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sammmeee, definitely go with your price of $275K. If they say yes, you're done! Easy
If they say no, make a lot of noises along the lines of, 'Oh….. that's disappointing….. my (wife/partner/OH/whatever) really doesn't want to pay above that…… s/he says it's not worth it to him/her to pay any more…….' then finish the call with, 'I'll talk to him/her and let you know by COB tomorrow.'
Don't call them by COB tomorrow – leave it another day or so, then call back – with $280K.
Trust me, this works like a charm! This is exactly how we've done it on many occasions and it's worked every time. Easy
And remember, have fun! As somebody once said, the bargain of the year appears on a weekly basis
Good luck!!
PS: I agree, it's definitely a buyer's market at the moment…. use it to your advantage.
There are definitely ways to turn a -vely geared property into a positively geared one. Of our four properties, two are +ve cash flow, and the other two are +vely geared after taking tax returns into account. Our strategy is as follows:
1. Only buy places that need some work (you can negotiate a much better price if it's unappealing – it's amazing how many people don't want to do simple things like paint, etc); and
2. Once it's ready to rent, we fully furnish it and rent it out with all linen, crockery, cutlery etc. This increases your rental income substantially. To do this though the property needs to be in a suitable location – walking distance to shops, public transport, etc, so it means your initial selection of property does need to be careful and take these things into consideration.We like this approach, especially as we do all the work ourselves, from the renos after purchasing, through to property management, cleaning and repairs, etc etc. You could argue that we don't put a dollar value on our time for all this, which is correct – but if we don't do this, my OH's favourite past time is computer games! So our spare time isn't exactly used to good effect normally
We haven't got into development as yet (we tend to buy units, renovate, furnish, then hold) but in my RE travels I've noticed both Balga and Osborne Park look like good candidates for capital growth – relatively close to the CBD, larger blocks with old houses still available, etc. If I could convince the husband, that's what we'd be doing, but he's a bit more risk averse than I am
We do the same thing. In fact we bought a property just under two years ago, renovated it (did a lot of the work ourselves) and just sold it for an amount 30% higher than the original price. Not bad in a market supposed to be fairly flat. Apart from completely renovating it, we added furniture, and tenanted it for an excellent price, which made it very appealing to a 'set and forget' investor market (we ended up selling to an investor rather than a home owner, which was what we anticipated would happen).
We always offer a low price. This is helped by the fact that we always go for places that need some work – so many people are put off by bathrooms/kitchens that need renovating. Even just having a filthy tenant can put buyers off, they can't see how a coat of paint could change the look of the whole place.
We prefer to wait until the property has been on the market for a few weeks. That way, if there's little interest, it's given the vendors time to realise that their asking price might be too ambitious, and therefore be more flexible.
I usually do the legwork, ie. view the property by myself. I'm quite happy to tell the RE agent things like, 'I'm keen but it's not worth the asking price' if I think this is the case, together with, 'I'm keen but my husband hates renovating, and he's the one I'd have to convince'. Both these statements are true, hence I have no problems being upfront.
I also tend to be fairly guarded about the info I give out. In some circumstances I say as little as possible. In others, I'm happy to be fairly upfront. It depends what works in a given situation. For example we're currently looking at two different properties. I've let both agents know that theirs is not the only property we're looking at. Both need work, and have been on the market for a little while, in suburbs that generally sell very quickly. I also get the impression (from the agents themselves) that the vendors are motivated, which always helps!
It does help to know why the vendors are selling. Sometimes agents won't/can't tell you, which is fine, they have no obligation to pass this info on. You can usually gauge from the agent how motivated the vendor is by their actions – one of the agents called me today after another unattended home open, to try to 'suss out' our intentions. I was very upfront with her, and at the end of the conversation she said (twice) 'You know, it's a very good market for you to buy right now'. I can't help but think that this was a bit of a hint to put in another offer (we put one in a couple of weeks ago that was 'too low' so the vendors didn't even budge from their asking price, but it's amazing what happens in two weeks!).
Anyhow, these are just our experiences – it varies widely. But it's all part of the fun
