Forum Replies Created
Hi Jacqui,
Well spotted. I had noted a change too, but was still able to click on the date/time to go to the post, so I hadn’t chased it up earlier. Use the date/time for now (see italics below) – it will take you to the relevant post.
e.g. Jacqui Middleton started the topic Thread titles no longer a link from forum profile pages in the forum Site Problems / Feedback 11 hours, 1 minute ago
Benny
Thanks for that link @mirwin – much appreciated !!
Benny
Hi IJC,
Wouldn’t these amounts be broken down for each property in your Tax Returns each year? Are these available to you?Benny
Hi Sam,
Check out this thread – maybe someone mentioned in it could be useful to you, even if some distance away…..
https://www.propertyinvesting.com/topic/5019502-need-a-new-accountant-in-sydney/
Benny
Hi Daz,
A bit of clarification needed – your title suggests you might be wanting a book about “Developing”…. But your words in the first post seem to say you are looking for a book of fundamentals re property investing. Please identify just which kind of book you require.
Depending on what it is you are seeking, I would hope someone would be able to step in and offer their thoughts.
Benny
I signed up to Equityin, who are a buyer’s agent and claim that since they are buying properties in ‘bulk’ from developers/sellers, they can secure a discount which they pass on to their members who then use the built in equity to help finance the purchase.
Hehe – it is a bit of a stretch to call yourself a Buyers Agent when all you have to sell happens to be new properties from developers. A proper Buyers Agent would be looking at the whole range – new and second-hand, small or large land, inner-city and outer suburbs. Sounds like a marketing attempt to sound plausible. Like Redwood, I would exercise caution.
Someone the other day re-quoted a classic, and it fits perfectly in this example :-
“If your only tool is a hammer, every situation looks like a nail!”
However, a lot of the properties I have seen from them seem as if the ‘estimated market value’ or ‘estimated rent’ of the property has been inflated, to make it look as though they have been able to secure a massive discount or better returns.
If they are offering a Rental Guarantee, someone has to pay for it !! ;)
Keep that scepticism well fed – it is doing a great job for you.
Benny
Hi Leewizza,
That is a huge point right there !!
I truly believe that with the stuff we will be doing this year and beyond that the loss of $ will be a small number in comparison but wouldn’t get the chance if I used up that capital in paying off the loss.
It is easy to get caught up in the drama of a poor decision, and we might take the path of “amputate the offending item to ease the pain”.
But, I believe it is a perfectly valid (and sensible) path to continue to make payments on a “dog” to prevent a calling in of the loan if your situation can cover the negative payments, rather than stifling your progress by paying down the loss and starting again. e.g. A negative $100 a week (even if no Tax deductions) only costs $5000 a year. How does THAT compare with monetising a loss of $150k?
As always though – the detail is in the numbers. The numbers work, or they don’t. If, in your case they do, then I’m with you,
Benny
Hi Dolamoot,
Am I being too nitpicky right now give me your advice guys, also any suggestions on keeping the price below 109k?
Well, you have SEEN it and it seems to stack up against neighbouring houses (“recently one sold for $135,000 and a few doors up and this house is one of the more decent ones”) so, on that basis, I’d be saying if it seems good value, pay it and smile.
BUT !!!!!
I haven’t replied to the agents last text message yet I’m thinking of asking if they would consider 109k a done deal and if they don’t I absolutely won’t pay more then listing price but I’m concerned that’s what the agents trying to do
There are a couple of points that have me tending to agree that “something seems a bit off”.
1. It has been on the market for TWO YEARS !! Really? Does the Agent have a plausible reason for that? Would it have anything to do with the “house needing under-pinning”, or the “Council is about to resume the front half of the block for road-widening”, or any of 100 more possible gotchas !!! Worth a bunch of searching questions, maybe even a trip to Council, and a “Get out of Jail Free” condition in the contract (e.g. subject to satisfactory due diligence within 14 days).
2. “A new buyer just showed up” – Hmm, right after you arrived (the only buyer in 2 years) – must be coincidence, eh? :p
So, is there REALLY a buyer? If not, then you could take the risk and let your contract read $107k (but add a Sunset Clause so they aren’t dangling you on a string – e.g. “If contract not accepted by Vendor by … date … then it is null and void” – check the wording with your solicitor).
If there IS a buyer, and they really have offered nearly $109k, who is to say that they won’t offer more if you step over them? So, you could find yourself in a Dutch Auction. Or, you give them one shot – “this is my offer – if not accepted, I walk” and be prepared to lose this one.
One thing in your favour could be the Agent – it means little extra $$ to them if you pay $1000 more for the place (the Agent might only see $10 of the extra $25 commission). But, if they are made aware that you might be shopping for more IPS, they might just swing things in your favour to get you wanting to use them in future deals….. Food for thought.
The #1 question “Is there really another buyer?”
Benny
Hi Kylie,
Here are a couple of links that may be useful to you. This first one is of a young bloke who concentrated on positive geared IPs from the get-go (started just 4 years ago) :-
https://www.propertyinvesting.com/topic/4410441-thankyou-steve-mcknight/The next one is a generic thread with a roll-up of useful information re finding positive geared IPs :-
https://www.propertyinvesting.com/topic/4384472-answers-to-where-to-find-cf-deals/Note the older dates on the latter link – not to scare you, but just so you can see these ideas still work today.
Benny
Hi Aki,
Welcome aboard. From your words, it sounds like you are wanting to buy lower cost properties with a positive cashflow (same as Steve did years ago in Ballarat). Those days (and prices) may have gone, but the idea is still possible – see this post :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697977Darryl has done a pretty good job of emulating Steve – and he only started in late 2011, so just 4 years ago.
Also, you say “I like his numbers 130 properties in 3.5yrs. Is it really practical? ”
Steve had a team that allowed him to do 130 properties in 3.5 years – with a smaller team, you can still do well (as per Darryl above).Since financing is one of the biggest hurdles, check out this thread:-
https://www.propertyinvesting.com/topic/4404268-30-properties-before-25-finance/Benny
Hi Sam,
Thanks for adding more data – here’s what I got from your words – summarised:-You are looking at a second-hand house with potential for a reno in a regional area. Asking $390k, median is $460k. Rentals are in big demand (ttherefore vacancy rate “sounds” low), so that is good. That target property sounds quite good – only the numbers (I think) need a bit more of a look……
My thoughts straight off are these – with a 6.4% return, it might go close to positive geared right off. Of course, with capital and depreciation, that will be assured. This sounds (to me) like a rather high-cost regional house – I hope you are not looking at an area that might be artificially high right now, but might drop in the future (e.g. a mining area). Who are your tenants to be? A family unit with kids? Students at a nearby Uni? DINKS? Mine workers (gasp)?
Some Regional areas might indeed have quite high prices today (e.g. large regional cities – e.g. Ballarat, Dubbo, Townsville – but then, are these really “Regional”?) Can you share the approx. population of the area you are looking at?
Re an accountant – depending on just where you are, you might want an accountant in your area. Share where you live and someone might know of a good one in your city/area.
How did you go with your finance?
Benny
Maybe offer him full price for a 3 month settlement (or $275k for 14 days, or whatever short timeframe works).
If he has a mortgage, he might find the extra 3 months will cost him the difference anyway – you, meantime, have an extra 3 months to work on finding the extra bit. If the area is growing, the equity gain could offset any extra you might need to pay.
Benny
Hi Bianca,
And a big welcome to you – you have come to a good place !! The subject of property investing is huge – as such, reading or learning enough so that you can at least decide which path is for you would be a good start.Your current skills might allow you to buy/reno/sell or buy/reno/hold – but do you want to do renovations at all? Maybe your finances won’t allow it, even if you do have the skills. That is one small example – finding out what options you have, and then choosing which option suits you, is probably one of the earliest things.
Finance is an early one too – no use making plans to do much at all if your finances don’t allow you to, so spend some time reading and meeting others to get an idea of what can work for you. Get to know a Mortgage Broker that seems to “click” with you – they might become a founding member of your “team” into the future. Meanwhile, their words will be guiding you.
Re reading materials, books are good – but also on this site, on the Home Page, is the Training Centre. Check in there for a wealth of knowledge broken into areas – e.g. Finance, Analysing Deals, Buying, Selling etc. Then on the forums, do check out the “Stickies” in each forum. When you read of “meetups” in your area, go to them to meet others who are doing what you want to do.
I hope you find a wealth of information right here that will help you get up and running,
Benny
Hi Sam,
Do I buy???????
There are probably 101 questions to answer before we would say “Buy” – your question is a bit like saying “My blood pressure is 120 over 75 – am I healthy?” ;)
But I know what you mean about the excitement, so I understand you wanting to burst into print, and onto the property scene too. To help out right now, here are some of the questions I ask you first (and the reasons why I ask, so you can understand where I am coming from)
1. Is this a house or a Unit? (some extra expenses for a Unit that will hit your “bottom line”
2. What is the Median price for that area? (see if you might be paying too much)
3. Are you expecting to spend anything on it once bought? (to get an idea of your investing style – reno, develop, or just hold)
4. Are you expecting the IP to be positive or negative geared? (Learning about you and your goals)
5. Do you have your team together (mortgage broker, solicitor, accountant, etc).
6. What is the vacancy rate of the area in which you are buying? (to ascertain if this is going to be “the buy of the month”)
7. Does this purchase fit nicely with your long-term goals?
8. Do you have finance in place?
9. Have you signed a contract yet?
10. Is this new, OTP, or 2nd hand?
11. Is this in a major city or a regional town?And hey, these are not even in a priority order – so some later questions may be more important than some earlier ones.
Keep your powder dry right now – let’s see what your answers are, and let’s see what other members might ask too. We don’t want you “rushing in where angels fear to tread”,
Benny
Hi CoolKid,
What do you mean as in rubbish stock? I have been looking around Nerang.
I won’t guess what “BuyersAgent” meant, and he will likely reply soon anyway. For mine though, the Gold Coast has LONG been a haven for some unscrupulous figures and/or companies. Their modus operandi is to FLY buyers in from cities lke Sydney and Melbourne (for FREE – yer, right!!!) and SELL them poorly built new houses/apartments at over-the-top prices.
Usually these would all be new and often OTP (off the plan – i.e. doesn’t exist yet), in greenfield estates commonly. Now, I don’t know if Nerang was ever a place where this went on – others might be able to help. If it was, it could go back 30 years or more. Ones I can mention currently are Coomera and now Pimpama. They are often characterised by being minimal land sizes, often in areas that still have little infrastructure, and their initial sale will be showing a “higher-than-usual price”.
I would think your best defence when buying any older property is simply due diligence – check a house’s price against other similar properties thru several RE agencies.
Be sure to have a proper Building Inspection as part of your contract conditions, then PORE OVER the report the Inspector will provide you. Talk to neighbours and shop owners in the area where you are looking to buy, questioning them about their place (e.g. did they buy their house new, who from, good deal or not, was their house good value from day one, etc). Do they know any stories of marketeers who might have “come unstuck” in that area…. etc.
Some areas are old enough now to have become good value (infrastructure is now in place, early owners have worn the cost of the “too expensive OTP house”, and any structural problems have been fixed by them or subsequent owners). So, don’t let the history of an area throw you completely – a house will be good value, or not – and usual DD will identify this.
Let’s see what “BuyersAgent” may have been thinking….
Benny
Hi Aki,
Apartments often show a higher Gross Yield than houses. As you said, the land cost is cheaper for an apartment – but this also adversely affects the growth (because it is usually LAND that increases in value – buildings depreciate/deteriorate). This makes a unit cheaper to buy, thus requiring less rent per week before being “positive”.But keep in mind that apartments also have “Body Corp” costs, and some of these can be prohibitive. i.e. an extra cost for a unit that does not apply to a house.
Personally, I prefer houses – you can do a reno without having to “get permission from the Body Corp”, and when you are tidying up the front yard as presentation, you are only answerable to yourself no matter what you do or spend. Houses also differ from one to the next, unlike units which can all be identical.
Welcome aboard, Aki – spend some time reading around – the “Training Centre” on the Home Page is an excellent source of ideas and knowledge. Some threads provide really good value too.
Benny
Cool, Jamie – thanks for the tip.
For others, here is a link to HTW’s Download site :-
http://www.htw.com.au/downloads.aspxFeb 2016 shows Brisbane and Gold Coast at 9 o’clock = Rising Market.
Others are :-
Tasmania is at 7:30 = Start of Recovery.
Also at 9 o’clock (Rising Market) are Mid and Far North Coast of NSW, Adelaide, and SEQ as mentioned
Melbourne is at noon = Peak of Market
Sydney and Canberra are at 1:30 o’clock = starting to declineThere are plenty more, so do check out the file.
Of interest to me was that for UNITS, Brisbane is showing as “Peak of Market” but Gold Coast is still “Rising Market”. This has to reflect the immense “over-building” of apartments in Brisbane in the last year or two. Melbourne and Sydney too? I didn’t check…
Benny
Hi Jules,
Welcome aboard !! I’m sure there will be some members who can help, but give us a city – no good recommending a project manager in Sydney if you are in Perth. ;)
Benny
Hi Jo,
All the hours and hard work I put in to gain the highest certification possible in my employment has also paid off and I now regularly bring in 100 per hour at the weekends to stash in that account ready for my first successful investment property to be.
I’m enjoying reading your updates Jo, and smiling as I read of the changes in you and your stuation in just a few short months. Awesome !!
Regards,
BennyTerry,
2. Incidental costs of acquiring the asset, or costs in relation to the CGT event, for example, stamp duty, legal fees, tax advice, and so on.
Does 2. (above) also relate to costs of selling? From the wording “costs in relation to the CGT event” one could think selling applies…. Without the sale there would be no CGT event, right?
And thanks, hey,
Benny
