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In 17 years I have had 12 investment properties and I still havn't found a PM that I am totally happy with.
We are currently building and renting a place and now I am experiencing what it is like to be a tenant. I'm now even more disillusioned about what a PM actually manages. I am currently in the process of getting my real estate licence as I am very passionate about the poor quality service delivered by PM's and I would like to improve the service currently being offered.
We have been in our rental property for 1 year now and these are the things that disappoint me:
– PM still hasn't inspected the premises, we could of caused significant damage by now.
– We rang two weeks ago about a repair (first time we have asked for anything) which is a leaking hot water system. It is outside and streaming out. I live in Toowoomba and water is very precious here, alot of water has been wasted. I rang for the third time today, had to raise my voice because the PM kept on talking over the top of me. The PM ASKED ME TO CALL THE PLUMBER!! I said no, you are managaing the property that is your job. The PM could not confirm that we won't be charged for the excess water bill. I'm fuming!! From what I've found in my experience PM's don't seem to have a system where they follow up the tradesmen. They send a fax, (1 per day usually) which is very easy to do through the "Console"software program to the tradesmen and expect the tradesmen to call the tenants, then they forget about it until the tenant rings up to complain that the tradesman hasn't been. By this time the tenant is not happy because it hasn't been fixed and the tenant has had to chase up the PM. Isn't a PM supposed to MANAGE the property?
– We are being charged $1.65/month for having our rent payment direct debited from our account as they employ another company (IP Payments) to look after the payment schdules. As a Property Investor I have been charged bank transaction fees for processing money. So the PM collects their commission, collects money from the tenant so that they can employ a company to manage their fees and also charge the Property owner a bank transaction fee. The PM is not managing the payments either!
– About 6 months ago I had a tenant in arrears, they owe me $800. My PM informed me that I had to pay $100 for them to organise a debt collector. So the PM dosn't manage this either!! I have insurance with Terri Scheer but it fell outside their obligation to pay.PM's don't manage repairs, payments, inspections, debt collecting and their is an extra charge if you need them to go to court. Apart from their commission cheque what do they manage??
bfree2live
Hi Will 2 Win
I have competed myhomework on kit homes vs project builders. I investigated construction of a duplex pair with ASK Homes. All costs with a builder was approx $400K (this includes all council fees, engineering fees, etc and duplex ready to live in) The ASK duplex as a comparison would be approx $350K. Still not convinced that the $50K saving is worth the time and effort of having to project manage the building procedures? If I saved $100K I think that it would be worth it.
Bfree2live
Hi Will2Win
Have you looked at ASK Homes website? I'm going through the same process at the moment, so will let you know what I find.
I'm 40, I love my job.
I've been investing in property for 17 years. My goal was to go part-time at 40, which I have done. My goal is to have the option of retiring from paid employment at 45. Unless the conditions in my job change too much I will keep working as long as I desire. Let's face it, it is very hard to get rich by working for an Employer. You are selling your precious time to them. Time is one of the few things that we truelly own. How much is your time worth? You just never know what is around the corner. I had trouble selling my properties to free myself. I had the mentality of trying to keep hold of everything, even when I was on unpaid maternity leave for 2 years. I ended up selling two properties when on unpaid mat leave. You can't put a price on watching your child grow up. I have just about sold all of my properties, one to go and then I will concentrate on more developing but with a lot less debt. I read Steve's book again to get my head around the fact that selling is not bad and now the more I sell the better I feel.
Real Estate has allowed me to free up my time and bfree2live, which is what I'm all about. I think retirement is about being able to have options in your life. Work if you want to, go on a 3 month holiday if you want to, raise your child, etc, etc.
Good luck to everybody trying to get off the hamster wheel of paid employment.
I just bought the Ford Festiva Econetic, diesel. Most fuel efficient car you can buy right now. I get 900km out of a 40 litre tank. ($50 to fill) My previous car was a Hyundai Getz and the fuel economy in my Econetic is twice as good.
If you wanted to buy an electric car you could look into solar power farming for extra electricity. A friend of a friend has just set up a solar farm, returns are very good. Looking into it myself.
Ardenvale Homes, Hugh Begg
Hi Ryan
Thanks for reply. It's great that you have worked out that time is SO precious at an early age. Took me quite a few years to work it out! Bit slow! (-:
We are loving Toowoomba, people there are so friendly and it is very child friendly. We have finalised our house plans and plans have been submitted to council and the surveyor is working on the subdivision for our land. Can't wait to get into more developing but trying to do things one at a time. (new concept for me!)
bfree2live
Ben, you are too funny.
I am sitting in a hotel room in LA by myself and have watched all of your You Tube video's. It has kept me amused for ages. Love the plasticine one and of course your proposal and I was laughing so hard I cried when I watched the cooking one. You are a natural, have you considered Hollywood??
bfree2live
Thanks Sonya and Byron
I picked up my new Ford Fiesta Econetic a couple of days ago. It is the most fuel efficient car on the market at the moment. Fits in with the sustainable, eco friendly life that we are going to create. It's bright green!
One of my goals in life was always to have a holiday house but decided to buy into the Wyndham club (timeshare) was always put off by the pushy sales people but some of our friends bought into it and we have been visiting them when they are there. We went away for the first time a few days ago. We stayed at Kirra on the Gold Coast, massive two bedroom self contained, renovated apartment with ocean views for $100 per night. Alot cheaper than a holiday house, less up keep and less stress! We bought a resale and saved alot of money.
Good luck with your investing Byron. Have you read Steve's book? Lot's of creative investing ideas in there.
bfree2live
I have been so disillusioned with Property Managers that I have decided to get a real estate licence and do something about it!………. stay tuned!
Hi NonnieE
Can you find out who built the house? Ask the builder if termite protection was done on the development. Get something in writing. If it was included, is there a warranty? Get a copy of the warranty. I built 4 units one year ago and it was part of the council development approval to have termite protection.
DIYPM
Hi Andrew
– Contact local builder for ESTIMATE of what you require. Allow another $50K-$60k per dwelling on top of builders price as an estimate. Most builders don't include absolutely everything in their quote. Read the fine print.
– Contact local council for DA requirements and fees for whole development. The answer will probably be very vague as there are more than one department who deals with a development. You will probably do the transfer merry-go-round.
– Contact a private town planner for fees if you don't want to deal with the council directly.
– Allow 30% extra money as a "safety buffer" on top of final prices.
– Contact a draftsmen for plan fees.
– Contact a surveyor for fees
– Contact an engineer for fees.
– Cost for demolishing building if any?All of the above are very hard to quote on a hypothetical. Alot of developers do a feasability test which involves getting the Development Approval and floor plans and getting quotes from builders after they have the floor plans.
I have done one 4 unit development. Had no idea what I was doing. Employed a builder who I felt I could trust and communicate well with. Choose a well known builder, don't get the cheapest. It is worth paying the extra for less headache.
I built 4 units in Toowoomba (west of Brisbane) for $580K which included absolutely all fees, just to give you a bit of an idea.
I have bought investment properties (still have them) in the past, done well out of them but I did alot better developing. If the figures look good, go for it.
DIYPM
Hi Kell
Advise the real estate agent what you would like to do and ask them for the appropriate wording. Or otherwise ask your solicitor.
DIYPM
Hi JimmyJ
I have bought an investment property with a holding deposit of $20. At the time I wanted to borrow 110% of the purchase price for tax reasons.
DIYPM
Hi S21034
It depends on your personal circumstances. Can you afford it if the interest rates go up? Will you be able to sleep at night or would you be lying awake at night worrying that the interest rates might go up?
With the global economy the way it is, the interest rates will probably be low for a while, also a good time to fix your interest rate at a low rate. You could always split your loan, have half fixed and half variable.
I have two loans, both variable. One of my loans was just under 10%, I was thinking at the time that I should fix it but I weathered out the storm and am now very comfortable. A friend of mine fixed their rate when they were high, now they want to refinance at a lower interest rate but it is going to cost them $25k to get out of their current mortgage.
How long are you planning on keeping the property for? Take that into consideration because there will be penalties if you sell and terminate your mortgage if you fix it.
Make a decision that is right for you and your circumstancess.
DIYPM
Hi Zaxolip
Find an accountant that specialises in trust structuring. I have a trust but find it difficult at times in getting finance as some finance institutes will only loan to individuals. There are tax benefits though and provides some protection.
DIYPM
1Winner and PropertyQuotesBook,
I had looked into renting out my properties as holiday accommadation but found it challenging to get short term holiday rental insurance and also when I rang the Office Of Fair Trading (QLD) they said that a holiday letting licence is required to do this. I even completed a profile on stayz but got turned off the idea because I don't want to do anything illegal. What are your thoughts on this?
1Winner, I think that it is a much better idea to organize a special rate with the local boat renter. On Stayz website there is a property (Gold Coast) that includes a car and a boat. This investor was featured in Property Investor magazine a few years ago. This invstor specialises in up market short term rentals and has 3 properties. There is also another investor on the Gold Coast who has 6 investment properties on Stayz website.
I also liked the idea that Stayz had with key lock boxes. You can buy them if you are a member through Stayz and also at locksmiths. You can use the keypad box to put your property keys in so that if your guests are arriving late you can tell them the password on the keybox and they can let themselves in. You can also use it for cleaners access. I'm into minimising my workload. Good luck, hope you are very successful.
DIYPM
Hi Matt
Good on you for having the initiative to look into property at such a young age.
This forum is filled with information as god_of_money pointed out. You could easily spend hours looking at information. There is also a list of recommended books to read on this forum. Read books (get them from the library and save your money) go and look at property and ask lots of questions, see a mortgage broker or go to a bank, ask questions. It might be challenging to get a loan at the moment, although I don't know your circumstances. Don't give up, you will find a way.
DIYPM
Hi Keiko
489.3 sqm. (including floor area, porch, carport) All units have 2 bdrms, ensuite and sgl lock up garage. Unit 4 also has a carport and a theatre room.
Also aaabbbccc, make sure there is no asbestos in the house or fences as it is very expensive to get it removed, or factor that into the cost.
DIYPM
Hi aaabbbccc
I'm not sure where you are located but I will tell you my story:
I had 4 units built on an 1100m2 block 1 year ago in Toowoomba, Queensland. (1.5hrs drive west of Brisbane) The building side of things including absolutely everything (council fees, etc) was approximately $580K. The initial purchase of the land is not included in this. I had a house on there which I rented out while waiting for everything to fall into place. When I was ready I sold the house , which was removed for $5K. I would of given it away as it was going to cost me $10K to get it pulled down.I employed a well known, respected builder in the area. He wasn't the cheapest but well worth the extra money. I chose this builder because he was easy to communicate with and answered my MANY questions thoroughly and patiently. It was my first development and I was very green and also pregnant!The units took approximately 6 months to build from the time the plans were put into council. I strata titled the units when completed which took another 6 months due to a few minor things (page numbering one of them!!)
I was told to allow 30% of the build price as a buffer in case things unexpectantly came up by my solicitor. Some things that unexpectantly came up:The surveyor made a mistake which cost me approximately $3K. There was a back retaining wall which was on a very, very slight lean toward my property and the council insisted that units 3 & units 4 be moved closer to units 1 & 2 which meant a slight variation in the plan. There was extra money for the electricity because the electrical company only provided the connection to the street, same for gas, $3K. There were a few issues with strata titling which cost approximately $6KI found it very hard to get finance for 4 units. I ended up getting a commercial loan at a higher interest rate. The feedback I received from the banks was that you can get a residential loan for up to 3 units. (so you will probably be o.k) Also the local council required one unit to be an adaptive disabled dwelling because I was building more than 3 units.I would do it again but I would probably stick with a duplex or triplex next time, until I find it in me to build a highrise! (-:
Find a builder you can trust and it will be alot easier for you.
DIYPM
