest something which turns out to be a dud.
Wylie..
What on earth is a digital skeleton?
Don’t know where you are, but don’t ring a builder. Look in the phone book for a restumper.
One thing to be careful of is that ALL costs are discussed. We priced a lift job in Brisbane and found two stumpers quoted around $10K to $15K (from memory) to lift a house (this is 8 years ago). It was only when we got a third quote that this fellow told us the $10K (from memory) didn’t include plumbing, slab, electrics etc etc. We had to double the estimate.
We never did raise that house, but have used that third stumper for many jobs since and recommended him for many others.
The other thing I would be careful of is insurance. As far as I know the fellow we used is the only stumper whose insurance covered OUR HOUSE as well as his workers. Each time we asked the stumpers about insurance, and each time they said yes, they have insurance. Make sure that they have insurance for their workforce, their equipment and YOUR HOUSE. Otherwise, you may be left with a pile of rubble and a quiet “sorry”.
Things may have changed since we looked into it, but thought I’d put my experience on paper, in case it helps anyone else.
Wylie.
I am with the “get a professional” camp as well. I have done it myself (in Queensland) many years ago using a kit and I think the grey hairs it added to my hair were just not worth it.
I found the stress levels similar to those involved in planning our wedding, ugghhhh!!!
The other thing I learnt doing my own conveyancing is that (in my experience) solicitors treat you like something they have found at the bottom of a pond. You can almost see them pulling on the rubber gloves when they have to deal with DIY conveyancers.
We have used a local solicitor for quite a number of purchases and sales and she charges only about $350 for a purchase, less for a sale from memory. Money well spent in my opinion.
My thoughts, Wylie.
Just a comment about US prices. We have just been to San Francisco and LA. Didn’t look at any real estate but took a guided tour of the sites of San Fran and the bus driver said the average price of houses there was $1.3m (that’s US dollars). I don’t know how accurate he was but it was food for thought.
Interestingly, we stopped at a beach and I asked how much the new looking houses right opposite the ocean would be worth. He said about $900K. I asked him why so cheap right on the ocean and said on the Gold Coast they would be worth millions. He said the fog rolls in every afternoon for most of the year. I suppose that is why beachfront in that spot was worth less than here.
He said in San Fran houses are painted about every three years because of the effect the fog has on the houses (and the famous bridge).
Now we are home I plan to have a look at the net for prices just for interest sake. We did pick up a real estate book which I have yet to have a decent look at because since we got back we have been renovating (busy, busy, busy). The real estate I did glance at in the book was pretty expensive though.
We happened on an open house in Santa Monica in a street leading to the famous beach. It was a beautiful ultra-modern brand new house and was on the market for just under $4m. Same house would sell on Hedges Avenue for more but in trendy parts of Brisbane for (I guess) between $1 and $2m. I’m glad I don’t have to buy a “nice” house in LA.
The other thing I was pleased to see was during a tour through a very upmarket area where the movie moguls live and each house had a little dinner plate size plaque in the lawn advertising the security firm who monitor their property. One of these houses was undergoing a renovation and had the whole front of the double story house covered in the thick plastic like we see in the movies (Lethal Weapon comes to mind) and which I have never seen in Brisbane. I used to wonder if that was just in the movies or whether the plastic really is used, and I have now seen it with my very own eyes. How interesting.
It was an tantalizing little snapshot which has piqued my interest. I love looking at other people’s houses.
Wylie.
Why couldn’t it happen again.
I bought my first house for about $18K about 25 years ago. That house would be worth probably $450K now. I have been around for at least three price “booms”. (or property cycles). Each time, people are amazed at the price houses had reached.
I worked with a 20 year old who bought three IPs, each about $20K (25 years ago). He budgeted really tightly. Most thought he was mad (not me, I was doing similar, but only one at a time). He would be laughing now. I reckon he would be a millionaire several times over by now.
Each time prices go up, everyone says “how can that be”. It just is. Don’t forget wages are going up too. I certainly think my sons could afford a small house at the same age I bought my first one. I personally believe one of the problems is that he wouldn’t want to live in the same “small” house. He’d want everything NOW, while we’ve worked years and gone without, in order to afford some extras..
For what it is worth, I know prices have fallen slightly in my local area, and I think they will now stay flat for several years before again starting the slow rise. We have just bought again because we are “buy and hold” types and don’t care that prices will be flat for a long time as long as someone is helping us pay them off.
I remember quite clearly when I was about 17, my parents went for a ten week Europe trip. They advised some Scottish people they B&B’d with that they could sell their house and buy two houses in Brisbane for the same price. They had just sold a house for $29K. In the time they were away, the market had a steep rise and they could have sold it for $50K by the time they got back. They had to very quickly phone these people and tell them not to sell until we could get some up-to-date real estate magazines to them because prices had risen literally within that three month period.
So it has happened many times before, and I have no doubt it will happen again. I would not like to be buying my first house today, but then again, that is exactly what my parents said when I was buying my first house.
Just my thoughts, and I am sure there will be many differing opinions posted about this topic.
Wylie.
I care as well, and I also am having trouble reading this font size. Is there anything I can do to change it. I have tried one of the suggestions, but my son tells me it didn’t work because I run Mozilla Firefox.
If someone could help I’d really appreciate it, because I am having to squint to read this, or move so close to the screen that I risk frying my brain, and we girlies need to keep the wrinkles at bay for as long as we can.
Thanks, Wylie
Hi Sandy,
Sounds like a great idea and I am looking forward to reading your ongoing diary.
Regards, Wylie
Amanda’s idea is exactly what I do. I file anything spent on our IPs straight into the folder and give our accountant a summary of what we have done with that property over the year. I list the income received, interest paid and a breakdown of what we spent, ie. replace plumbing $xx, dumped old fans, new fans cost $xx, electrician fee $xx. This gives the accountant a chance to write off anything as well.
The accountant sorts out what is a repair and what is capital expenditure. Anything that doesn’t fit into one house goes into a general 2005/2006 tax file which I sort up at tax time.
My mum has a spreadsheet for each property but I have never gone down that path (not enough properties to bother setting it up).
One tip my mum passed on which I love is that in the rental receipt book I draw a line from corner to corner of the page where I have taken the rent to (ie. rental may have been for the week 26 June to 2 July) and write across that particular receipt “2004/2005 year inclusive”. Otherwise next year it is impossible to remember whether the broken week was taken into the previous year’s rental income or left to be taken into the next financial year’s income.
I think you’re all taking this too seriously. I assume you are all thinking that anything could be written above your signature, but this post is just to tease anyway.
In REAL LIFE of course no-one is going to offer $10,000 for a signature without any strings attached, and if they did, surely EVERYONE would smell a rat!!
I get similar hypotheticals all the time from my youngest child and instead of trying to explain that the scenario can never happen and have him say “but WHAT IF” I now just give him the answer he wants so he will give it a rest.
So sign me up, I say. I fact I’d sign a couple of times and pay off my mortgage LOL.
Where do I sign, Wylie.
With eight months left on the tenancy, I would guess that council approvals would take that long and you could sign up the next tenancy with conditions that suit you both. If they want to stay, perhaps you reduce the rent slightly whilst the building is going on to entice them to stay. Check with the RTA about it if approvals come through earlier.
We are hoping to do this ourselves within the next year or two and I have put some thought into it. Better to have tenants in situ with a slight reduction in rent than try to rent the existing house with a building site in the back yard, in my opinion.
Would love to hear other suggestions, Wylie.
