I’d like to find out from you what you would consider one or some of your biggest property learning curves – or mistakes made- that you would not repeat. This might help us learn from each other and save time and money.
I’ll start with a couple of my own:
Learning curve / Mistake no.1
Classic mistake – emotional buy :’fell in love with the look’ of a flat and overlooked the practicalities of the rental – the owners had renovated the bathroom but I did not look closely enough to notice that they had tiled over the washing machine taps and re placed space with a hand basin and that the block of flats did not have a communal laundry – it did rent eventually – but took a while losing valuable rental dollars. Plus this would happen again if tenant leaves leaving requirement to renovate bathroom.
Learning curve / Mistake no 2.
Locked myself into a really big personal home mortgage leaving zero capacity to invest.
Have since sold this property – but not in time to capitalise on the last 3 years of property boom (oh well – cashed up now to find other opportunities.)
What are your learning curve confessions? Go on – share some!.
Endless Summer [smiling]
Mocking my 17 year old friend early in 2001 for buying a block of land in Brisbane for $31 000 for his ‘future’.
What a waste of money, you should be spending that on a good time, not settling down like grandma and grandpa I said.
I wonder what that land would be worth now and kick myself because at that time I could have afforded to buy a lot more than just 1 at that price. [grrr]
Mine would have to be from having a soft spot for my family & always trying to advance them at the same rate as myself which I have finally realised cannot happen.[juggle] Mistake 1, did not buy a workshop which was going at a good price, right before the boom mind you, because father in law wanted something bigger for a business he was looking to set up. Mistake 2, so focused on negotiating & financing the purchase of a duplex for my parents that the duplex I had a hold on did not come through for me. The contracts were sent to me for signing but I was too busy with my parents to sign & the owner decided to keep them & sell them for an additional $60,000 the next month[bawl]
It’s funny how you can read all about other people’s mistakes a thousand times, but you never really learn to avoid them fully until you make them yourself anyway
A couple of years ago after landing my first full-time, high-pay job (high compared to Austudy), I went out and got a loan for a beautiful (2nd hand) car for $23000… At the time I could have bought a 2br unit in Toowong for $150k but this was before I really knew much at all about real estate.
Also, for my current renovation project, although I held back on a lot of expensive finishes, a few still managed to creep into my project and I bought some things that are not so practical for rentals… eg instead of buying the standard tile-on-the-wall soap holder for the shower I got one with a silver ring and frosted glass platter… It looks great but I’ll be surprised if it’s not broken within 12 months
For EVERY purchase during a project like that you must tell yourself RENTAL NOT HOME. And like I said I had read that very advice in many many books beforehand but still fell into the trap! Lucky for me they were relatively trivial items this time and I hope I’ve learned my lesson!OK, I’ll have a crack at this ;
On the Buying side of the equation
1. Strata units where you don’t have 100% control
2. Inheriting tenants and letting them go “as before”
3. Believing what the Pest Inspector says or writes on that farcical report
4. Letting the Builder or Civil Engineer report on the structure without you crawling around the foundations and the roof cavity with him.
5. Blabbing to the REA what your top dollar price is.
6. Persisting with RIP’s for too long ‘cos we were scared of the unknown with other types of properties.
7. Not performing sufficient DD on the earlier ones, ‘cos we didn’t want to tread on any toes or appear rude.
8. Trusting what the REA’s said.On the Selling side of the equation
1. Accepting contracts with “and nominee” as part of the Buyer’s name and address
2. Paying for the REA to stand there in a suit and say “I don’t know much about this property, I’ve just listed it”…and had 3 or 4 cashed up buyers walk away in disgust.
3. Realising after completing our first reno which took 3 solid months in winter with two small girls around our ankles, that after costs and CGT, our time spent on backbreaking filthy work was about $ 3.70 per hour.
4. Trusting what the REA’s said.On the Leasing side of the equation
1. Well dressed and presented prospective tenants sometimes aren’t.
2. Shabby dressed and poorly presented prospective tenants sometimes aren’t.
3. All ressy tenants want everything for nothing.
4. The RTA is not your friend.
5. Non-ressy tenants don’t whinge as much.
6. Trusting what the REA’s and/or PM said.That’ll do….brain tired now.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Dazzling wrote:
“3. All ressy tenants want everything for nothing.
4. The RTA is not your friend.
5. Non-ressy tenants don’t whinge as much.”Sorry for my ignorance, But what is a ressy tenant? [saywhat]
Cheesy
ressy = residential.
Dazzling has moved onto the commercial property field [biggrin] I am looking to do the same.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I agree with the ressy tenant thing. I have had to take the ressy tenants to thr tribunal twice but my non-ressy tenants I haven’t spoken to since we negotiated the lease in October last year. I am just enjoying seeing the rent go in the bank…[biggrin]
Hi,
It’s good to find a useful thread, I was getting all dispondant at all the sarcastic/jaded/pointless ones.
This is my first property so my learning curve is immense right now, but the biggest two are:
Be EXTREMELY detailed when briefing tradesmen, even the most straight forward job can go wrong without the proper instructions – I ended up with 3 exaust fans instead of 2 because the sparky thought I wanted one in the laundry not the toilet!
Make your mortage broker explain every detail for the buying costs until you understand – our deposit went from $10,000 to $5,400 and noone knew why; I eventually descovered our mortgage insurance had been added to the loan instead of the deposit.
Katie [biggrin]
but my non-ressy tenants I haven’t spoken to since we negotiated the lease in October last year. I am just enjoying seeing the rent go in the bank…JKM raises a point that is probably one of the biggest mistakes we made very early on.
Ignorance is not bliss. Just because the rent is coming in and the management report read okay does not mean all is well.
Get hands on and have a look at your properties.
Cheers.
Hi Guys
my biggest mistake was not being fully focused on investing and putting a part of my finacial resource into renovating my own home. This was a time when the market was ripe for the picking and i should have been using every cent as investment dollars.
regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
For EVERY purchase during a project like that you must tell yourself RENTAL NOT HOME. And like I said I had read that very advice in many many books beforehand but still fell into the trap! Lucky for me they were relatively trivial items this time and I hope I’ve learned my lesson!
You must be logged in to reply to this topic. If you don't have an account, you can register here.
