Hi
I hate to appear ignorant, but thought I'd pop in here to ask these questions and hope that someone will provide me with the answers:
When crunching my numbers initially on both houses and units, can you tell me if the following numbers are percentages of the cost price (if so, what percentage); an educated guess or a set dollar amount per state:
Capital appreciation
Loan Application fees
Mortgage registration
Body corporate fees
Capital costs
Depreciation
Maintenance costs
Utility rates
Council ratesWhat kind of money can I expect to pay for:
Builders inspection
Quantity surveyor
Pest insepctionAlso, I have bought and downloaded Investment Detective which I think is a fantastic tool. In simplistic terms, if the 3 x 3second rules all show a pass, then can I assume that the deal is at least good to go financially?
Any help someone could provide would help me immensely.
Thanks
Ness1474, I would suggest you don't use percentages for most of the items you list, instead make a spreadsheet where you can enter the numbers for each IP individually and then see the results. The variations between these items can be huge and this is what makes one IP a good investment and another a mediocre at best. As part of your due diligence for each investment you need to get all these numebrs above the table (don't rely on verbal advice of the seller's agent!!) and crunch the numbers. If the don't meet your requirement, do some reverse engineering i.e. see what price would make the deal work for you and use that to develop any offers.
Hi Ness1474,
I agree with Erik. Each of these figures will differ for each deal that you look at. You are best to start collating actual $ costs, so that you can get an idea of what each of these is as you move from deal to deal. Then at least you'll have "ball park" figures to go by for the next deal.Body Corporate fees (where applicable) and council rates you should be able to gather from the contract documentation.
Capital appreciation – you'd need a crystal ball to get this one right. Depends on market factors, location and so many other variables.
Loan Application fees – will vary lender to lender and may even be waived in some cases: speak to a good finance broker.
Mortgage registration – is usually a standard fee but can differ state to state: again a finance broker can give you a figure on this
Capital costs – talk to an accountant on this.
Depreciation – highly variable and will depend on age of property, fixtures, fittings, method of calculation: talk to a good accountant
Maintenance costs – will depend on the age of the property, etc
Utility rates – water costs will usually be part of contract documentation
Builders inspection, Quantity surveyor and Pest insepction will vary depending on the location of the property and the detail of the report, but allow at least $400+ ish per report. I've had QS quotes for $1,000s for blocks of flats.I hope this helps.
WendyWendy Chamberlain | Chamberlain Property Advocates
https://www.wendychamberlain.com.au
Email Me | Phone MeMelbourne Buyers Agent & Sellers Advocate | Independent | Flat Fee
Thanks for your help guys.
I knew I needed to get professional advice with these figures, but thought there might be a 'standard' figure to help crunch the numbers quickly initially.
I have a good accountant and am in the midst of choosing a mortgage broker – I see that Choice Home Loans seem to be a popular choice? Any suggestions or recommendations?
Also, can anyone recommend a good quantity surveyor in the Brisbane region? I can just go to the Yellow Pages but would prefer recommendations.Once again, thanks for your help.
Cheers
Just on the point of maintenance, a % is still a useful tool as you can compare & monitor if costs are increasing disproportionally (costs may well be higher if the property is managed short-term/holiday lettings, but so will depreciation).
Hi mate..I have been in the taxation field for a few years, in the past most of my boss;s clients would use a company called " Depro" for their IP capital depreciation report, they are one of the popular and professional ones. I personally have used them as well. they are not bad….
I usually deal directly with the bank for the loan purpose, why would you pay for someone to do a job if you can complete it yourself. unless you are super busy and the broker 's work is fantastic. If someone here could provide some realistic reason for using a broker i will be more than happy to listen and learn.
These are just my personal opinion, Hope it all helps.
All the best and happy investing…
ness1474 wrote:Thanks for your help guys.
I knew I needed to get professional advice with these figures, but thought there might be a 'standard' figure to help crunch the numbers quickly initially.
I have a good accountant and am in the midst of choosing a mortgage broker – I see that Choice Home Loans seem to be a popular choice? Any suggestions or recommendations?
Also, can anyone recommend a good quantity surveyor in the Brisbane region? I can just go to the Yellow Pages but would prefer recommendations.Once again, thanks for your help.
Cheers
Ness 1974
Here are links to a couple of QS firms we refer our clients to in SE Qld which may help
Depreciator – http://www.depreciator.com.au/driver.asp?page=main/home
When dealing with a Mortgage Broker i think one thing you want is to deal with someone who has the same ideals as yourself when it comes to property. Many Brokers have no experience in dealing with investors and are slightly out of their depth in discussing various strategies.Choice are a merely a franchised operation where the advice you get is as good as the individual who purchased the franchise.
I guess in saying that i am somewhat biased.Richard Taylor | Australia's leading private lender
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