Forum Replies Created
The main question is what is the prurpose of your purchase?
We’re assuming you’re looking at this house as an IP. It’s a great area to live, close to Uni and transport etc.
It will always be in demand for those very same reasons.Are you looking for yield? If so, look elsewhere. If you want growth perhaps you’re on a winner.
Is there anything you could do to increase the value. Could you rent it on a room by room basis to students and increase the yield.
If you’re waiting for prices to drop, that’s nothing you have any control over.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
The answer depends on you.
Are you happy with the tenant? Do they pay the rent on time?
Is it easy to find a new tenant or is their a glut of properties.
I own several rentals, some local, some interstate, some overseas and I need to rely on the input of my rental manager on the ground.
Many of my tenants move on to month to month arrangements once their initial 6-12 month tenancy expires.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
I agree.
Very wise advice. I own serveral rental rpoerties that could easily fall into this description. I knew in advance that I might be buying cheap because there was some remedial worl to do. Or to put it another way, the previous owner couldn’t be stuffed doing it.
In the first year of ownership I spend more on outgoings than rental income, but after the first year the improvements will begin to pay for themselves in lower maintenance costs.I send the advice to make sure you have insulation. It may cost 2k to get fixed but it means that your tenant wil be happier, and a happier tenant tend to pay on time!
Cheers,
Dwight
Dwight
Cashflow Positive Investor
I love ugly looking houses!
There I’ve said it. You can’t be afraid that that property you want to buy is not one you’d even “like” to live in. I own a handful that I most certainly would NOT want to live in.
However my goal when I purchased was to attain a positve cashflow so I could potentially buy more and more.
In my experience the homes that produce the greatest yield are in smaller towns, are ugly, are cheap!You often find that there is a basic floor on rental in a region, but house prices may vary wildly.
If you can pick up dwellings for less than replacement cost because someone else thinks there a bit of work then good for you!
My properties are not where I live so I’ve invested time a rental manager, getting to know them and getting them onside to tell me honestly what they think these places are worth and who might tenant them.So far so good in my case!
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Steve is the man. Follow his advice!
You have to find your own path though. I have had some success with shares (doing it the old fashioned way – Buy, it went up, I Sell!) and am now looking for cashflow positive property deals.
I have bought in Gold Coast and NZ in the past 24 months and the most expensive home I purchased was less than $140k.
The houses I’ve bought are all standalone or in a small block for the QLD case. I’ve avoided high rise with their OC fees that really eat into your income.
Also consider getting some coaching or training. You have a real opportunity to put your nest egg to use.
I was in a similar situation 10 years ago and made a few big stuff-ups that cost me. Buy Steve’s book, go to his seminar. Don’t be afraid to invest in yourself a little before you try to find a “vehicle” to make your money.
Good luck,
Dwight
Dwight
Cashflow Positive Investor
Can’t help you on that property. Go back and ask youself “What is my goal? What retrun do I want? What is my exit strategy?”
In realation to BA I used one when purchasing a unit in Neutal Bay NSW. I’m in Melbourne, so that’s why it was attractivfe to have someome “hunting” for me who knew the lay of the land.
In the end it was a good purchase. It was not yet on the market, was dirty, had a bad tenant. All great stuff as it kept the market away. I did a cosmetic reno and made a small lump sum profit and sold up.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
It’s good that you’re thinking about how to move forward!
I did a few things over my investing life that wer “borderlne” or tricky. Not necessarily by my own impetus, but becuase I was led to believed they were a “great opportunity” and so on.
I have learned that you have to stick well clear of the “line” and be on the side of the angels with regard to legals and tax.
It bit me in the bum more than once and I now listen a lot more to my wife, who is less stoopid than me for sure!
This isnt what you want to hear, but take heed anyway.
Dwight
Dwight
Cashflow Positive Investor
Bottom line is this. It’s better to spend a few thousand end get youself eduated. Do Steve’s apprenticeship or Results Mentoring.
Better to spend your money up front, in the opne, on coaching and teaching, rather than comission to sellers.I spent some time 10 years ago looking into it and didn’t move forward. I have since spent $10k plu son training and think I would have saved myself $100k+ had I done so earlier!
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Not sure what the controversy is. You may or may not agree with all thet Neil Jenman has to say.
I spent some timne working for a Jenman agency in Melbourne’s East and came away convinced that the majority were involved becuase they wanted to make a bit of a difference and not rip people off or mislead them.I’ve also had a fair bit to do with individual staff at other agencies who i would now happily use and recommend who are in no way affiliated with Jenman.
The market has changed in the ten years since I was involved. It’s now about internet presense really, not relationships with people from a marketing perspective.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
This is a similar property to one I bought in my SMSF last year.
http://www.realestate.com.au/property-unit-qld-surfers+paradise-114193959
It may or not be cashflow positive depending on how much you want to put into it from an equity point of view.Why did I personally like it?
Company title which meant low entry costs (yes there’s some grief too, but it was winner for me)
Small block, not high rise.
Tired – so upside potentialMainly – I had more control than a bigger block with OC etc
Now this example is more the “after” to my “before” It has been reno’d with w new kitchen. I looked at this one last year but went with the cheaper “old and dingy” that was not in theat block but one very similar.
Just an example of what I’ve been looking at over the last 12 months.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
You can certainly sytart as SMSF with yor $50k. I did so some years ago with a similar amount. It simplk means you take control over your investment. It’s not for everyone, but anybody who wants to take responsibility for their own future and has some experience would find it beneficial to do, IMO.
I personally traded in stocks with an amount that size. After a few years and some more funds added from the work account my wife and I were able to purchase a small, old 1BR rental apartment for cash.
There’s always the passive income fund to consider!
Dwight
Cashflow Positive Investor
Hello peeps! The fund is going great from what I can see. I invested early and it’s taken some time to find traction but looks like it’s about to reach a tipping point. If I had more spare cash I’d invest again in this fund right now!
Why am I posting this. Becuase the fund WILL close in the next 6 weeks. Please don’t come back in 2 months time and say “Can I get on board?”
My only association with the fund is that I’ve put hard earned into it and wish others would take advantage of the opportunity.
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This reply was modified 10 years ago by
Dwight.
Dwight
Cashflow Positive Investor
Getting back to your original question “Should I hold it or sell it?”
What was your plan when you were thinking about buying? Was it to increase value and rental return so you’d get a cashflow? Perhaps not if it’s costing you to hold it. Could you sell it and take a profit?Steve often says “what else could I be doing with my money?” and that is the real test here. If you could take your money out of the deal could you get a better return with it than you’re acheiving right now!
If you’ve got the building skills there are plenty of units you can look at for aorund the $140-150 mark that are very “original” and could do with a quick “makeover”. If you’re a local (I’m not!) I’d be looking at those to turn around and market to passive investors.
Just my 2c.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Did you take any action on your plans to invest in NZ Cunnin?
I have handful of properties on the North Isaland that are now bedded down and have been brought up to a reasonable maintenance level. I’m now looking forward to having to deal with making a cash profit each year. Nice problem to ohave to consider.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
Back to the original post – I fully agree, you need to have team in place, and invest time in finding and nurting said team.
I’ve bought a number of properties in NZ, and whilst it’s not particularly “foreign” to an Aussie, you need to have :
Accountant
Solicitor
Bank Manager
Property Managerall in your sights and on the same page.
My ongoing relationship with my current property manager has allowed me to avoid pitfalls that would no doubt have been taking cash right out of my pocket.Dwight
Cashflow Positive Investor
Hi Oranje,
I’ve bought a handful of investment properties in NZ over the past 2 years. Forget going to to Aussie banks. If you have the ability to service a loan and cash for a deposit it’s no different to being over here. You just need the normal documentation.
SOme NZ banks have an affiliation with local Aussie banks which would aid in setting up your account. You would need to open a new account and provide all the normal ID.I did this in person when I was on a buying trip 2 years ago. My wife was able to be ID’d because our bank in OZ was a “partner” to the bank I was dealing with.
Good Luck!
Dwight
Dwight
Cashflow Positive Investor
Hi Grace,
Have you had any success looking for deals in NZ?
I have bought properties in Rotorua with minimum pain having applied for finance directly to bank there.
I also looked in Wanganui which has a lot of cheaper homes that could also be positive cashflow.
Once I got started in Rotorua it was easier to leverage my local knowledge so I never followed through in Wanganui.
Cheers.
Dwight
Dwight
Cashflow Positive Investor
Hi Cunnin,
I can only speak from my own personal experience but:
NO issue with trust purchasing property. At this time there is no problem with foreign ownership and cash is king.
My loans have all be 80% LVR to date. No issue with finance as long as you can show ability to repay (Aus based income etc)
Can't comment on tax rates – I'm working on making a profit first.
Again, as Nigel says, it's best to talk to an accountant for individual advice. I can say that I spoke to my Aus based account and my NZ based accountant BEFORE taking any action. I would recommend this to any prospective purchaser.
A disclaimer here is that my original plan was to set up a NZ based Trust and not repatriate profits to Australia initially. So the idea is any cashflow will flow to my NZ entity and help pay mortgage/ build deposits etc. At some stage I will have to pay the appropriate taxes.
Cheers,
Dwight
Dwight
Cashflow Positive Investor
As an active investor in the fund, I chose to top up now that the fund is open again for applications.
So far the funds has been progressing just as predicted and I'm confident enough to add more cash now that some properties have been purchased.
Check out the link for more info.
Cheers,
Dwight.
Dwight
Cashflow Positive Investor
Thanks for that quick feedback. I'm a big fan of Tommy having done 3 days of Tax Lien training and I appreciate just getting some input from another Aussie who's already doing what I plan to do.
Cheers,
DwightDwight
Cashflow Positive Investor
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This reply was modified 10 years ago by
