Forum Replies Created
I need to clarify. I dont buy in cbd. I dont advocate that. I buy in the surburbs of a city near where I live. If I had $250k to spend I would prefer to buy a 2 bed unit in the surburbs of Melbourne say Mentone and not in a rural town.
If I had a little more like $350k then I would prefer to buy a house in the surburbs of Melbourne like say Aspendale, Mordialloc or Parkdale.
My rule is to invest close to home, close to what I know and close enough for me to monitor. Its my money and I want control.
<<<100k to charity>>>>
I missed that part? Maybe I got distracted by the kids. Whats going on there?
The doubts I have about the Investors Club are that the properties may be overpriced and these overpayments can be hidden in a boom property market we are going through now.
In this months newsletter my worries are confirmed a little in the article “My Inbox”
Let me quote.
“Thank you The investors Club – $111k – indicative 47% capital growth in two years! We purchased in Jan 02… – our first property purchgase and, if you remember, we had a problem with the initial valuation – came in at $197K..but we went ahead…
Troy insisted on a second valuation done by the bank and it came in at $234k.”They paid $242k.
A recurring theme amongst the Investor Club newsletters is that banks are not good valuers and always value the property for less.
I reckon if you want a Qld property, go buy your own. If you need to have your hand held then buy through the investors club but PLEASE understand you are really paying for their service. Its not free like they suggest.
Just my thoughts and I have been to a few meetings and received their monthly newsletter for about 3 years now.
Your finders fee of $10k ($105000*10%), then turns a positive cash flow property into a negative geared property. I have trouble finding a tenant in a great 3 bedroom townhouse in Sth Frankston for $160 a week. I dont need the hassle of a rural tenant for $170 per week.
Good Luck.
This is not for me.
Thats a similar yield you would get in a city. And you have better prospects for Growth in a city. If you have $250k for another property I would look for a unit or something with growth prospects in a city. Dont put all your eggs in the one basket.
If I had $400k to play with, I would sell the Bathhurst property and look closer to a major city. You gotta decide – do you want growth or Ve+ cash flow. That property you bought does not sound like ve+ to me and I have doubts about future capital growth. But please bear in mind I know nothing about Bathurst and Forbes.
And another thing – have you read any Jan Somers Books. If not, please do so. Ve+ is not the only way to skin a cat.
Just my thoughts.
Sounds strange to me, but I dont have any rural properties. Mine are only in surburbia.
Ask them why?
I love reading articles about income growth. As incomes go up so too does property as you need incomes to support property price increases.
It also means people can pay more in rents. As a property investor I want my share.
The other thing I like about income growth is that as my income goes up I can borrow more and previous purchases do not look so daunting compared to my income. eg
2000 Property A Loan = $220k Income $70k
2004 Property A Loan = $220k Income $85kThe bad thing about income growth is the prospect of increased interest rates. Cant have it good all the time I suppose.
Put all the cash you have in your PPOR, then when you are ready to buy an investment property you may be in a position to borrow 105%.
Your bank will know how much you can borrow.
I saw the piece on TT.
I was a little confused. Some have done it in 6 months. But thats holding real estate worth $1m not actually having $1m equity.
When does the program actually have a MAPPER having $1m equity?
I see that your down to 13 people. Investing is not for all but we understand that.
I will cheer when a Mapper has $1m in equity. I dont care if its in 12 months or 3 years. Go Mappers.
Which one were you Wilandel. The one who bought a house for $20k renting at $100 per week?
I dont see any down side then.
But if my employer pays my rates for a property its subject to FBT surely.
The problem must then be in whose name is the property and how does it get financed. Companies have their own problems getting finance and would rather use borrowed money growing their business than investing for staff, unless I suppose its staff they CANNOT lose. And then in whose name is the property – the staff member or the company.
Interesting concept though.
I also had a look at your web site. How are you guys paid for your time. Via an hourly rate or package rate for time spent with clients or via commissions on properties sold. I think you should add this question to your FAQ.
That must be why they can share commissions between buying and selling agents.
Sounds good in principle. There are also FBT considerations to be bourne by the employer. Good luck.
I understand that in the US, real estate agents act for both the vendor and buyer. They basically work for who ever comes into their office. If a seller comes in they try to sell for the best price.
If a buyer comes in and says I want a 3 bed home, near schools, etc etc, they find the home and I understand its normal practice in the US to share the commission between the buying and selling agent.
Here in Australia Real Estate Agents basically ignore a buyer and only offer them what stock they have. In the US a real estate agent will endeavour to find what a buyer really wants.
I reckon our system stinks. How many times have you as a buyer been shown a property that has nothing to do with what you wanted.
If Agents in Australia made money out of buyers too (eg. share comm on a purchase) then we would all be looked after.
Agents acting for buyers do the leg work for you and only source properties you want. They are prepared to do it as they earn a half commission on your purchase as the commission is shared with the vendor agent. I suppose agents really will only act on your hehalf if you are really committed to buying a place.
Thats another reason agents in the US dont have the glossy shop fronts that we have here.
If thats the case, then surely its just a short term problem. I believe in market forces and eventually the market will determine the rate when supply = demand.
Presently you have a Big Supply of office suites.
Malachii
I tend to agree. I dont really think long term Avalon will succeed. I would have thought that there was still plenty of room for Tullamarine to expand.
The free parking is maybe the only thing that appeals to me. We live in aspendale and Avalon and Tullamarine are similar distances.
I also have my doubts that jetstar will last in the long term.
Mine is Frankston. They are now tendering to build the Marina. They have started to beautify the beach and there is now a restaurant at the life saving or yacht club (I’m not sure which one). They are building the movie cinema complex and there are many plans for 10 story unit developments in the CAD (central activities district). The development is only started and prices have already exceeded my expectations. Yes, i do own two properties/units in Sth Frankston. They are almost worth as much as my Mentone units.
I still expect alot more growth.
Redwig
I have bought and read one of her Books. I have the following issues with Margaret Lomas and her strategy.
1. She has not been investing all that long, probably less then me. I alos had the impressions she has less properties than me.
2. I have considerable doubts about her strategy of targetting new homes to take advantage of the buiding allowance and depreciation benefits.I prefer to pay for something older that looks a little tired and can be painted on purchase and renovate kitchen and bathroom 3-5 yrs later. That way you pay less now and 10 yrs later both properties are worth the same. Its like buying a new car and second hand car. After 10 yrs they are both worth the same.
I reckon (but dont have any scientific proof) that the interest you save is more than the deprn benfits in the long term and after 10 years both properties are the same.
Markpatrick
There ia a book by Peter Spann. I cannot find it now so I cannot quote the name of it. He did what you suggested, buy renovate then sell. Some came up to him and asked what he would be worth if he had kept them all. Thats when it dawned on him that he should keep all his properties. He was able to reflect that ones he sold for $150k were now worth $300k etc. So now he buys, renovates and holds. He uses the increased equity in his portfolio to make his next purchase. Over time the older properties will be ve+.
Others
The think I liked about the book was the different stratgies. I would like to implement most of them. eg borrow for growth, some Ve+ cash properties, renovate and develop PPOR, maybe some property development of existing properties and maybe try some commercial property.
Yeah i got a couple of ve+ cash flow properties you can have. They are normally worth $150k but to make it even easier for you – you even have em at $110k.
Just tell me if I can make it even easier for you. Maybe I could do your assignments and sit your exams as well.
BIS Shrapnel issued a report last week where they expected prices to increase 9% in Melb and Syd over 3 years. So its effectively the same as inflation. But its better than a slump.
I tend to agree with their analysis.
I got this report from a post in this forum.
Its hard to put a $ figure on it. I have a long way to go yet. I still need my day job and I would love to be in a similar position to westan where I dont need to work for the boss but for myself.
