Forum Replies Created
Hi,
I believe the over 55’s units are good low cost entry into investing or a great general cash + investment, which supports debt servicing as ones portfolio grows.
One key item is the Manager – what is their tenant turnover like – if the tenants are not happy they will move on like any property. See what seniors competition is within a 5 or 10 km radius. These units are for low/mid income/pensioners so high cost/middle class plus communities are not really competition. Must also have within 2 km or so a doctor, hairdresser, supermarket, etc. A milk bar, newsagent and bustrain within very easy walking distance.
Your capital gain will be moderate and should be just ahead of inflation.
The cash flow must be positive, all body corp & agreement costs clear, etc.
The Management agreement must have a termination clause so can get rid of Mgr and also same for bidy corp Mgr if they don’t perform. They usually have 10 – 20 yr license/management agreements or ownership.
I can help with the numbers if you wish. I am currently involved in the development of a similar community, have bought same also.
e mail me on [email protected] if you want specific info. I don’t get on forum very often so may not be able to contribute in near future.
Regards,Steven B
Hi Jenny,
I agree that if internal & not load bearing no problem. If load bearing I still don’t think you need permit, just structural calc’s to ensure is safe by an engineer.
With the fence, I know you may need a permit with some councils in Vic.
Have a look on your councils website with all this stuff, usually informative. Maybe ring them and ask the questions so they can’t hand you a form. Most building dept’s are OK on the phone, but they can be conservative.
Best of luck with the work.
Regards,Ronny
Hi Sanjiv,
Your strategy sounds good. I think the Dandenong area has been a little under priced in general the last few years, not too much though. I was looking in Eummemerang ( or however you spell it) not too long ago.
I think you need a property of reasonably good standard, close to public transport, etc in this area.
I agree that the standard of tennant may be an issue also.
best of luckSteve B
Hi Wayne,
great success story on the back of great capital gains. Great equity available as foundation to continue to grow portfolio.
I think most property investors get to a point where debt servicing restricts growth during the building of a portflio.
Cash +/+geared properties should always allow growth, but most of us know that capital growth and $+ properties are rarely strong together in one property for a long period of time. This is a generalisation of course and there are exceptions – maybe you can find one.
I have approx 20% of portfolio with stronger cash flow knowing the properties will not have explosive cap growth in a cycle, but maybe consistant, moderate growth.
I have sent you a private e-mail outlining an opportunity which I think would contravene forum rules to talk about too much.
best of luck,
RonnyHave 14 props (ex residence) with current LVR of about 60% – plenty of equity left. Cost about 7K pa to own before tax – positive after tax. 1st one approx 10yrs ago, next couple over a few years, then got into it. Could have done a lot faster but was very conservative back then.
Target positive geared when possible, but always cash positive after tax. Always borrow atleast 100% of purchase price.
Few off the plans on the go – for cash flow not capital growth, and some development.
Looking to bust the rat race 2010.
Get into it – look for properties and opportunities maybe little different for +cf these days.
Good luck – the first 2 or 3 are the hardest.
RonnyBenalla has its fair share of low income population, of which some can be a bit rough. Seems like a reasonable buy without knowing/seeing the properties. I suggest they would be cash+.
For a Lawyer try Jeff Francis on 03 5721 8300 if you hav’nt found someone yet. He is from Wangaratta but does a fair slice of Benalla’s legal business – not much to choose from in Benalla I believe.
Regards
RonnyHi katfrat,
ask for referee’s, ask for randam selected with names starting with a particular letter so hard for them to specifically select. They may not give to you due to privacy issues, but say you just want name & phone number.
I have found PM with larger rent rolls with multiple staff in dept do a better job and larger franchised agencies also, as they can get support if need be.good luck
ronnieHi Pipe,
add 12 to 15K equity to what you have got, use your time to find a small 100 – 120K or so IP thats CF+ and your away. Start small – grow over time. No equity – got something to sell to get more starter cash????
Get your noodle working hard enough and you’ll find a way. get into it.
RonnyYour expenses are deductable anyway. Sounds like what your asking is, for example, can I have a vehicle as tool of trade, claim full cost/expense, etc aginst income of work done on your own property.
Theoretically you could do this but with little advantage or significant increased risk of claiming unjustifyable expenses – could be dangerous.
I am far from an advisor in such matters, and only my opinion and what I have learnt, however you could operate in one business/tax entity and have properties in another, but the net result could probably be the same with more complex affairs. It could also depend on what else you do for income, other entities you may have or operate.
This ones for the experts, and dependant on your own situation.
Remember, you can minimize tax, but is not cricket to avoid tax. The key I suppose is to learn or be advised within the rules.
Good luck.Keenaz,
one way would to be get out and look at deals, do the numbers, study the market/s, look at what ifs, Study prices, movements, returns, cash flows, etc.
Put the time in when you can to learn as Dr X suggests.
best of luckI am told and hear that lenders don’t like less than 50m2 but I have not had a problem, using equity though – so I suppose any more than 80% LVR might be a problem without other equity or the balance in cash. Your student accom deal seems too good to be tru.
I concur with other posts, but remember in addition to the completed value, presuming you will hold for a time and rent out, research earning potential. If in a large development they will probably all come onto the rental market at the same time so may have to wait a little longer to let. Look to offer or add something to differentiate from the others to let quicker with opportunity for better income. keep your eye on during construction if possible to ensure your getting what you commited to – easier to correct issues/problems, if any, whilst under const than when completed. Should get better value if buy prior to const commencing.
in my view still good deals to be had OTP if look and wait.
All the best.I reckon half of you are bored
Hi,
I don’t know about a bust or not. I do know good yields & deals are harder find, but CF+ still around in Aus, just need to be patient and keep looking, maybe think a bit differently. I personally don’t see a lot of future with neg geared – restricts no of properties over time, gearing, servicability, etc. Little capital gain currently so CF+ producing better and allows to build pertfolio using other peoples (read bank) money – not yours.
Steve BHi,
you have a few goals. list them and prioritize. get some professional advise on best how to achive the goals and maximise use of cash. In regard to purchasing an IP – do from a pure business/return perspective and a distance away from you, so you don’t spend half your time looking at it – the novelty wears off over time anyway, especially as your portfolio grows. Make an informed & researched decision and get on with it.
All the best
Steve BHi BG,
I have looked about in most of the area’s you mention in the past two years. Maidstone probably the best – In the “ring”, has had a fair bit of price growth but maybe have more to go. This area of western suburbs gaining momentum. Seymour & Churchill overpriced now maybe and as you say limitd markets. Melton may have some potential over time. Craigeburn????. St Albans may be a sleeper with potential in 2/3 years plus. These are just my perceptions only and not intended to be advice.
Don’t restrict your thinking and research.
Steve BHi Clones,
I am far from an expert in all markets, however with a little equity you can purchase a cash positive property with someone elses money, cash on cash return can be huge. Also can use equity and gear on trading markets but probably not more than 50 or 60% – cash on cash return much lower. A company can go bust and dissapear up its proverbial, property may stagnate, even reduce in value a few % but over time is possibly more stable. remember – cash on cash return.
Steve BIndigo V
get a cf+ property with little or no money down. Use a bank garuantee as deposit – see what equity you have available, it may be more then 10K. get advice and a good Bank Manager or funder – build a good relationship with then – you will be surprised what one can achieve – there’s plenty of others cash out there to use. Find a way to accelerate.
Steve BHi Beegee,
why not do both. Get cash+ IP as well as pay down your mortgage as much as you can or even faster over time. You’ve got plenty of equity to borrow against – if you purchase and is CF+ and/or +geared you can maintain or increase rate of mortgage reduction. There are plenty of other influences & factors such as lifestyle, aspirations etc. to obviously consider. You may be in a position to purchase more than one cf+ property. I am not qualified to advise and these are my thoughts only.
All the best.
Steve BHi there. My experience is if that everyone is talking about it, its either old news or close to it. I’m with Mort Hunter – they are around you in Aus and antwhere else, just have to look and look some more.I’m sure there are good deals In USA & NZ also. Subscribe to API magazine and find out what is old news, so you may not waste time looking in a particular area.
Best of luck.Steve B
