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I found when I was starting out reading the forums was my greatest source of knowledge then putting learnings into practice and learning some more from them. I went to a few of the free seminars but I found them to be biased and pushed their own product or agenda to benefit them and not me.
You’ve got an end goal which is good, but how are you going to get there? Do you want to buy and hold? Do you want to reno? Are you time poor or rich? Do you want to develop? Flip?
Are those 10 properties going to be $150k regional cheapies giving you CF or are they going to be $700k houses in capital city blue chip suburbs giving you lots of CG or a balance of both or all of the above?
Hopefully some food for thought.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Wise decision ;)
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
I have also used Depreciator before too for my place in Melbourne western suburbs and IIRC the gentleman they sent out came from around that area.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
There’s always markets within markets with each segment performing a little differently to the other.
Are you looking at a particular area in Victoria or Melbourne?
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
It can be difficult to get finance on studio apartments if they are less than 50m2 – the LVR would need to be lower so you would need to put it more cash upfront.
The rental yields of 10% may seem attractive on paper but usually the body corp eats into it too much to make it a viable investment. Have you called around to any of these places to see what the body corp fees are?
Are you limited in who you can rent to? Ie student accom or holiday let?
Capital growth would be very limited (esp for the retirement unit) as you have a very limited pool of buyers but also you can face the supply vs demand issues in buildings which will keep a cap on CG but also rent.
You may be faced with long vacancy too (why should someone rent your property as opposed to the other 12 units for rent in the building?). If you’re mainly renting to students (who are the ones typically drawn to studios) then you will more than likely have a couple of months vacancy over the christmas period.
In answer to question 2 – there’s better deals out there. Is it mainly the yields drawing you to these types of places? You can get a house with a decent amount of land for the same price and yields in some areas which offer better investment prospects ie cosmetic reno to manufacture CG or subdivision potential.
Anyway, these are just some of the things I thought of – hope it helps.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Not sure if I can link to another forum or not (soon find out! Sorry mods if I can’t) but on this thread on somersoft there’s some great spreadsheets for lots of different scenarios.
http://somersoft.com/forums/showthread.php?t=26452&highlight=spreadsheet+collection
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Are you looking for someone to find the properties for you, or just churn the numbers? There’s some great spreadsheets on the internet where you can punch in the different figures and it will show the projections for various time periods. Same thing with development feasibility.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Hi Jate
Either option will achieve the same outcome – you’ll be using debt to pay down debt, you’re just moving the securities around.
Say you have a fully drawn $50k LOC secured against your PPOR. You then get a $50k LOC against your IP’s to pay down PPOR LOC – there is still the $50k debit balance, it’s just a different LOC with a different security attached to it now.
Either scenario you’re going to have LOC/S with a total limit of $100k with $50k drawn on it giving you $50k tp ‘spend’.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
I can only imagine storage would be the easiest.
I’ve seen concrete water tanks converted to accommodation / man cave’s before and they look good. You would have to check with the council what is and is not allowable.
Looks like it would be a fun project though.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
I have also used Darryl who was great for a basic transaction and even better when the basic transaction turned into a messy one.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
It’s a tough one. I am a strong believer of good things happen to good people and I conduct myself with that belief. I don’t think the industry will change but while being a player in the industry you can conduct yourself with honesty and integrity just don’t expect it from others. Know your game well enough to know when someone is being less that honest with you or do your own DD and become self sufficient.
I refuse to compromise myself too, but in saying that, I have no intentions of leaving the property industry. I will conduct myself in a way where I will not hurt or take advantage of others and can still sleep at night.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
1. Yes – answer phone or return calls in a reasonable time frame
2. Don’t care – can’t see myself using the service
3. Not fussed about this either
4. I’m a big believer in you get what you pay for. Happy to pay a little bit extra if the service comes with it. If the fees are ultra low I tend to think what you’re compromising on to make the fees so low
5. Yes! Or at least when new staff are hired ensure they’re properly trained and know the ropes and their portfolio. An intro would be a nice thing too. A call or email to say ‘Hi, I’m your new PM’ not I call the office and ask for my PM to be told they don’t work there anymore. Especially if they were good and knew how I like to operate.
6. Yes, or just proactive communicationIntegrity and follow through is important too. If you ask for something to be done or something needs to be done at request of the tenant I don’t want to have to follow up several times just to get it done.
One recent example which has made me seek a new PM is I was told there was a crack in the wall at one of my houses. I said to get a builder to look at it and report back if it’s structural or not. Apparent report back was it’s non-structural and I gave the ok to get it fixed. She then advised crack was patched up and repainted. A couple of months went by and I noticed there was no invoice/charge from the builder for the work done. I queried this and she said he hasn’t sent an invoice yet but she’s following it up which I thought was fair enough.
I then toyed with the idea of selling the property and had an RE agent from another company through the property to give an idea on sales price. In his report he mentioned the big crack in the bedroom that was supposedly fixed and that the cracks go through to the brickwork outside and looks like an underpinning issue. I realise he’s not a builder but he sent photos through and unfortunately, by looking at the photos I think he’s right. Not happy….
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
1. What’s the kW of the air cons?
2. Seems ok
3. What does the landscaping entail?
4. No experience with this – can’t comment
5. Not sure about this one either, but I would assume it would be included in the build prices as they have to have it.Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
If one of the purchasers is ineligible for the grant that makes both parties ineligible. But if you’re looking for an investment property for him to be co-borrower it’s a bit of a moot point as he wouldn’t get the FHOG for an investment property.
There would be other ways to help your son whilst allowing him to still be eligible for the grant for a principal place of residence but he (and you) needs to be comfortable with making a ‘large weekly contribution’.
I”m making some assumptions here, but if he’s going to be deterred from owing a bit of money to the bank and meeting those commitments then maybe now is not the right time for him to get into investing. At the end of the day he needs to be comfortable with it as you wont be there to hold his hand all the way through his life. Perhaps look for a place with a lower entry price than a first purchase that comes with a sizeable mortgage then build from there.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
I think having so many new properties available to purchase will keep the prices of yours down, therefore CG will be limited as the market will be flooded. What’s the proximity like to amenities such as train stations, supermarkets, schools etc?
On the upside of purchasing a new property is the depreciation benefits but on face value without knowing anything else, I think you can do better.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Hi Kinetic,
Appreciate your reply.
Yup. I am non resident so need to be new construction for investment.OTP for two reason: 1) More choice, better deal 2) Time to manage the finance (I have another property investment).
Perth again for two Reason: 1) Looking at the property market and economy outlook of WA, I understand that lot of infrastructure is underway close to Perth CBD. I agree that growth is not as solid as other Eastern cities. 2) I am from oil and gas industry and as Ausi is booming with massive oil and gas projects, so this property can be use as my home when come down to Perth for work (This one is one of the main drivers for me to select the Perth for investment).
I really appreciate your suggestions and will follow it.
Thanks.
I will preposition this by the fact that I’m not overly familiar with the Perth market but I would be very wary of OTP purchases as a lot can go wrong and not a lot can go right. From what I have read Perth is nearing the peak of the market, which in the instance of OTP not good as your end valuation will come in lower than your contract price. I would read as much as I can about OTP on the pitfalls to make sure I was totally comfortable with the decision.
I would sort finance before entering into any contracts or engage a broker to have a chat with about what it possible lending wise for OTP.
Seeing as though this is a future PPoR for you that changes things a bit as it’s not just a pure investment so a few other decisions come into the mix. I’ll leave it to others to comment on the state of the Perth market/s :)
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Why Perth? What is drawing you to Perth?
I’m assuming because you’re looking at OTP that you are a non resident so restricted in what you can buy otherwise established may be a better way to go rather than OTP.
Have a look at the demographics of the areas you’re thinking of buying as different demographics will have different needs so don’t buy a 1 bed studio in an area that is typically young families.
There’s a lot of useful resources out there that will tell you what a suburb is mainly compromised of. Have a look at the ABS site or even just the real estate sites as they have some good investor information there too.
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This reply was modified 9 years, 10 months ago by
Kinnon Bell.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Which one is the better investment? What’s the CG prospects looking like for the Brisbane property?
Some major tax implications and considerations I see here including CGT – PPoR (?), capitalising interest and getting rid of non-deductible debt to pay down deductible debt.
If you live at your parents’ place would the rent from the Melbourne property cover the shortfall on the Brisbane one? What are your work prospects like in the future? Is your partner working?
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Long story short… after growing up on the far north coast of NSW with my family, my husband and I agreed that we would follow them to Melbourne with the intent to stay for only 2 years. It never felt like home and as soon as I arrived I was already planning my exit as I was never totally happy there. Melbourne was great to us career and property wise but I was spending 3 hrs a day commuting, lived in an area I didn’t like and I can’t stand whether that is below 30 degrees. After about 5 years my husband and I decided to put our investing on the side burner for a couple of years and make the move to where we always wanted to go – Cairns.
So we’re here now (after a couple of hiccups)and have been here long enough for the honeymoon period to run out and we’re still absolutely loving it, never once doubting we did the wrong thing. We had done the delayed gratification thing for so long that it felt good to do something for us, something for the ‘now’ and haven’t looked back. It’s delayed out end goal for a few years but at least in the meantime we’re happy where we are.
I still fly back to Melbourne on a regular basis so still get to see family and friends so have the best of both worlds.
If I were in your situation I would either rent in the area that I’m wanting to live in (by the sounds of it you have time on your hands so you can wait for a rental to pop up that is pet friendly) or buy regionally and commute. For me, I found the daily commute tough as it took so much time out of my day – I’d be away from home for 13+ hours a day.
If you sell the properties there’s nothing to say that you can’t buy again in the future but you’ll need to weigh up all the costs ie selling, CGT.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
Are you speaking to an actual mortgage broker or a banker at a particular bank’s branch?
If you’re speaking to a broker I see no reason why you would engage more than one for the reason you’re stating. A broker should have access to a wide panel of lenders to chose from and not just one particular bank. So then they would be able to give a more accurate representation of what you can borrow and with who.
Kinnon Bell | Kinetic Funding
http://www.kineticfunding.com.au
Email Me | Phone MeMortgage & Personal Loan Broker based in Cairns and Melbourne but servicing clients Australia wide.
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This reply was modified 9 years, 10 months ago by
