Forum Replies Created
I give the walls a light sand and use ‘No more Gaps’
I love the Web Site. I have not read the Book but tend to agree there is a place for positive cashflow properties in a property portfolio.
But I too agree that $1200 is a bit much. ($1200* 200 people = $240,000). It must include airfares and accomodation somewhere. It sort of is Henry Kaye ish.
I would have thought more along the lines of $300 would be more reasonalbe. ($300 * 200 = $60,000). Even then I cannot see how you need so much to cover overheads for a one day session.
Just my 2 cents worth.
I have only been investing for 7-8 years and always used fixed rates, mainly 5 yrs. The Bank has always won. So I would love to hear other opinions.
I dont have any rural properties, but from what I hear the key is to invest in regional towns and research population trends etc. So to sum up – make sure you know the AREA well.
Thats why I have been insular and only invest near home. I know that area and I know it will serve me well.
I would keep on the property managers back. Even if the property manager has left keep at the estate agents till your situation is rectified.
Does a lack of replies mean the bank has always won on a 5 year fixed rate?
if its $600 now. What if in 3 yrs interest rates have gone up 2% and you have not experienced any growth and the place looks a little tired and you’ve had a few tenant hassles that along the way.
Is it still worth it?
Good Question. I would love to hear responses to this. For mine its not worth the hassles if there is very little capital growth.
daaj10242
You said
<<<<Me with 10% deposit and 20% yeild.(Just showing of)>>>No that I dont believe you.
What is the rent?
What was purchase Price?
Residential or Commercial?
What is Area (City, large town eg. Ballarat, small town or drive through town ie main st is 300m long)? (Optional)How and when did you get that rate? Well Done
Westan. As usual you make some good points. This is now 2004 not 1997. What was attractive then is not attractive now. I have still invested in what I believe are quality properties but not so called rural cash flow properties.
I dont have much time to look and interest rates are only go one way. What does one do now? Thats what i need to decide?
yes. its good that you have started early and learnt the benefits of real estate investing. You have time on your side. Do it right so you dont get sick of it and never do it again.
Do you really think now is a good time to invest in real estate? do you really want to have properties miles away from home and have the management responsibilities of those.
Finish your education. Thats what will allow you to generate your income. its also something to fall back on. Have meetings with your friends and discuss property investing. But do not OVER commit.
Find a mentor. There are many people out there happy to help. Your main focus should be your education then property investment.
Yeah and dont forget to have some fun, have a few drinks and do a bit of travelling. Your so young
Yeah. thats normal. they really want you to sign the contract. getting the deposit later is ok, as long as you have signed. If you had said i will sign on monday. they would have come down hard on you, they want the sale contract signed.
Thats what agents are like. They build you up to get the job of selling the property then they condition your price expectations down.
Go check out jenman.com.auShould be some interesting reading for you. Even worth reading his book. I enjoyed it.
Westan
I did commerce with an accounting major. Now working for a US software company as a sort of systems accountant. I suppose i know enough economics to be dangerous and worry the hell out of me at times.
But i suppose it has not really helped in property investing.
I saw the property market in nthrn california in 1999 but that was probably fuelled by migration into Silicon valley and I thought the same could happen here.
The old man was also a builder, so I got to see a few things he did and many things he should have done. But thats the past.
I bought my first investment property in 1997 and really had not heard about positive cash flow investing. I knew it was possible back then, because I heard of many stories about people buying $60k houses in Nth frankston (Pines). But these properties had their problems of bad area, tenants and no capital growth. So i never invested there.
But now I am worried that many people are buying in these type of areas thinking they are making a $1-2K postive cash flow investment. They will be in for a shock when interest rates rise, tenants leave or cause damage or the bathroom/kitchen is so bad that you need to spend $20k on a $120k investment just to get tenants in. And 5 yrs down the track your still only making a $1-2k return on all your efforts. Not to mention the distance of travel. I dont know about you but I find it hard to sit at home while a property is on the market unoccupied. I am proactive and go to the property is see what else I can do to make it more presentable. There is no property manager out there who is going to do the small things that count.
I am a firm believer in the Jan Somers idea of investing. I invest near home. I know I have good quality properties in good growth areas. I can support these properties and a few are now self supporting and I get a great tax refund every year. As rents rise, so too will my capacity to invest more.
I have no time for financial advisors. I saw one about 2 yrs ago. Cost me $550. All he said was your into property too much. Invest whatever your comfortable into managed funds. I bought another property instead. I think I will go see him in 5 yrs. I am sure he will live in the same house.
My next venture is either a holiday house around Mansfield or rye/sorrento.
Cheers
Andrew
Yes – I agree. Everyone has a VESTED interest in something.
Even the owner of this site has a vested interest in getting people to his seminars (at $1000) eventhough the property opportunities are not there like they were in 1999 when he started.
Real estate agents need buyers – so they say now is still a good time to buy. Share Brokers and financial advisers have a vested interest in commissions so yes its always a great time to buy shares.
Maybe I too have a vested interest. As a property investor I want prices to stay as they are or even go up.
Thats why I like to know a little bit about the background of someone and where he/she is coming from.
I like looking at facts and the fundamentals. We are in a historic growth pattern. Property prices have risen very high. We have historically low interest rates which has probably driven up property prices. Can this continue? Who knows? If the economy picks up(and there are signs it is), then interest rates must rise. If interest rates rise, then historically property prices go down.
Im my opinion (for what its worth) I am sitting tight and consolidating. Why – because thats what the facts suggest to me. (maybe those years of economics classes are starting to pay off).
I may be back in the market in a year or two.
Its only worth what income you can get for it.
The old risk/return scenario. What is the likelihood of achieving the council proposition or hotel option.
I doubt, unless you have a decent deposit and can support the outstanding loan with another income and security, you will not get much of a loan from the bank for this.
For the bank – this sounds TOO risky.
Yes, you can do this if you have equity in a residential property. You can use the residential property as security and borrow at a lower rate for a longer period of time. But its mainly based on the equity you have on the residential property.
I am in the exactly same position as you except I have a little owing on the PPOR.
I have an income to support the shortfall and am satisfied that I have capital growth properties.
There is one property that I have that is a drain on cash flow and if I got rid of that my portfolio would be neutral. But this Unit is in the best street of a beachside surburb of melbourne about 18-20 kms from city.
In the long term it will be a great investment. I have had it 2 yrs with the same renter. Sure there may be some short term pain but I dont really want to sell and look for rural property that may be cash flow positive and incur all the hassles. Its the capital gains I want.
When I am closer to taking it easy or semi retiring, then I may adjust my portfolio for cash flow positive properties.
I hope this helps.
ctl
Commecial property is very difficult to get into first up. As a newbie maybe you should focus on residnetial first. Get some equity then you can purhase commercial property. The rules are different. Better returns on commercial but not as much capital growth.
