Hi all
I am new to property and I have 3 questions that have been playing on my mind:
1. Can anyone recommend a good accountant and lawyer wrt to property investment in Melbourne?
2. After some research, I am quite keen on investing in positive cash flow property. However, having spoken to some “experts” – every single one has told me that there are no longer any positive cash flow properties. And that even if there was, the effort required to find them would outweigh the potential returns. Is this true?
3. If you don’t invest in positive cash flow property, what else can you do in the current environment to build wealth and/or improve your cash position?
I would gretaly appreciate any advice.
Cheers
T1Hi T1 Last weekend,a local property sold for $154000,guaranteed rental till Dec 2010 at $260 wk.I made an offer but missed out.Just keep looking there is always opportunities,you just have to recognise them,and be ready to deal,because if you don’t there are plenty of investors who are.Regards Bill
Hi T1
as far as an accountant goes try Dale Gatherum Goss in Kilsyth.
Now the cash positive property questions, i agree with the comments made to you that there are no longer decent deals in Oz, In fact apart from a home to live in i haven’t bought there since 2003, Today you really need to buy off shore if you want cash positive.
Deals can still be found in NZ although it too is getting very difficult unless you know where to look. My personal preferance- where all my investment dollars are heading is the US.
regards westan
http://www.nzpropertytogo.com
check it out !There are always ways to find them – if you look hard enough.
Still some in country areas – alternatively some outside the box thinking will help find ways of “manufacturing” +ve cashflow – change of property use, developments, renos.
Plenty of good info on these forums about how to find positive cashflow properties.
Regards
Megan
http://www.propertyhub.net
Your Investing and Developing Information Hub.T1
I agree with gafama, you will generally need to put some work/thought into to making a property cashflow positive.
Being new to property I thought it might be worth mentioning that generally Comercial Property will give you a higher yield if you can lock in some good tennants.
All the best
RhysCommersial property for a beginner (like me) is a little risky and does take a great deal of due diligence. Be aware of GST on commersial properties.
Answeriing the CF properties, they are still around, but I agree with Steve who say the you now can’t “buy” them, you have to make them. The problem is that this takes experience and I’m having trouble committing to properties when I don’t have the developing experience.
Only one way to get experience I hear hundreds of forumite yell at their screen.
AXJ
2. After some research, I am quite keen on investing in positive cash flow property. However, having spoken to some “experts” – every single one has told me that there are no longer any positive cash flow properties. And that even if there was, the effort required to find them would outweigh the potential returns. Is this true?
> Im still buying +CF residential; And yes you can buy them in Australia (though I must admit I’m buying interstate, but then I do live in Syd…). Look at regional areas.
Anyway who are these “experts”???3. If you don’t invest in positive cash flow property, what else can you do in the current environment to build wealth and/or improve your cash position?
> Well if you have a large amount of equity/money you can become a hard money lender, which can give you a high return (beating the Avg. stock market return).
Hellman
Im newwww tooo, would anyone like to share where abouts these +CF properties might be found? preferably in WA..any good area’s? Im using the equity from my home to purchase first IP and i really dont want to put much $$ into it. (cant afford it)[blink]
Ta
Country/regional areas are typically where you’ll find some cf +ve ones – rather than city.
Developing property still, for my money, gives the best returns however, of course, you need to know what you’re doing and do it carefully.
Otherwise wrapping (if you like it) will always give you positive cashflow and perhaps a couple of these might set you up to get into others/more.
Re: the hard money concept, hellman, had a friend try this and he had all sorts of problems with lots of defaults and then messy recoveries. Having said that, there is money to be made if you’re game.
Hope this helps.
Megan
http://www.propertyhub.net
Your Investing and Developing Information Hub.I think there are still CF+ deals out there – you just have to look widely.
I have been buying CF+ for only the last 18months and have bought 4. Each of them returns at least 10% with one returning 16%. One is in a regional centre of about 20,000 and the other three are in a capital city.
All of them have achieved capital growth of at least 20% in the last year.
You need to do several things:
1. Become educated. Australian Property Investor is an excellent magazine to read. Buy books, go to seminars. Learn everything you can. My law degree cost me over $5000 per year and to be honest, the returns weren’t that great! Education is essential.
2. Find an area with a higher than average return, say 5 – 7%
3. Start researching that area and become VERY knowledgable about it
4. Develop relationships with RE Agents there, preferably in person
5. Think laterally. It is true that there are very few straightforward CF+ deals out there now. Read Steve’s latest book on how to find ways of increasing value. I am a big fan of his saying “problem + solution = profit”.
6. Ignore advice from people who say that such properties don’t exist. People like me are having a field day making money because there are very few of us out there believing it can be done!Good luck
K
wow – Thanks everyone for your advice and thanks Westan for the recommend on the accountant.
The “experts” I’m talking about are established professionals in the in real estate and mortgage market who have made money with property portfolios themselves – all from capital appreciation. But I guess that hasn’t been too hard in the last property boom.
Thanks again everyone for their advice and good luck to all with your investing
Cheers
T1My accountant….whom i believe to be very good suggested that CF+ properties may be difficult to find and in my situation I should be looking for Postive Funded properties…..
This where the depreciation brings you into positive territory…..You can also use a tax method (I think it is called a section 64?) where the the depreciation can be returned to you thru your weekly salary….this means you pay less tax weekly but do not get the lump sum return at the end of fin year….
This is beneficial if you direct the difference strainght to your mortgage. It is a diseatsre if you do not….So I’m looking for
- new property already built rather than off the plan (pay stamp duty BUT I see what I am getting)
- [*]
in a historical “blue chip” area (pref within 15k of CBD)
- [*]
Historically strong rentalmarket
Historically good cap growth.
Regards
Tete
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