Hi everyone, I have that fear factor of to scared to do anything, because of what if.
Well after my birthday I got started looking at property. Today being the first day. Have been watching 2 areas for approx 3 weeks now, done research, eg. contacted council- found out what predicated growth for the area, found out the vacancy rate, found out future infrastructure plans, and found out that the supply and demand for the propperty is high.
The property details:
155,000.00 on the market – vendor has just dropped price from 160,000.00
Agent said put an offer for 150,000.00 and see what happens, and I suggested 100.00 deposit, I must say that didn't go down well, the agent said I would have to put a min of a 1,000.00 deposit which is not a problem except my husband may not be happy, and I needed to put information regarding using my brothers house as
currently rented out for $150.00 per week, Body corp fees 991.50, administration fees 295.60, and some other fees which I missed what the agent said they were are 451.85 per 1/4
Now the unit is from the 80's and if a paint job, bathroom reno(you could even get away with just leaving the bathroom and not do anything as it doesn't look out dated) and then furniture put in the place, the agent said it would rent for 290.00 to 300.00 per week. And you would differently at value after reno, there is nothing within the area unrenovated selling under 235,000.00Problem 1. So now I am at the stage that my lovely husband has back down and said he doesn't want to commit to anything
Problem 2. Worried about putting in a offer in case they laugh at us. My brother said he would go as a guarantor for us if we needed it,and we could use his house for the purchase, but he owes the full amount still.I Still have to set up a trust as yet.
Can anyone tell me how it works when buying in a trust name. eg. Am I getting the loan for the trust to buy the Unit?
So tell me what people thing????
"Problem 1. So now I am at the stage that my lovely husband has back down and said he doesn't want to commit to anything"
Men work on logic so you need to ask what are the reasons he doesn't want to commit and then come up with logical reasons why it would be worth while taking a risk for future rewards.
"Problem 2. Worried about putting in a offer in case they laugh at us. My brother said he would go as a guarantor for us if we needed it,and we could use his house for the purchase, but he owes the full amount still."
You probably only need the guarantor to guarantee the required deposit for the loan rather than the whole house.
Putting in an offer and being laughed at. You can walk away from the deal and find another bargain and place an offer on that.
or you could negotiate on the settlement time frame or price. If you don't ask / offer you will never know
"I Still have to set up a trust as yet.
Can anyone tell me how it works when buying in a trust name. eg. Am I getting the loan for the trust to buy the Unit?
So tell me what people thing????"
you can't buy it in the trust name if you don't have a trust set up.
if you had a trust set up. Loan is in trust name. you are guarantor of loan. House is in trust name.
Taxation is different for a trust . Not a good idea if trying to negative gearing. You need to talk to your accountant on the taxation implications of a trust and the costs involved in preparing tax each year.
Hi Spock,
Regarding getting laughed at. Id dig depper into this as a confident bid is effective. If you are not comfortable making an offer, does this mean you are not certain your offer is valid? ie do you have stats and data to support the offer you plan to make?By having this type of information, you can make your offer with confidence that it is fair and within reason.
Key data I use:
1. Recent sales in area for similar properties
2. Factor in condition of property
3. Factor in time it has been on the market
4. Factor in current market sentiment
5. Factor in the willingness of the vendor to sellThen if the sales guy laughs you have strong facts to support your offer.
Hi, I remember your previous posts. Congrats on coming this far.
Fear is very normal.
More impt do the numbers stack up? It is a flat period to be buying property now but if you have a plan & work it, you can progress a la get rich slowly & steadily like most people have to do. A wildly successful 1st IP is usually pipe dream stuff.
You've already picked out a salient point – the net yield is unattractive to an investor. Don't believe every word the agent tells you. If the rent is potentially $290, why is it currently only $150?
Reno cost is unpredictable unless you can do it yourself. There isn't much change left if you factor in transaction costs if the end value is $235000 after reno.
If you really are keen to buy this property, offer a low low price. If they laugh, too bad. Why not offer $135000? All they can do is reject it. Then you know that the resistance level is above that.
Another bit of 'advice' – understand the body corp stuff thoroughly before you finalise your offer. you don't seem too clear on the costs involved.
Isn't there a freestanding property with no body corp hassles?
Good luck.
KYThanks everyone for your reply's,
duckstar- what did you mean when you said this: You probably only need the guarantor to guarantee the required deposit for the loan rather than the whole house. e.g. does my brother only use his house for the deposit?? not sure if he has enough money in the house?
My plan is to buy, reno, hold – once again is it a good idea to do the first one in our own names due to the cost of the trust set up and limited funds.
KY- Hi I have decide that looking at the unit that due to the yield and the body corp this property is not for me. But I have found another freestanding house that is 135,000.00 and renting for 160.00pw at the moment. Could rent as is or do the following paint, pull up carpets as it is on floor boards.
Mathewc73- I used some of your information you gave me on another property
Key data I use:
1. Recent sales in area for similar properties- selling for the listing price in the area, 135,000.00
2. Factor in condition of property- liveable can do a reno, eg pull up carpert its on floor boards, paint,
3. Factor in time it has been on the market- only 3 weeks – everything inthe area is sell fast
4. Factor in current market sentiment- not sure what you mean by this?
5. Factor in the willingness of the vendor to sell- not sure but will find outProblem 2. Worried about putting in a offer in case they laugh at us.
My dear friend, problem 2 is not a problem. The agent gets paid to laugh at your offer, he/ she wants to make you feel as uncomfortable, foolish, inexpirianced, uninformed as they can. After all they dont work for you they work for the vendor. If you think they laugh at your offer now how hard do you think they will laugh when you pay too much for the place. " he who laughs last laughs the longest". (Sorry had to put that in, its an oldy but a goody. ) You are already in trouble if you are thinking like this, someone mentioned confidence in your offer is the key. You do not even have to justify your offer to them, let them laugh and then remind them that if you dont get a formal reply to your offer (that you must make in writting, and at this stage no bull shitting around, you are makeing a formal contract if your offer is excepted) You will forward it to the vendor your self or via your solicitor.
Most agents will fold like the cheap suite they ware, when you let them know you mean business.In my opinion there is far to much intimidation and pressure placed on purchasers by agents. Rermber you are the buyer they do not own the place they are only an agent. Bring on vendor selling as the norm for a faired deal all round. Hope Ive helped to boost your confidence when and if you make your offer.
Cheers
T……………..Dr Spock,
Make your offer about 20% less than you want to pay and work upwards.
Never ever worry about others when making offers.
Most R/E's just want to get the offer stage over and done with plus the higher the offer the more commission for them.
Your money your deposit you decide how much.
If vendor wants to sell they will accept.
Take your time and don't rush. There will always be other deals. Some will be better and maybe some wont.I do think it would be better for you to have your finance and trusts etc all set up first before going any further with the process.
Hi Spock,
Just to clarify: 4. Factor in current market sentiment- not sure what you mean by this?…Suburbs can go through quiet selling times. I dont generally know why, as the next month they may pick up. So sentiment at the time of offer is more around what are the other buyers doing/thinking? What are the agents thinking? If its quiet and rates just went up another .25pc you may be able to factor this into your final price.
Mat
hi, $135K renting for $160 pw sounds far more doable than the unit.
check the stability of tenancy. if it's a major city eg Adelaide in Elizabeth it's possible to find such properties. it's a rental belt with 1000s of people renting so tenants are not hard to find. Also, rent has caught up & it's very unlikely to plummet to $60 pw that was the norm 8 years ago. that gives the benchmark for the property valuation.
even in rural centers, they may be high rental demand. my former tenant moved back to the riverland as the cost is much lower compared to the city. they were on work cover / etc etc
still, people have to live in houses & centrelink pays half their rent.
let me know how your negotiations are going. i'm temtpted to give you just a little boost towards that deposit. i remember your saga.
have a good weekend,
KY
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