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Here's our view on adelaide:
http://www.creativerealestatesolutions.com.au/cgi-bin/page.cgi?id=112
And yes, it is the ONLY place we are buying properties in
By exit strategies I mean what would you do if the student accomodation scenario does not work. You need to be able to afford to hold the property on a normal rental yield so you need to know what it's market rent would be.
Or you need to work out your profit target if you need to sell.Exit strategies are different for everyone.
Clauses are great when you have something specific you want to be protected from but never use clauses just in case…
Remember that the best deals are obtained with unconditional cash offers! It comes down to knowing the market well enough to assess you own risks
Have to admit that it feels good to go shopping look at what we want and not even consider the prices.
I don't cook or clean at home that's all taken care of (I hated it anyway!) and have kids in top private schools.I can't stand TV and don't have one of any sort in our house, money aside I don't think the trashy media deservs my time.
Cars don't mean anything to me if you gave me 2 cars an expensive one and a cheap one both in good condition, I would not be able to pick the difference. I memorise number plates of all my friends and families cars because they all look the same to me! I can't justify spending over $20K on a car when it looks just the same and does the same things as any other car!
I don't understand why people want to run out and buy a boat because they can??? These were people that were not into boating previously, is it one of those status symbols? How about buying a racehorse? I'm not into any of those things so wont spend any money on them!
I don't like holidays, my previous job involved alot of travelling, I'm over it! Unless it's somewhere like the Canadian Rocky mountains or natural scenery, which I have seen already, I'm not interested in seeing cities, they all look the same (like cars).
So there you go, no plasma TVs, no expensive cars, boats, holidays etc, but are we living the life we want? Absolutely!!!!
To me having a boat, a TV and the stress to pack up and go on holidays just to see "culture" would annoy me more than anything else and reduce my lifestyle.Yes, over 20 times now!
Be careful though, I have seen rents imporove by $300 per week profit and I have seen them decline due to increased vacancies. Remember that renting by the room is a "tool" to be used in the right circumstances and just like you can't use a hammer for every job, it cannot improve rental yields on every property. The property needs to be in:
A lower rent area (if you can get high rent by traditional means, why bother?)
Close to universities and facilities.
Have more than 3 bedrooms (if you are going to go throught the expense of furnishing and providing utilities why not go for the max number of tenancies allowed by council regulations?)
Be in great condition (run down houses do not rent well by the room!)
Also, you need to have a good exit strategy if it dosent work out!You can do that with commercial because there are no government authorities telling you what to do and everything can be negotiated between tenant and landlord and their solicitors.
Unfortunately with residential leases, there is something called the tenancy tribunal which writes all the laws and takes the flexibility and creativity out of structuring leases to anyones advantage. The method you described is actually illegal according to the current residential tenancy laws. The rent paid needs to match the lease!
Correct!
How are you incurring bank charges and accounting fees if you are not using it?
Do you have properties purchased by the trust?I personally wouldn't have it any other way and see the costs as small relative to the benefits!
Thanks for that
Some great stuff there!!!I don't know if I will be reading the book on mum/dad real estate investing techniques written by an American real estate agent though, sounds like a try-hard attempt by an agent to describe what investing is all about
sometimes there is a need to hold properties in high growth areas for capital appreciation benefits. These properties tend to be negatively geared and can be balanced with positive gearing from other properties in your portfolio.
Now to WANT to make your property negatively geared???? That's like asking when would you WANT to delibrately lose money on an investment strategy. MY answer ……………….NEVER!!!!
I got a REA license in October last year and my business partner and I started our own company. No franchises and no learning from sharks that only know one selling strategy. Being Dishonest!
We are now listing both sale and rental properties faster than the name brand agencies and big franchises. We have never lowered ourselves to cold calling, door knocking or bothering people in any way shape or form.
The trick is to be honest (not desperate) and to have a good knowledge of what people want. The big bonus for us is being able to speak investor language. If you know how to be an investor, then there is NO COMPETITON! Other real estate agents will describe something as a great investment then list the features of the property and not mention anything about why it is a good investment. This happens often!
If this is your competition, and you know something about investing, then you will have a winning business.Good luck!
Whether he is a shonk or godsent depends on your attitude. $4000 spent could mean that you are set for life or it could mean that you just wasted $4000.
I don't agree with the above comment that this forum delivers free information, there are many posts answered by people with no knowledge or experience in the area giving "free" advice that is speculative and based on opinion rather than fact. Some posts even relate to things that are written in black and white in real estate legislation and people unknowingly give "free" advice about things that are not even legal. It's a fun forum to discuss things with like minded people but be very careful about taking advice. Free advice can be the most expensive!
Back to Jamie, he sells knowledge!
Knowlede without action is just a waste of money.Writing call options on shares (or properties) is a BUSINESS it is not something you can do in your spare time. Like any business it can be a complete success or it can be a disaster. Like any business it takes time to master the skill, it takes capital to fund the business and it takes alot of money in mistakes before you get it right. It is not a hobby!
I know 3 successful traders making over $800,000 per year. All 3 have a similar iron discipline, focus and have created their OWN mathematical strategies that work for them. All 3 have lost money in the begining. All 3 have a huge trading capital so small wiggles in the market are not going to wipe them out.
I know 50 others that have lost money and given up. This is not 21st accademies fault it is the fault of the individual.
Before doing a full course on call options may I suggest buying a book called trading for a living by Alexander Elder. It talks about trading psychology and will drive the point home that it is not as easy as jamie makes it seem it is a business to be taken seriously.
Just remember that not everyone that joins a gym will become a professional body builder, most will not, but those that have the desire and persistance WILL!!!! (that's not a reflection on the gym either!)What about a rent to own?
They can lock in the capital growth while saving a deposit towards the property.
They have a paper trail of regular payments towards the purchase
Looked at more favourably by lending institutions and they get to live and rent the house they will eventually buy. That means that any improvements made on the house belongs to them not their landlord.We have 6 options being excercised these coming months, all tenant buyers have built in equity even without owning the properties all they have is an option to purchase. Due to the inceased market in SA, and because they locked in the price, all have done better than people who are just waiting to save a deposit while they are renting.
Doing it yourself is going to give you the best profits and results. Knowledge in property development is not innate, no one was born with it, it is all learned but you need to put in the time and effort.
This thread or this website is NOT going to give you the answers you need to know to get started. If it was that easy everyone would be doing it!
Start with the council and a mortgage broker about getting a development loan to fund it. Speak to council planners and drafts people that have put these together before.
You need some feasability studies. Get it all on paper and see if you feel comfortable with moving ahead.
It's not rocket science but I don't think anyone is going to come and hold your hand, you need to put in all the hard work!It's just a fancy (or complicated) way to say "10% gross rental yield"
It made a good story at the time but 10% yields in todays market are generated by creative strategies not purchased from newspapers!7-10% of gross rental is reasonable but you need to consider other costs:
some charge for showing tenants through properties
some charge a "letting fee" for renewing the lease for the same tenant
some charge a "letting fee" for taking on a property with an existing tenant although they had nothing to do with the letting!
some charge for drawing up leases, inspection reports etc….These can all add up to 15 to 20% of your profits so they need to be factored in!
The value is in the land. I would definately be looking at free standing houses, they appreciate more in value (on average) and you can do more with them.
Hi George,
Sounds like you are in a great position to purchase. If you contact me [email protected] I can recommend a few mortgage brokers in Adelaide that we use.
I would try the Northern suburbs to stay within your price range. West suburbs are already way abouve $300,000.
I wouldn't touch them personally. The only new houses we have in our portfolio are the ones we have developed ourselves.
New houses don't offer any "value add" benefits, there is nothing you can do to improve the valuation straight away. You cannot develop, subdivide, renovate or do anything else to add value.Ever wonder why people selling new houses push tax benefits and depreciation so much? That's all there is!!!!
They also tend to be overpriced when compared to the "median value" for the area so capital appreciation will be much slower!Personally I also have a preference for brick, sandstone and character, I really dislike the modern rendered look and cheaply built brick veneer!!!
In SA the course takes 4 days and there are no license requirements. Becoming a mortgage broker is not the be all and end all. The real question is how easy is it to build a successful business out of mortgage broking? What contacts do you have? What unique or creative ideas can you bring to the table? The best mortgage brokers I have come across are developing and trademarking loan products that are unique to them and offer a service above others. Most also specialise in specific areas like construction loans, multiple investment loans etc.
These are probably more important questions than how easy is it to become a broker!!!
