[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

March 23, 2004 - 7:32 am

In my experience rents have generally been decreasing since the late 90’s. Is that finally starting to change? If so, why?

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

March 10, 2004 - 7:52 am

Excuse my ignorance, but what does LOC stand for?

Message to Steve – how about creating a glossary of terms section somewhere on the web site please.

Gotta love all these TLAs…

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

March 7, 2004 - 12:41 pm

When I lived in the UK in the bust in the early 90s there was talk of a standard index that reflected average take home earnings and average home prices i.e. average home prices / average take home earnings. The notion was that in previous booms there had always been a bust when this hit around 4.0 and the bust in the market then happened just over the 4.0 mark.
I read somewhere that in Australia it is currently around 4.5…

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

March 5, 2004 - 9:34 am

You can get those credit limits on a normal card. Getting a platinum card is about what other benefits you get for the extra fee it costs. Personally I’ve never taken them up because the return on the benefits that I would use just hasn’t been worth it. Its just a basic attempt to get you to pay a higher fee for extra benefits that you’ll probably never use anyway.

Kim

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March 3, 2004 - 3:56 am

Couple of things to consider:

1. Do you have a tenant now? If not what is the vacancy rate in the area & what are you basing you return on. If the property is vacant for a while can you manage the mortgage on your own? If you don’t quite get the rental return you want can you manage a negative cashflow?

2. Have you factored in costs into your calculation like council fees, maintenance etc?

3. Are you considering a fixed rate mortgage? If not, what happens to your model when interest rates go up and can you handle it?

Otherwise it looks like a terrific deal to me. Go for it.

Kim

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March 2, 2004 - 5:38 am

Hi Helpme,

I sort of agree with a lot of the posts but playing devil’s advocate, why not tough out the current situation for a while. You have your dream home. If you wait a couple of years and reduce your mortgage perhaps you will be able to afford an investment property later. There are significant costs associated with selling and repurchasing. Don’t know exactly what it is in Sydney. But in Perth it will cost $50K plus to buy and sell a $700K property.
Talk to your lender about ways to reduce your mortgage repayments in the short term if they are too hard.

Remember that your own home is still probably the best investment – no CGT.

Flame away fellow forum people

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 27, 2004 - 10:16 am

Funnily enough I just spoke to my accountant about this yesterday. It also targets computer contract workers which I am about to become.

The ATO uses 4 tests:
1. Results test – are you paid for a result e.g. doing a discreet task and not just turning up to work every day for 6 months

2. Employment test – do you have an employee

3. Unrelated clients – do you have more than one client who are not related to each other

4. Business premises – do you have an office not in your own home.

If I pass any of these I’m classified as a business and can claim for much more stuff and also pay myself a living wage and then distribute the rest as dividends.
If I don’t all the company income is classed as my personal income.

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 26, 2004 - 5:59 am

Well things have changed since I left in 1998 – house prices have doubled and even tripled in some places. But there were some hotspots. Brighton for instance was averaging 12% ROI for rental properties. Dunno if it was cashflow +ve. Cambridge returns were high too. Both are university towns with transient rental populations. Now Cambridge of course is Silicon Fen which provides for greater shortages.

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February 26, 2004 - 5:52 am

One other thing about RE in the states. Commissions there are huge – 6%+. Different ballgame entirely.

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 24, 2004 - 3:33 am

Wow Richard,

You should write a book. 0 to 131 properties in … years []

How long did it take you by the way? Pretty impressive. Good to know someone besides Steve can do it!

Kim

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February 24, 2004 - 3:02 am

Go around the agent and present the offer to the vendor directly

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 23, 2004 - 4:56 am

Its my understanding that no lender can say no to a mortgage based on the potential mortgagee’s age. They have to find another reason. Thank our political correct times.

i.e. if an 80 year old came in wanting a 30 year mortgage they cannot reject the mortgage based on age.

I’m 47 and have 2 mortgages which will both mature in my 70’s. Bank was very keen to lend too.

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 23, 2004 - 4:50 am

Isn’t anyone concerned about currency fluctuations affecting potential income and capital gain? Always a risk when investing overseas especially given the massive changes in value of the AUD in the last 2 years.

Any thoughts?

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 20, 2004 - 7:57 am

Just one quick comment.

I’ve never needed or used a solicitor. Just hire a settlement agency – its their bread and butter and they know what to do. Solicitors cost too much and they probably get a junior to do it anyway.

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February 20, 2004 - 7:48 am

Well I can’t answer for QLD but in WA, a tenant on a month by month type lease must be given 60 days notice to leave. This also applies if you want them out at the end of say a 12 month lease. You have to remember to give them notice after 10 months.

Now they as tenants are only required to give me 21 days notice.

Pretty sure the law is state by state so I suggest you ring a property manager in QLD or a lawyer or look on the state govt web site. Should be easy to find what you need.

Don’t know if you can give notice until you actually own the property either.
Why don’t you talk to the tenant and ask them to leave early – offer them a sweetener – pay the letting fee at the new place or whatever you think seems reasonable.
I think the bottom line is that you are stuck unless the tenant is willing to help.

Kim

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February 20, 2004 - 4:21 am

Felicity

All I can say is, to hell with the agent. Bypass them and present your offer to the vendor.

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 19, 2004 - 11:26 am

Elysium

Personally I usually ask the question but never really believe the answer anyway. To me its the first step in the negotiation.

I remember reading a US real estate motivational type book a few years ago. Can’t remember who but it may have been the “no money down” dude. He goes to agents in an area and asks them to let him know when he has a “highly motivated seller” on his books. Some agents will do it and he was your usual self made real estate squillionare so clearly it worked for him.
Maybe as the cycle winds down this will be possible again?

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 14, 2004 - 10:03 am

Here’s my 2c…
You don’t mention your income but presumably the $200 shortfall isn’t too onerous. Your 3 pieces of land aren’t earning you anything but it doesn’t look like they are costing you much either. Beware selling them. They aren’t making any more land and land prices are what has fueled a lot of the property boom.

Presumably you have set up your loans so that you can claim interest losses, etc against your income. Also presumably you are living in one property and renting the other?

Depending on your circumstances, I suggest building on all 3 pieces of land eventually or selling one piece of land to finance building on the others. Another poster has recommended going into a partnership with a builder but look at trying to do it yourself first. Why give away profit if you don’t have too?

If you can squeeze in multiple family dwellings on each piece of land e.g. a duplex, you can use the sale of one to completely finance the project. But only sell if you have to.

An extreme example I heard about is a block of land one house back from the beach in Cottesloe in Perth which was on the market in about 2000 for $800,000. I looked at in then and thought about dividing it and building but couldn’t contemplate the enormity of the loans. Since then someone bought the land, built 2 wonderful 2 storey houses with 180 degree ocean views, big decks. Sold one and lives in the other. I estimate each property is worth about 2.5M. Expect they would have got their house for free.

Anyway, a pretty nice dilemma to be in []

Kim

[liddelkMember@liddelkJoin Date: 2004Post Count: 20]

February 14, 2004 - 9:24 am

Thanks Mel. I just read it. Seems pretty sound unless interest rates go crazy (remember 17% in 1989?). I think that in the current market conditions I’d be tempted to fix all the loans. The other thing to consider is that fixed interest loans usually can’t be had for more than 5 years and who knows what the interest rates will be then! Can always sell though I guess.

Steve talks about a 3 month cash buffer but I’m a little bit more cautious than that and aim for 12 months. Probably due to my life situation more than anything else. With a lot of properties, that can amount to an awful lot of spare change []
Best thing for me is to start small and see where it leads.
Kim