Hi,
I recently went into a Real Estate Agentcy and enquired about a house & land package, where the house will be biult soon on the block! ” So it’s buying of the plan really” – at this stage. Though the house will be going ahead and built soon anyway.The agent said it deppends on your Budget as to how much the property will be?
I guess i could have been smart and said, well, i would like the property to be Positive Cashflow and make $50 a week. Then make a buying price according to the amount of rent it will probably get in the area.
I know this house won’t be pos cash flow anyway but I’m inquiring about it for the interests of a friend. Who wants , just a nice brick house in a nice area to bring up a young starting family?
What are your thoughts about this. How would you go about getting a fair market value (if a RE agent won’t tell you).
I got the feeling he was waiting for some unsuspecting customer to come along with a higher then market value, budget, so that he could go “Yep” that’s great i will take all that money.
I asked him again during the conversation, “How much is the House & Land worth once biult. And he again said, it deppends on your budget really.
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Positive Cashflow Financial Analysis Calculator Onlinehehe Jaffa… you ask an agent how much a property costs, and he says “how long is a piece of string?” hehe- that’s funny
Maybe he’s doing that negative gearing marketing of “the property will cost you $30 a week (at the highest tax bracket and with depreciation allowances, and based upon a rental of $$ per week).” I doubt he’s suggesting that if you earn 100k, then the property will cost you 500k, but if you earn 20k, it will cost you 100k.
I reckon he’s doing the “this is how much it will cost you per week if you earn blah blah” thing.
He’s being a bit weird in not telling you the price for it. What’s he doing? Maybe he’s conducting some dutch auction. But that would be rare on a new property.
kay henry
kay henry
“I doubt he’s suggesting that if you earn 100k, then the property will cost you 500k, but if you earn 20k, it will cost you 100k.”
Well that’s right, i doubt he’s doing that. So he has to be really thinking i will wait for someone to offer X amount and if it’s good (which may be really over market value) he will say “Yes” that good we’ll sell it at that.
I guess i could say to him, Ok, you tell me how much it is and i will tell you weather i can budget for it or not.
It was a bit funny, i haven’t actaully heard of a RE agent saying it deppends on your budget but it’s the first time I’ve asked about buying one ‘of the plan’. Aside from that i said to him if you know of any positive cash flow properies, i would be interested in knowing.
Then i got out in the car and realized he does not even know my phone number or any way of contacting me [biggrin]. So he has no way of contacting me.
What sort of real estate agent tells you it deppends on your budget and then doesn’t take your phone number (shake my head).
I’d be very reluctant to ask any REA about ‘positive cashflow IPs’.
This is investor-speak, not REA speak. If the agent was smart, he/she’d know investor-speak.
But if you can find a dumb agent (who even tells you why the vendor is selling and that they think they’d take $x less than the asking price) then you wouldn’t want to alienate him/her with our lingo.
You will have researched rents in the area, you will know approximately what rate of return you want, so why not make it simple, just giving an approximate price range (after checking previous sale data to demonstrate it’s realistic)?
Regards, Peter
I recently went into a Real Estate Agentcy and enquired about a house & land package, where the house will be biult soon on the block! ” So it’s buying of the plan really” – at this stage. Though the house will be going ahead and built soon anyway.
The agent said it deppends on your Budget as to how much the property will be?
Funny, Jaffa!
Would the agent perhaps mean that the house is still to be designed, and that it is up to the buyer whether he/she wants a standard/basic interor design, or a more fancy one.
Or perhaps luxury thingies like gold-plated doorknobs, taps and towelrails instead of plain ones?
I dunno- just guessing))Celivia
Hi Jaffa
I think youd better start up a new thread on “funny agents stories”
See how many you get…Heres one from last week.
Met an agent, hes new in town, looked at a couple of properties, both overpriced. He did the trial close… “so waddya think, you interested in either of them?”
I told them they didn’t stack up as for me an investor…the rent return was not there.He said “whats wrong with the rent return…ALL the properties in this town a positive geared….the rents greater than the interest on the loan so its positive geared”…..HUH ????
Rent vs interest is now the determining factor???
I suggested to him that the more common approach was to use rent return on asking price to determine the YIELD.
But he said he always used rent vs interest cost..and had never heard of my method.I thanked him and left …quickly….
He is trying to resurrect a run down agency..I reckon 6 months max at it will all be over.
KP
Hi Jaffa,
I wonder about this scenario and ask (and this is not excusing this agent’s ‘attitude’) but is there a possibility that you came across as a ‘timewaster’ – it may be beneficial for you to consider this aspect of this interchange as if this is partially the case you could be missing out on the ‘good deals’ if agents are reading you as a ‘timewaster’.
Just a thought for you to contemplate.
KP – I think you’ll find your experience is not that unusual – given as recently as three/four years ago only 20% of Victorian REA were also property investors – property is analysed slightly differently by investors as it is by home buyers.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by kp:Hi Jaffa
I think youd better start up a new thread on “funny agents stories”
See how many you get…Heres one from last week.
Met an agent, hes new in town, looked at a couple of properties, both overpriced. He did the trial close… “so waddya think, you interested in either of them?”
I told them they didn’t stack up as for me an investor…the rent return was not there.He said “whats wrong with the rent return…ALL the properties in this town a positive geared….the rents greater than the interest on the loan so its positive geared”…..HUH ????
Rent vs interest is now the determining factor???
I suggested to him that the more common approach was to use rent return on asking price to determine the YIELD.
But he said he always used rent vs interest cost..and had never heard of my method.I thanked him and left …quickly….
He is trying to resurrect a run down agency..I reckon 6 months max at it will all be over.
KP
Hey KP..
Ask him what about ‘holding costs’of rates etc..would soon make it -[biggrin]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Jaffa,
This agent wouldn’t happen to be associated with Country Direct would he? I went to have a bit of a look at their new estates in Leeton and Griffith and it sounds exactly like the answer they gave me when I asked about their prices. I know that there are several agents associated with them, one in Griffith (who sold them the land that they have now subdivided and started to sell and develop) and another here in Leeton.
Country Direct are a new group that do their own subdivisions, market them, design the houses and hire the contract tradesmen who build the houses AND provide finance to anyone who wants to buy into their new estate. They seem to have TOTAL control and would not give me any indication of what prices, designs etc were available unless I was willing to sit down and provide all of my financial details to one of their staff so that “they would then be able to show me packages that I could actually afford – saves everyone time and dissapointment”… Yeah Right…
I didn’t like the way that they do business and I just walked away. Anyway, was it Country Direct or some associate of theirs Jaffa?
Cheers
SonjaMy brother rang me the other day to ask me about a deal an agent had told him about.
A builder had two display homes that he had built and was now selling. The headline on the deal was the builder wanted to lease them back for 3 years and pay a whopping $30,000 pa rent. This area averages more like $12,000pa.
Sounds good until you looked at the purchase price which was about $100,000 more than a comparable house in the suburb. But hey if you want +ve cashflow I can give you the number! [biggrin]
Cheers,
GregSonya, To my knowledge there not part of the agentcy in Griffith, Griffith that’s the drug capital of Australia (least was?) your bound to find a doppey agent there. Alony joking. It’s a Stockdale agent that said about the budget.
He said “whats wrong with the rent return…ALL the properties in this town a positive geared….the rents greater than the interest on the loan so its positive geared”…..HUH ????LOL the experiences you can get in really can be funny.
If the agent thinks i’m a time waster, then he’s entitled to think that. Maybee i go into agentcies to waste the time of day sometimes, but it’s all directed at learning, staying in toach and a common goal, to purchase and buy and deal with Real Estate. So an agent considering that i am a time water is pulling the wool over his eyes, and wouldn’t be to his best benifit to do that.
It was a serious inquiry on behalf of someone who wants to buy a family home.
20% of Victorian REA were also property investorsThis is so true. I don’t know how many agentcies don’t seem to know about investing. They seem to approach you with confidence, then when they know your an investor they sort of stop and it seems that because they know your an investor they just stop and expect you to know everything.
The most common answer i get from a real estate agentcies when asking about any positively geared properties in the area, is, “they are hard to find”.
Celvia, Good Thought!!
Would the agent perhaps mean that the house is still to be designed, and that it is up to the buyer whether he/she wants a standard/basic interior design, or a more fancy one.That’s curtainly viable, though he didn’t say that that was the reason for saying it deppends on your budget?
I should take it as a challenge i suppose and work out how much i think it’s worth. With out investigating to much i would estimate between $240,000 and $290,000. I had a look at the plan and it will be a fairly big brick house with all the trimmings and in a nice residential cresent. Ducted heating, biult in walk in double carport jioned to the house, open plan. And it’s going ahead to be biult so they must know what the design will eventually consist of.
Hey Redwing,
I didn’t want to go there. No victory in winning a lost cause.
We were already at the stage of having a swinging dick competition……we weren’t discussing the property anymore, just trying to out argue each other for the sake of it.Dereks’ got a point…I guess the average agent must hate a number crunching property investor…in fact they probably DO see us as time wasters.
Its all in the right brain / left brain thing…In agent school they tell you to “paint a picture” with the words you use ( appeal to the buyers emotions ) whereas as an investor you use the other side of the brain ( analytical, logical ) to crunch the numbers.
SO if you don’t meet up with an agent that can do the same, then probably a defensive reaction, or conflict will be the result.
KP
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