Forum Replies Created
Think about the future.
The larger block with no easement may be more expensive now, but down the track it could be a more sought after block for redevelopment with units, so it may be more valuable to either you or another investor.
Tenants don't care about a few more or a few less metres on your property. It won't influence the rent return much; if at all.
emu1208 wrote:Am I allowed to advertise my property for sale here?
Put forward a very detailed presentation of the numbers etc that will show the forumites what sort of deal it is, and what makes it so good.
And, if it's so good; why are you selling?
No-one is interested in a plain old property ad here; we can see them everyday on r/e.com,domain.com or in the papers.
Real Estate agents try to flog properties as investments everyday, and they are mostly crap investments.
wealth4life.com wrote:The greatest change over the ages is credit debt … there is no use attending seminars on wealth creation with out the basic understanding of how to spend money and how NOT to spend money …Agree.
There are not nearly enough seminars available for people about simple money management skills, and the difference between an asset and a liability.
We need these more than the wealth creation seminars, but for people it's a boring topic, so there is not much of a market for them. It's like teaching budgets and accounting.
"eeeuuwww" I can hear the sheep saying when you advertise a seminar on "Create a Budget to Wealth". It's got that nasty "B" word in it.
devo76 wrote:Agree with your points LA and blogs. The keeping up with the jones and buying plasmas thing gets mentioned everyday. I was just saying that there are many people who will genuinely be hurt out of this through no fault of there own.Just bad timing. And i believe geting all excited about the impending blood bath can be in bad tast by some on these forums.I don't agree that it's not their fault. No one forces anybody to create a dangerous financial position for themselves.
I think the timing is irrelevant if you have used sense and some caution with your purchase of a house.
Buying within your means, keeping the LVR lower, reducing debt are all good hedges against unforseen life events.
You may want to check out what the Land Tax thresholds are in NSW as well.
I think you may be getting close, probably over, with this new property.
The taxes on investors in NSW are a joke, and you may be better off to invest outside of NSW this time.
I think everyone is agreeance that the market is about to/already slowing down.
But it's not everywhere – there are some areas that will boom or simply keep on growing regardless of the rest of the market and what the media say. Go find those areas.
We don't need more discussion about the gloom and doom. If you want to discuss it more, go over to Global House Price Crash and you'll have a great time.
What we need more of is what to do when the market moves in the direction it is seemingly headed.
Me; I'm cashing up as always, keeping the LVR low, and making sure the servicability is good so I can take advantage of the buyers' market that is developing.
There will be many opportunities in the near future.
Heavily neg geared investors, and owner occupiers – both with very high LVR's and low servicability will be the providers of these opportunities.
Jackie1966 wrote:I would insist on the Buyer's Declaration. The agent should not have a problem with this if in fact another buyer does exist. Failing that, I would perhaps ask for input from the Principal of the office (mind you, you have no guarantees that the Principal is ethical).
The way our office used to deal with multiple offers was to inform the buyers of the situation, have them sign a Buyer's Declaration, have each contract drawn up and signed by the different buyers (without disclosing to each buyer the other offer or conditions) and then each contract would go into a separation A4 envelope which would be sealed (very coat and dagger, huh?). An independent person in the office (not the listing agent), usually the Principal, would present the offers to the vendor who ultimately made the decision.
I can't think of any other way around the situation. If your agent is not prepared to sign and have you sign a Buyer's Declaration Form, maybe you could ask the Real Estate Institute in the State where you are how to go about obtaining proof from an agent that another buyer does in fact exist.
How did you feel about the agent before this "second buyer" came onto the scene? Did you trust him?
It's been a few days since your original post, have you even heard from the agent? If there was another buyer on the property, how come there doesn't seem to be much urgency behind the sale of the property?
For what it's worth, I was trained under the Jenman System. I can hear the cringes. Love him or hate him, you really can't fault his training – it was pretty good. Personally, I don't think the man is out for self gain. I think he's overly passionate about what he does and he's a bit of an idealist (what's wrong with that?). He does get carried away with his cause but I think his heart is definitely in the right place.
Good luck, Tony. I don't know if I've helped much.
Jacqueline
Well said Jackie.
If only all transactions were conducted this way.
I'm a big fan of Neil, read all his books, receive his newsletter, follow the website.
And I agree with you; his intentions are honorable. Many people don't tagree as he tends to be a bit "in your face", but I think that unless he is, then no-one will pay attention.
Jackie1966 wrote:When I used to work in real estate, if I told a buyer there was another offer, THERE WAS ANOTHER OFFER. It amazes me how many buyers think this is just some line an agent dreams up to get a sale. Sure, agents are paid a commission. It's their job to list and sell houses – that's how they get paid (why do people begrudge this? Would you go to work for nothing?). If you are dealing with an ethical agent, the other offer would be the real thing and I would imagine that the agent would have you sign a Buyer's Declaration which states that you know there is another buyer on the property and you realise that you are putting forward your best offer. If there is no other buyer, I am sure that the agent wouldn't go through this process just to secure a sale. Give them the benefit of the doubt. Not all agents are unscrupulous. Just like not all buyers are particularly nice, honest people.
Jacqueline
Jackie,
no-one begrudges a r/e their commission.
I begrudge the LEVEL of commission though.
I have been an agent too, and been involved in a number of transactions of my own, and I can say confidently that the work required to sell a $1mill house is the same as a $200k house.
Why should the agent get 5 times more for the same work? It is a blatant gouge, and all the participants in the transaction know this.
Also, as house prices soar, the commissions increase. It's the same house. I know this happens with every commodity sold on a commission basis, but how many commodities double in cost every 10 years, and i know that when prices go flat they don't get much of a pay rise, but overall, house prices always go up, and go up above inflation.
That's a nice pay rise structure, considering the minimal level of extra study to acquire a Representative's Certificate.
If you are dealing with an ethical agent, then there should be no cause for concern that they are lying about "another buyer".
However, we all hear the stories of tricks and shonky games, and you see it every week with auction results – over-quoting and dummy bidders (the practice is alive and well; despite Govt legislation to outlaw it), conditioning of Vendors etc.
It is automatic that we are not going to listen to any comments from a r/e without having at least a healthy dose of sceptisism. Only the totally inexperienced in r/e transactions would be blissfully unaware of these factors.
It is unfortunate that all the good r/e's are tarred with the same brush as the bad ones, but the REIA consistently does little to reign in the cowboys in their industry – it is set up by Agents for Agents, and they look after their own.
If doctors behaved like many agents, they would be ejected from the Medical Association, fined, and probably sued by their patients.
R/E's get, at worst, a fine. And these examples are very few and far between.
Nothing illegal about paying off the PPoR debt.
Keep in mind that you will probably have some cap gains tax on the profit from the sale, so keep some money aside for that.
If you've had the IP for over 12 months, then you will be up for tax on 50% of the gain, at your personal marginal tax rate.
Talk to your accountant about what tax you might expect to have to pay.
You answered your own questions by adding the links.
Run away.
You answered your own questions by adding the links.
Run away.
Depending on the limit your lender allows you to use, your LOC will be funds available, minus any existing debt.
So, if your lender allows you to use 80% of the value of the property, and it's worth $280k, then the LOC will be $224k.
You still owe $204k, so you can use $20k.
There is usually no LMI on LOC's.
Ian Landy wrote:hleung wrote:The only thing wrong with "get in their and do it' is that you can make so many mistakes along the way even after reading 10 books. It's good to be able to do a course such as the TAFE one, ask questions and get some feedback from those who are not trying to push an idea. A lot of the books that I have read in the past are trying to sell a product.
Point taken. I wasn't knocking studying at all. It is essential to learn the theory. I think I was hinting more at taking some action sooner rather than later. Mistakes can manifest even after years of academic learning. It is ideal if theory and practice can go together and it is a fact of life that some people stay too caught up in theory without taking action. I guess it's a mindset problem which is hard to overcome for many. The first step is often the hardest – particularly with property when large sums of money are at stake.
[/quote]Good point, but I think if newbies adopt the plan of starting off with something relatively cheap to get their feet wet, then there is not a lot of risk.
It's when you see them going for the $500k off the plan apartment as their first one that makes me nervous.
devo76 wrote:Fair enough. But do you think the rich invester with many properties are the one that are going to suffer.The majority are going to be people struggling to pay there PPOR morgage and now they may have negative equity on top.Plus the average Joe who is trying to build a nest egg with 1 house for retirement. These are the people that are going to get hurt. there not greedy. just trying to better there life.I would be interested to know what the suicide rate is in Australia over the next few years.fact is this has the potential to destroy lives. I will not lie but, I hope to be in the position to buy cheap properties if a crash accurs. But i will behave maturely about it because i would know that my gain has possibly come from anothers loss.Steve,
You don't have to be greedy to get burned or wiped out.
All you have to be is financially uneducated, and a poor money manager.
There are PLENTY of very high income earners who go broke. Why?
Because they spend more than they earn on depreciable items such as $20k holidays to Tuscany, or a fully loaded 850 series BMW, or a $3 mill house on Beach rd, Brighton and so on. If you buy a house that is WELL within your means, then you can't go too far wrong.
Doctors are one of the worst offenders as a group for this. Academically smart, but not always financially smart; and lots of disposable income to murder, and a (perceived) image to project.
Here's an example; I know a doctor in LA who is a member at the Brentwood Country Club in Santa Monica. Nice golf course, but not the best in the world. He paid $200k to join this place, and it's another $600 per month on top for membership fees. He could join a Golf Club that is just as good a few miles away for about $5k, plus another $2k per year in yearly fees, and be able to afford a few IP's.
But no.
It's not often you see a person earning $250k per year living in a $350k house out in somewhere like Roweville in Melb, driving a 4 year old Honda Accord. No; they're hocked up to the eyebrows with a $950k house in Kew, and there are two brand new BMW 4WD's in the garage. Actually; they're not in the garage; the boat is in there; there's no room for the cars.
I'm not saying they shouldn't buy these items if they truly can afford them, but from my experience, people spend all their income and more to keep up with the Jones, don't do any investing in much other than "stupor-annuation" and don't allow for "rainy days" and "life".
Something happens like a car accident, loss of work – or both, or a downturn in real estate and a jump in interest rates while carrying very high LVR's, and so on.
Or, you'll get the average soccer Mum and Dad on a combined income of say $60k.
But there out there buying brand-new Pumpkin Patch clothes for the kids, they both smoke, they both have a new car on HP, they have cable tv, a video library membership, Mum spends $100 on her hair every month, they buy lattes every other day when they're out and about, they have 3 credit cards; all being hammered on a regular basis and only paying the minimum repayments per month, and they have a 35 square house with a double garage, and so on.
There was a thread on Somersoft about finding a property manager to manage a student accommodation property.
The owner has had no luck finding any PM's willing to take it on – too much work for not enough return.
So, there's your main problem; getting it managed by a reputable agent if you can't do it yourself.
Just out of interest DJac,
what made you decide to leave a high-paid job in your own Country and want to emigrate to Aus without some work already lined up?
As for the investing scenario, you can do No Doc and Lo Doc loans that will require very minimal financial history to help with the investing process, but you really should speak to one of our MB's on this forum about some possible scenarios.
Failing that, you have a good cash deposit sitting there; it may be wise to stick that into a high-interest online Bank account such as BankWest or ING, until such time as you get some employment and get a work and finance history of at least 6 months.
I'm sure there is a market for a properly set up, run by suitably qualified experts type of course to teach property investing, finance etc.
And there are honest and reputable property investing courses and seminars out there; the trick is to separate the scams from the real thing.
It would be great to see a TAFE course or Uni course for property investing.
The problem in the real estate industry is trying to find people who are;
a) suitably qualified
b) willing to do these courses in a similar manner to a teacher at a TAFE or Uni or High School.
For most people; there is not enough money in it to do it that way.
If it is anything like a TAFE run "Golf for Beginners" Course (I am a golf pro and have taught golf for 25 years), then it wouldn't be worth the time.
The local TAFE near me approached me to run one for them several years ago, and they had already advertised their Course!, but the hourly rate they offered me was a joke and I declined.
Sadly, no.
Unless you want to go to a complimentary one evening seminar, then get signed up for the you beaut $5k course and get steered towards some over-priced apartments they happen to have for sale at the end of it.
The best course you can do is the one where you get out the check book, and buy that cute little 3 x 2 with a garage for around $250k.
You'll learn REALLY fast.
Aside from that; hang around here, or over at the Somersoft forum; you'll learn a heap and it's all free.
Richard,
Isn't that 9 years to double in value?
72 / 8 = 9
lucky88 wrote:Yeah.I was all ready to jump in and things are still selling pretty quickly around here (Sydney) but I expect a lot of cooling in the market after the next lot of rises… but I am so eager to get on board! Very frustrating!
Lucky
Why not get on board in an area that is about to boom, as there always is one somewhere – just gotta locate it, then when it has started and your equity is building, you'll have some extra funds to use in Sydney when the slow-down occurs there.
