Thanks for reminding us to chill out about perceived problems.

I have a son about to do the “most important exams in his life” or so he keeps being told. We are fairly chilled about things and don’t stress ourselves or him about it, but he does know these exams are important and we expect him to do HIS best.

I know that many, many parents put a lot of pressure on their children to do well, when in reality, if they get into their course (or even their second or third choice) they are “in” and can make further choices down the track. They may not even want to go on to further study (gasp!!).

We went to QUT last weekend and a lecturer in the subject my son is interested in said to apply for the course of his choice with an OP 6, another similar course with OP 8 and to make sure he applies for something with an OP 10. He said my son will get into one of the courses and can do the first general year and then change horses mid-stream.

It was a real comfort to us, but I know other parents who are more stressed and edgy than their kids.

I have a feeling that it is a slight variation on “keeping up with the Joneses”. My John will be doing law, medicine whatever, what is your son going to do?”.

I don’t care what he does as long as he is happy, truly.

Wylie

Personally, I’d never do it WITHOUT an accountant. You sound like you know what you are doing though, but what if your research has missed something claimable? Or what if you make a mistake? To me it comes down to the sleep at night factor.

I get everything in order and hand it over. I don’t have to spend hours on research, but I do pay for their expertise, and I do check it when it comes back.

To me, it is worth every cent, but each of us has our own comfort levels.

My big concern would be being audited, and if (when?) that happens, my accountant will be invaluable. My other thought is that the tax office is less likely to audit me if my accountant has a good record. I would think a personally lodged tax return with developments and rentals would be likely to be flagged. Just my thoughts.

I know my accountant would never try to claim anything dodgy, but the thought of having to remember every transaction for the past seven years in an audit is enough to scare the dickins out of me. I can’t remember what I had for brekky yesterday, let alone the details of a transaction made six years ago.

And of course, the tax office won’t be very understanding if you have interpreted some ruling incorrectly, or even if you forget to add something like interest. This is where an accountant comes into their own. They have to know things I don’t know.

So for me, it is worth every cent.

Wylie.

I manager our IPs and judge how the market is doing at the time the lease is up. I have a twelve month lease nearly up and I plan to up the rent $10 per week. This brings it up to market value although I am sure I could get a little more if they leave. However, I will not increase more than $10 because any vacant period will mean a loss to us and it would cost the tenants more than the $520 extra ($10 per week x 52 weeks) for the next year to move, so I am fairly confident they will stay.

Sometimes we renew leases with no increase, just depends on how the market is at the time, but things are moving up now, so we will do the same.

Wylie

I’d ask some estate agents. This is rather a rare thing and it would be a pity to paint the walls, but having lived with panelled living and dining room walls, I know how dark it is. I had to have the lights on during the day. Once we renovated we built a light, bright kitchen/living area and the panelled rooms were then used mainly at night. It would have devalued our house a great deal to have painted the walls, and seeing your house will be rented, you will not be living in it, but of course, it has to appeal to tenants as well.

I’d get some estate agents opinions before you touch anything.

Wylie.

I’d check out buying a house now that would suit your new family arrangement, in a suburb you would be happy to settle into with a family, and throw as much two income funds into it as you can manage. By the time you have a baby, you will have some equity in it and can then make further decisions as to whether you want to stay there or keep it as a rental.

Just my thoughts, Wylie.

Hi Lyndon.

We are a loooooong way from needing a builder, but we are planning a building project for the next year or so, depending on how long approvals take.

My question is this. When we get plans and approvals, do we give a copy of the plans to, say, three builders to have them quote? If this is the normal procedure, how do we compare apples with apples. We would be looking at a higher spec than “basic” without going over the top so should we price the toilets, sinks etc we would like before we go to a builder and give him our prices, or do we just ask him to quote the job but leave out the particular fittings we want to upgrade?

If we do go ahead with this (and we haven’t even got to the plans stage yet) it will be a huge learning curve for us so your advice will be much appreciated.

Thanks, Wylie.

Sorry I can’t help you with the grinding problem, but surely this would be a common scenario with units all being up stairs. Maybe call another grinder to get another slant on it.

I also don’t know anything about it, but a look I love is the polished concrete look, maybe with subtle swirls of pattern in it like you see in some coffee shops etc. I’d imagine the tiles that came off would be about the thickness of a topping of concrete which is polished or coated and maybe the glue residue could stay. May be much cheaper than grinding and tiling, and I think it looks fabulous.

Or what about a nice hard wearing carpet (but if it includes a kitchen you obviously need a solution other than carpet)..

Don’t know if this helps, but just an idea from left field.

Wylie

For what it is worth, I feel if you are using the agent just to find you someone, you might be better off doing it yourself. We have always managed our IPs ourselves but on numerous occasions over the years, we have given local agents the chance to earn an easy week’s rent for finding us someone. First “someone” put into our IP turned out to be a prostitute who had been in prison for stabbing someone – yeah – thanks a lot to that agent..

I feel that for them it is easy money with no ongoing management, therefore, why not put anyone in – after all, any ongoing problems will be my problem, not the agents.

I have gone on gut feeling with few problems. Certainly, there have been problem tenants over the years, but you get that with an agent as well, so I’d rather have the money in my pocket.

On one occasion a local agent found us a tenant, but we still had to fill in the lease and other forms. So basically, they took a week’s rent just for giving our phone number to someone who walked in their door – pretty easy money.

What I usually find is that I don’t even hear back from local agents. I understand totally that they want to find tenants for the properties they will be managing and they will only hand us a tenant if they haven’t a property under their management that suits the tenant. I totally understand this and don’t bother anymore even approaching agents.

Unless you live too far away, why not make up an application form so you can vet each prospective tenant and give it a go yourself. As you do more and more, you will become confident. If it doesn’t suit you, then of course, go with an agent, but it isn’t difficult.

Something we have tried before (and which failed dismally in the past) was having an open house. When we have tried it in years past, we have sat at the house like stale bottles of beer, waiting for someone – anyone – to turn up. If there are lots of houses available, we often get no calls from the Saturday ad, but they come dribbling in Sunday and through the week. However, a month ago, we had an open house and it was like market day. We rented it on the spot. It all depends on how tight the rental market is.

Wylie.

I agree that tenants can pay off all the loan. I found an old budget from 1998 including the house my husband bought in 1984. After he moved in with me it was rented for considerably less than $100 per week so it was negatively geared. By 1998 the rent was $200 per week. The $35K loan repayments were about $100 per week or a little less.

The house doubled in price twice over the 14 years – cost $54K in 1984 and we sold it for $208K in about 1998 to reduce debt and put the funds into our present PPOR, but if we had kept it the loan would be considerably less than $100 per week because the loan was P&I but the rent would be around $320 to $340 per week.

I wish we still had it, but children and lifestyle have to fit in with our investing, so we made the hard decision to take the profit and sold it.

If we still had the house we would have about $250 per week in our pocket from just that one house. That lazy $250 per week would more than compensate for several years of slightly negative gearing in the early years. So I am a great believer that holding long term can be a great strategy for huge capital gains and continuing income.

Wylie.

It all comes down (in my opinion) to why you buy, where you buy and if you can afford to buy. We are negatively geared, happily so. The tax cuts don’t make any difference to our long term strategy.

Our houses are all in good capital growth areas, rents are creeping up and we are “relaxed and comfortable”. I am sure there are overstretched people out there, though, and that is why it all comes down to the why, where and if.

Wylie.