Hi. My name is Chris and I am 17. I am interested in property investing but am not yet working and am still in school. I recently come across an advertisement in a boat trading magazine for the sale of a marina berth. They were asking $69000 for it, while it returns $220 a week. To me that seems like a healthy return. Does any one know anything to do with the purchase, costs, implications or anything else relating to marina berths that could make the return not as attractive? Also what sort of financing is involved in this sort of purchase? I have told my Father about this and he is interested in checking it out. He just wanted any views or knowledge anyone may have about marina berths before inquiring. Thanks.
Wow. That provides a good solid return! Good on you for finding a great deal, esp. at such a young age!
There are a couple of downsides to berths, first off I’m unsure of finacing , the second are fees (do they charge an advertising fee, mgm’t fee, or any gov. rates/fees?)
And third is the vacancy factor.If you can borrow from your parents equity from their house it could be an excellent deal! I’m sure you be making clear at least $70 p/w!
Fantastic!
Rgds.
Lucifer_auAs Lucifer has suggested I would imagine that finance may be considered (if at all) along commercial lines and as such a greater input of equity and/or cash may be required.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by cbarlow:Hi. My name is Chris and I am 17. I am interested in property investing but am not yet working and am still in school.
Hi Chris
Congratulations to a really turned on 17 year old!! I predict you will go very, very far as long as you keep doing your research, ask ther right questions, read stacks of books, and get yourself to a couple of recommended seminars.
Re your question on the marina, you need to find a Mortgage Broker experienced in finding finance for Marina Berths (maybe you could try running a small advert in the boat trading magazine, or for a quicker response PM a few of the +Cash Flow savvy brokers on this forum).
6 months ago I tried to source finance on a serviced apartment near a Marina in Mandurah, WA (a bit like Noosa Beach here in Qld). The resort was 100m from the marina and gave brilliant returns (comfortably met the 11 second formula). The bad news was that financing it was virtually impossible. Most banks wouldn’t touch it at all, or were only happy offering 50% -60% LVR (Loan Value Ratio, a simple rule of thumb banks use to tell you how much they’re prepared to lend you on any property).
A great website I’ve saved to my Favourites re LVR’s in different locations around Australia, go to:
http://www.pmigroup.com.au/LocationWizard.asp?This site probably won’t help you much in this specific instance, but is a MUST for your future “due diligence” research on every deal you do in the future.
Why are the banks so reluctant to finance serviced apartments (and I imagine it’s the same with marina berths)? Because usually a management company stands between the bank and yourself as owner. If you default, it’s much harder for your bank to enforce a Mortagees Auction on you to get their money back. Banks are used to having ABSOLUTE POWER over you and me, and won’t brook any dilution of their control. Hence they steer clear of financing serviced apartments (not sure if this applies to marina berths)
If you have cash, you may be able to turn this to your advantage in your negotiations with the berth’s owner (they’re often so desperate to sell, they’re quite happy to leave 20%-30% as a 2nd Mortgage carry-back into the deal. This helps you make up the cash shortfall if the bank will only lend you around 50% -60%
If it’s any help, I did find a WA broker who was able to get me 80% LVR with a local credit union who was comfortable lending on units in their local marina because it was a significant local landmark. PM me and I can send you his details. He’s good value to talk to, regardless.
Cheers
GregHi again Chris
I hope we didn’t scare you off by getting technical on your simple request. Don’t you DARE get intimidated just because we happen to know what we’re talking about. That’s the whole point of this forum. We NETWORK with other movers and shakers, and NO AGE OR INCOME is too young or too little to get into property.
On my part, I got technical out of respect and admiration for you and your intelligence in knowing that a $69,000 marina returning $220 per week is a great return. I assumed you’d read Steve McKnight’s books. What other PI books have you read?
Whatever you do with this particular marina deal, don’t EVER give up on your voracious PI reading habit, nor your weekly savings habit. You’ve started out on this journey much younger than most, and you’d be amazed what a 17 year old school kid with NO JOB, NO MONEY can achieve if you have enough drive, determination and the guts to network with people who are really “doing it, not just talking about doing it”.
Post a reply, okay?
Cheers
GregHi Chris,
I found myself in a similar predicament at the start of this year. I am 21 and have only been working full-time for 7 months. At the time that I started looking to purchase property i had only been working for 2 months full time and had only recently graduated uni. It was a fairly daunting step, but as far as finance goes i recommend you speak to someone like Mortgage Choice. They can provide fantastic advice on these matters. They work for free, will come to you, and since they get their commission from the banks (only once your loan is approved), their best interests lie in securing a loan for you (make sure you do your own research though). I now own my own home (which im renovating) and am looking to purchase more property. I didnt have a deposit and was able to get around that with some good advice, smart thinking and help from the fams
If you want more information email me [email protected]
Regards,
TrishHi again
Try going to Rick Otten’s website
It’s a great read. Follow all the links, and also go to his other websites eg.
The really good news for a Grade 12 student who wants to get into property is that Rick will pay you (I think around $685) for sending him a few photos of properties in your local area which fit his description (ie, a spotters fee).
A great way for an unemployed student to:
a) Make a few easy bucks
b) Get to know one of the few PI gurus who is WIDELY RESPECTED on this forum
c) Get some “on the ground training” re looking at deals in creative ways (including NO MONEY DOWN DEALS!!)Cheers
GregHi Greg. Sorry for not getting back to you sooner but my computer is on the brink of crashing and I’m using a computer at school.
Don’t worry, the technical jargon doesn’t bother me. I am pretty sure I understood everything you mentioned(I think).
Yes I have read Steve McKnights 0-130 property book over and over. I didn’t yet know he had another one.
I have also read Rich Dad Poor Dad, Guide to investing and Real estate riches by Robert Kiyosaki and dolf de roos.
I also read another book that I think was written by Jan Somers. I am not sure.
I would love to get some more books but my Parents want me to wait until exams are over before I focus on other stuff.
Believe me when I finish school I will be getting my hands on as much PI books as I can and taking massive action towards aquiring property and making money and anything else to do with PI.
Thank you very much for sharing some websites with me. I’m sure I will find them very useful in the very near future. I guess this is the start of me networking with other investors
Thankyou again for replying.Chris
Originally posted by cbarlow:Hi Greg. Sorry for not getting back to you sooner but my computer is on the brink of crashing and I’m using a computer at school.
Don’t worry, the technical jargon doesn’t bother me. I am pretty sure I understood everything you mentioned(I think).Hi Chris
If I didn’t scare you off last time, then BE AFRAID, because yes (your worse nightmares have come true) I’m a school teacher!!
So pretty please with a jellybean on top, concentrate on your exams and then GO FOR IT. Good luck with your PI RESEARCH, SAVINGA AND action. Spend some money to link with Rick Otten, maybe if you become a spotter he’ll give you a discount to come to his Boot Camp!!
Cheers again
If I didn’t scare you off last time, then BE AFRAID, because yes (your worse nightmares have come true) I’m a school teacher!!So pretty please with a jellybean on top, concentrate on your exams and then GO FOR IT. Good luck with your PI RESEARCH, SAVINGA AND action. Spend some money to link with Rick Otten, maybe if you become a spotter he’ll give you a discount to come to his Boot Camp!!
Hi Chris,
Be even more afraid – I am a school principal.
But in all seriousness I am in full agreement with your parents and Greg here.
Focus your energy on finishing school first so that you achieve as well as you possibly can do – at the age of 17 your sentence is nearly complete and then you will have time to pursue your PI interests.
Completing school as well as you possibly can do will also provide you with the best ‘fall back’ position you can should you ever need to mark time or change tack at some stage in the future.
And finally there is no need to rush – a rushed and hasty decision now could be costly in the long term. Good investment properties come along more frequently than some people imagine and especially so if you are networking effectively and have a sound research base behind you.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
ROFL!!!!
Now he will never come back!!!!
Excellent!
Rgda.
Lucifer_auOriginally posted by Lucifer_au:
ROFL!!!! Now he will never come back!!!!
Excellent! Rgds. Lucifer_auOkay Lucifer…
…you got me on that one. What the hell is ROFL???? You’re not the Minister of Education, are you?Awaiting your decoding with bated breath. [biggrin]
Cheers
GregHehe….Roll On The Floor Laughing..
A question for both Greg and Derek,
A lot of these PI books make the comment that “this stuff should be taught at school”
As enlightened investors, can I ask if you in any way attempt to introduce the principles ( no pun intended ) of saving, compounding returns, and investing into the class..or is it against the carriculum ?
It must be frustrating watching the next crop of consumers going out into the world to take up bad habits when some good habits could be imparted while they are still at school ?
Just curious..
Hi Kp,
I must admit I am primary school orientated where the focus is on ‘the basics’ – but in answer to your question coverage of financial matters is very scant in the curriculum although it does make some token appearances from time to time.
The curriculum is pretty crowded in most schools today but there is a drift towards offloading some stuff that is superseded and include more relevant aspects of life learning in the curriculum.
Like most of the ‘life choice’ subjects such as health issues, values education (we do teach that Mr PM), interpersonal relationships and so on – there is a question of efficacy. For example schools have been teaching sex ed, drug ed and alcohol ed for a number of years and some would say with mixed success for many children. In areas such as these the messages from some homes are so more pervasive and do make the task of getting the message home more difficult.
Another example a little closer to home – my eldest daughter (16) has just left home to attend boarding school in Perth and hasn’t a financial bone in her body. She just isn’t ready to learn yet – we keep dropping hints but they haven’t been picked up yet. For her it is a case of ‘when the student is ready’ – I suspect for many teenagers this will be common.
Having said all of that there are moves in some states for a review of the curriculum with a view to incuding something along these lines in future years. For example Paul Clitheroe is currently heading (involved in?) a national committee looking at these sorts of issues and the Queensland State Government is implementing an anti-gambling component to the curriculum.
A concern I would have is that for many teacher there work contracts are a little removed from reality and the security of employment and certainty of income offered in many states means that some (many(?)) teachers do not have a good financial knowledge themselves and any teaching be lacking the passion to engage many of the kids.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi mate Marina Berths located in the right development are wonderful investments go for it.
Education; Finish school so you can tell you kids you are not an idiot, get qualifications in oter ares so you can understand money better.
There is no GET RICH QUICK solutions, however you will get rich quicker if you are SMART, you only get paid from your results.
Property investment is a science and only 3% of people in Australia will survive to live a comfortable life style you must learn the facts, the rest are opinions.
To Derek [grad](school teacher) teach kids about finance and how to save. Teachers have the worst record for savings and wealth creation so look carefully in the mirror mate. We have a 27 billion dollar credit card problem, why, lack of education, kids lease cars, why, bad education, first home owners now are going to use their parents equity to secure their first home, why, because we are not teaching our kids how to save, soon we will be having 100 year home loans like in Japan, how much more do you want Derek …
Teach the rule of 72 … teach compounding interest … teach how to save @20 per week … teach financial basics … teach the effects of interest free store accounts … teach how to read a contract … teach how not to get scamed … teach how to survive without a credit card and a mobile phone until they have income.
I cannot believe that people who want to get RICH and HAPPY are falling for the debt traps, you don’t need to be a scollar to work out the numbers but why is it that 97% of Aussies are going back wards ????[upsidedown]
Hi Everyone,
I agree with comments on teaching students about money & finance.
We have 3 sons, all taught the same, one budgets and invests, the other two live week to week. Personalities, maturity and lifestyle choices are varied in all 3 and we have learned not to compare anymore, as all 3 are happy and responsible.One thing close to my heart, is that so many young people have no idea about money at all. I have worked in primary and high schools as an SSO, and now as caretaker of caravan park with a kiosk; so see day to day, kids coming in with no idea of what their $2 can buy, or how to work it out. I see it as a whole society problem not just schools – families have responsibilities too. Actually, what’s even scarier is that many come in with $20 not $2, and still have no idea!!
Anyway….
Congratulations to Chris, your willingness to learn is commendable and we wish you every success in your exams and for your future.
[thumbsup2]Diane
Hi. This is my first ever post, and I am just beginning. I love reading these forums. It is really fantastic to see so many people at different ages starting out. As Derek implied, people start when they are ready. Naturally, the earlier the better, but it is never too late. Parents and teachers like Derek are great examples. The tools have been given. It is only a matter of when they will be picked up. Like many others, I wish I had started when I was 17. Congrats Chris on starting. This is the first step for everyone. I know nothing about marina’s but I want to say that this post is an ‘AHA’ for me. Look everywhere for IP’s, not just the standard places. Thank you.
Hi Chris,
I am only new to this site and have read through your entry.. It’s December now and I guess you will have graduated.. Congratulations!
I should have graduated this year also, although due to some mistakes and reasonable planning I have a couple of qualifications under my belt and have owned my first IP for 7 months.Good Luck with your investing future.
Hope to hear more from you now on..[king]Regards,
Beth MacLeod
[email protected]hi friends,
if the loan is only for 15 years – that pushes up the repayments. Is it possible to increase the period of the loan?Cindy Browning | Mac Home Development, Inc.
http://www.machomedevelopment.com/a Professional Real Estate Agency in Jacksonville
teach kids about finance and how to save. Teachers have the worst record for savings and wealth creation so look carefully in the mirror mate. We have a 27 billion dollar credit card problem, why, lack of education, kids lease cars, why, bad education, first home owners now are going to use their parents equity to secure their first home, why, because we are not teaching our kids how to save, soon we will be having 100 year home loans like in Japan, how much more do you want Derek …
Teach the rule of 72 … teach compounding interest … teach how to save @20 per week … teach financial basics … teach the effects of interest free store accounts … teach how to read a contract … teach how not to get scamed … teach how to survive without a credit card and a mobile phone until they have income.
I cannot believe that people who want to get RICH and HAPPY are falling for the debt traps, you don’t need to be a scollar to work out the numbers but why is it that 97% of Aussies are going back wards ????
Fully agree.
Our schools are teaching our kids to work for others, but they don’t teach our kids financial education.
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