Forum Replies Created
As Jamie M said its up to youWe currently have our mortgage set up (PPOR) with a 100% offset interest only set up. We put all our funds into the offset and then build it up so we can avoid Mortgage insurance eg 20% deposit plus funds to cover purchasing/renovation costs. Then we take it out- usually just write a cheque and then purchase an investment property. We pick cash neutral properties (usually ones we renovate and then rent out at a better price) so we don't reduce our ability to add extra payments/ and do it all again. We are currently on the look out for our next purchase in early 2012. We also will use our PPOR as an investment property in the future, and that is also why we pay interest only. You need to work out what you are comfortable with. Also do your research you may want to invest in your state first- in areas you know well.
I'm not surprised by the results. However I wonder whether yesterdays interest rate cut will increase these figures for November period. I live in a new home development by lend lease- and have not seen any change in the demand for new homes in our area. If anything I think they are selling steadily at the same pace since opening the development in 2009.
mine doesn't automatically sign me in…… so I only sign in when I post.
Wonderful job looks great
Ours were great at getting a tenant, it was never vacant, rental return was best in the suburb for the house type, good price and the rent was always on time (as they made their clients use an electronic direct debt system).
BUT……..
poor inspections…….. where issues are under reported. Eg noted at the 3 month inspection there was some paint coming off the walls. We called and asked about it when we recieved the report. Manager assured us it was only minor superficial and would be fixed. When they left a year later……. it was 1m x 1m of paint missing on a wall….(????)……… our property manager then didnt want to put in a claim because they claimed we rented the house out that way…….we got our money back in the end but there were numerous issues that should have been dealt with during the inspections that was not dealt with. They did their inspection after the tenants left, and said everything was fine. We went and had a look for ourselves……. very shocked as their final inspection was so glowing of the condition of the house….. turns out they got the carpet cleaner to inspect the home (yes I was told the cleaners inspect the house- how would they know the condition of the house they had never even seen the house before). Anyway thank god for bonds (which covered all but a few hundred dollars of damage which was covered by insurance)…….. We learnt our lesson.
ANDCommunication is the biggest one for me though. I found it really hard when I wanted to find out something. Everytime I called it seemed there was a new manager of our house, and a different person for each issue which mean talking to people who didn't communicate with each other.
You've raised an important question "How do you get your money for the next deposit if its not going up in value?" eg the majority of positively geared properties.
For me I like the idea of buying something undervalued, rent below market rent, that needs a quick reno that will boost the value/ and rent, and hold onto it, getting it revalued at the end of the exercise. But again its all about finding, or sniffing out a good deal before someone else with more money than you does. And for me this is taking a while……. but hoping it will get better towards the new year.
We are waiting for the right property, with the right price……. and we're being fussy. Hoping to get back in by early next year
6.86% First Mac
interest only with fully transactional 100% offset account
It normal to be unsure of things, especially when your first starting out.
What level of risk are you willing to take on?
What can you afford?
Do you have DIY skills to tackle a small renovation?These are good questions to ask yourself. Each person in property will tell you a different story on how they made their money, and each one swears by something else. However you need to take the time, and work out what you can afford and how much risk you are willing to take on.
Have a look at the market around, API magazine is good for the numbers on the shape of the capital city markets.
Nothing is guareenteed in property especially in this market. There is a strong movement towards positive gearing verses negative gearing mainly due to the fact most people believe that the market will not grow significantly in the next 10 years therefore the capital growth in "most" areas will not be worth it. Would you keep an underperforming asset if its costing you money?
You sound in a similar position as me. We recently sold our investment property after realising a profit of 80% over 4 years; but we realised that our investment was no longer performing and was losing us money; if we sold a year earlier we would have realised a almost 100% return (the decision to sell has been a sound decision it would turn out now worth even less). This asset was cash neutral/rent wise when we sold. We cut our losses and are now waiting for our next investment- which currently we are leaning towards another renovate and hold- and hopefully either positively or neutrally geared.
Goodluck on your decision. At the end of the day maximise your own skills towards an investment that works for you.
Spring is "typically" a good time to sell as there are "usually" more buyers. What area of Adelaide is the house? If you have based your house price estimate from prices advertised in the area (eg on realestate.com) please note that currently I am observing up to 10% difference (less) of price between advertsed and sold. Prices are regularly now selling for under their advertised prices. In a falling market the longer your house is on the market the more of a reduction may apply. However that said some areas are still in very high demand and sold the first week. So I guess you won't know until you try. I also have a mother in law that is planning on doing the same thing, she refinanced for small mortgage / doubled it, now all the kids have moved out of the 6 bedroom house (she lives on her own), so she is hoping to sell by the end of the year and downsize, her house is located in Adelaide in Modbury Heights.
Anyone else think it was generous of channel 10 rounding the prize to $100,000? I just thought why bother…….
I wonder what the other 5 contestants who went to auction really thought of the process. The show was so flawed, eg 24 becomes 6 who take their houses to auction, but only one keeps the so called profits……… I'm assuming the contestants were paid min wage during their time on the show; but to come out with nothing else. At least on the block they had a fair chance of getting something…… (or at least 3 of them did).
Anyway interesting….
I wasn't surprised myself that half of them didn't make any profit (although as you have mentioned above their definition of a profit is not accurate) – also didn;t count the cost of the swimming pool (as it was a prize).
I picked this one to win from the start mainly due to the fact that it was entry level housing price (eg more buyers, despite the location). Also as it was the cheapest house on the show it didn't have to make a lot of profit to win. They also added m2's to the house.
I was impressed by the quality of the renovations, however the result clearly demonstrates that you need to do your due diligence on any house when renovating for profit. In these times its when you "buy" that you make your money…… by getting an amazing bargain and renovating with a quick turnaround time if possible (dependant on your circumstances of course).
The road ahead is rocky, but I still feel there is money to be made for the smart investors.
