Forum Replies Created
When you move out and do the final clean, take A LOT of photos to verify condition, cleanliness standards, etc. Because once you move out and back to your PPOR, photos will be your only evidence of the standard you went to to clean the pretty on exit. Unfortunately, there are some landlords and PA's out there who make it their business to terrorise decent tenants and keep as much of the bond as possible. So do your due diligence, take your photos, and document everything. And good luck.
You might have more luck with a commercial vehicle, like a ute or a van. That's what we use at work so we get a full deduction, rather than have to use log books to justify usage percentages for sedans, and possible FBT consequences. Depending on the size and cash flow of you portfolio, your property investments could certainly pay for the car, but whether its actually deductible or not is another question. Otherwise, I agree with Dark Knight – there's plenty of older cars out there with low km's that still look fantastic and are cheap as chips to buy. My current drive is a 1996 black fairlane Concorde I picked up from the original owner for $3,000.
Hi Ryan, goodness me you are an early riser on a Sunday!!! Lol
I agree completely with your comment. I will often filter my RE searches by 'oldest first'. What initially may have seemed out of the question can come within the radar after a few months. Although I am now finding (in my town, anyway) that whereas 6 months ago, the 'old' listings of around 7 – 9 months have all gone, and now the 'old listings' are only about 3 months old.
Now the 'old' listings consist of stubborn vendors with over-priced property that has been listed with multiple agents.
Hi Sebastian,
No experience with Ironfish, but certainly had a few others try to get their sticky fingers in my purse. Anyway, at our early stage of the property journey, any knowledge is handy, even if its what not to do, or who not to listen to. <moderator: delete language>
Maybe if a seminar is 'free'' there is an ulterior motive? Like trying to sell you something? Just saying……
Cheers, Claire.
Thanks for your words of warning, Jacqui. I have forwarded your comments on to my accountant for his expert advice. Assuming you are right, I'll just defer the works. Problem solved.
Practical suggestions for bathroom Reno, anyone?
DON'T SIGN UP FOR ANYTHING!!!!!
even if you have to go with the lame excuse that you need to talk to your partner first and they are currently on safari in deepest darkest Africa and therefore not contactable by phone.
Hi Sinders,
What a lovely way to help out your son. Gotta love our boys.
Can I just add a word of warning for the legal side of your generosity? One thing I found out the hard way is that when you live with someone for two years, they then have a legal claim to ALL your assets. Including gifts from parents. So you need to protect yourself and your son from the unlikely (but extremely unpleasant) event where he and his partner split up, and the ex tries to get their grubby hands on your gift to your son.
The repayments should not be assessed as income – they are only return of capital if it is a 0% loan. However I would STRONGLY. suggest you have the loan drawn up as something that IS repayable, otherwise it could be construed as a gift to your son and possibly leave you and him open to the situation above. Talk to your solicitor before you do anything.
Terry might be able to help you further with the legal stuff.
Hope you get it all sorted so you and your son are protected, and you are able to help him out with such loving generosity.
Cheers, Claire
Hi Jacqui & Matt,
thanks for your thoughts on there options. Perhaps I didn't explain option 1 well enough – I don't mean I wish to buy the property and subdivide it in my super fund, as I'm now aware that is not possible if there is a loan against the property. The whole point for being subdividable is that once the property has run its useful life in my SMSF and there are better yield potential elsewhere, there is an 'out' strategy or two – so the place COULD sell to a developer for instance.
Jac, I love your answer to option 3 – it puts into words the suspicion I had. A bit like corporate fat cats who have got used to mum n dad investors putting up with 5% returns, so any excess profits go into their own pockets rather than returned to shareholders. I suppose I'm not too keen on buying any properties where potential for further development is already maxed. Like apartments or high density housing. Although there's probably heaps of investors out there doing very well from just this sort of property…..
Matt, also like your answer to option 3 – this sort of research is part of the 'fundamental' research as opposed to statistical, I think?
Hope everyone is having a great weekend.
Cheers, Claire
Sorry – just re read my post and checked the website – the button you are looking for is bottom RIGHT – not left.
let us know how you go.
PS I've used the property inspection. Template many times now and it's fantastic when combined with a good set of photos when you are inspecting multiple properties.
Hi all, I might be able to help.
1. Go to the propertyinvesting.com website, and on the home page bottom left, you will see a box called 'register my copy'
2. Clock on this, enter your details, and an email will be sent to you.
3. Check your inbox, open the email, and viola! There will be the link to the page with the bonus downloads. They are great!
hope this helps, happy reading. I loved the book and the bonus downloads.
Cheers, Claire
Congratulations to you and your wife. I know Charlotte will bring such joy and pleasure to your life.
Sorry Shahin – that was very rude of me to so quickly dismiss your feedback.
Given my previous comment about the market here, I would be most appreciative if you could point me in the right direction with maybe some more specifics in this situation.
Thank you for your input and have a great weekend.
Yes but it would probably negotiate the price up. It's under market. The only houses worth less are really crappy weatherboard or hardiplank that are probably riddled with asbestos.
Thanks for your advice, Claire. Building and Pest inspections will be scheduled for next week, so I definitely have further opportunity – love this suggestion. Also, vendors have agreed to access, but I will make sure it's in the contract as well.
And will be looking at more properties shortly, so any advice is still welcome and valid.
From one Claire to another – thanks girlfriend!
Hi Jotham,
Lots of good advice here from all these wise, generous and no doubt wealthy people.
You don't mention your age, but I assume you are in your 20's, given that you mention living with family, and don't appear to have any kids. So you've got a lot of time on your side.
for what it's worth (and its probably not much given I'm only a newbie) I'd suggest you just buy something. Soon. It doesn't have to be expensive, in fact, the cheaper the better. The less you spend, the less you can lose, right? And your knowledge trajectory will reach new heights as soon as you actually get truly involved and committed. I just bought my 2nd IP (first one bought 15 years ago, so I'm just about a …… again) last weekend for my SMSF and going looking again this weekend, also expanded search interstate. Now I'm committed, I've learnt more in the last week than I had in the last year (a big thanks to Richard Taylor or QLD007 on this site).
The house I have bought is a 3 bedroom brick veneer on a 600m block. It's in a regional Victorian town of 20,000 people with good infrastructure, and a rental vacancy rate of less than 1%. Rent is $235 per week. House cost $153,000. So it's cash flow positive. Its a good house for a good price. It's easily rentable or re-sellable. So even if it's not 100% 'right' strategy wise, it will do until I find something better.
And there's thousands of such properties around Australia. Good nursery school, I reckon.
At some point, you need to buy something. You may well feel under prepared, but you will learn very quickly once you get started.
Great to see you joining the journey, cheers
Hi Andrew, welcome to the forum. I'm just a newbie, but will get the ball rolling for you.
Firstly, my condolences to your partner and you on the loss of your Aunt. <Bouquet>
Secondly, what is the decision criteria being used to assess the property as investment? Is it just emotional at this stage? Although it sounds like you are running some numbers.
If the house is worth $500k, and your partner owns 1/3, this is roughly $166k. You should be able to quite easily get a loan for 80%, or $400k, and still have $66k left for expenses and perhaps a bit of a kick towards your next investment. I have plugged your numbers into a cash flow estimator, and based on an interest rate of 5.5% (Interest only loan) and management fees of 8.8% and rates/other of about $5k, and a depreciation allowance of about $4k, the property is cash flow positive. If, on the other hand, it is rather run down and needs some work in order to prepare it for tenants, this would significantly change the outlook.
Given that estates and succession and buying out other relatives can be fraught with danger, maybe another option to seriously consider is simply selling the house and taking the cash (I'm not sure of the CGT implications here – hopefully one of the resident legal experts will help out here). That cash could be used to pay down a big chunck of your PPOR, thus reducing your non-deductible interest amount. Then you could borrow the amount back, but as an investment loan or Line of Credit, and it would become tax deductible – provided you use it to buy an IP. This would save you about $750 per month on your own PPOR interest bill, and also reduce your tax. A double whammy of putting money back in your pocket.
As for renovating, have you ever done it? It can be very rewarding if you know what you are doing, and very disheartening if you THINK you know what you are doing.
My parting message is this: Investment grade properties need to be researched, found, analysed, negotiated and managed. I'm not sure that inheritance should be the sole decision criteria. But then again, I'm only a newbie……………….
Andrew, I hope all goes well for you whatever you decide to do. Keep us posted.
Doh! Stupid auto correct! I meant 'the harder you work……'
Hi Daniel and Jason, it's great to see some youth and enthusiasm here. I went down the education course,I have a BBus Commerce, worked for 3 years in banking (residential and commercial lending) also in accounting for 3 years. And farm financial consulting. I can analyse a P&L and Balance sheet in my sleep, work with lvrs, budgets, the whole lot. And still managed to under-achieve for 20 years.
What I didn't have was a mentor. And probably not the right focus. And definitely not a natural saver.
I agree with Claire's advice above – less courses and more work experience. Definitely find a mentor if you can. And work on your ability to save/budget – it's not sexy but its the fundamental basis of your ability to invest. You need to learn to manage your money one 0 at a time. Learn to manage $10 then $100 then $1000 etc.
Its also about practicing and improving your personal discipline. Learn to love delayed gratification. Sacrifice today for reward tomorrow.
And remember,bathe harder you work, the luckier you will be.
Hi kesiera, Have you read Steve McKnights books? They detail a strategy similar to what you are planning, and in a very profitable way. It's called vendor financing, and there's at least one forum member who is experienced in these sorts of deals. No doubt they will pop their heads in at some stage.
Cheers.
Hi guys, thanks for the feedback. I will check with my surveyor as to why its so wide. I've checked the council website (rural city of Wangaratta) but can't seem to find anything helpful, so will need to go back to the source.
Good suggestion to go down driveway side – that might help a lot.
