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So do you have to have a credit license to offer vendor finance to a buyer?
Ryan McLean | On Property
http://onproperty.com.au
Email MeMaybe try and sell them on Ebay…there doesn’t seem to be a lot of interest on here for them at the moment.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHey Kerrie,
Firstly, if you go to a property forum and ask whether you should invest in shares or property you will get the same answer every time!!! Property!!! That is what the people in this forum specialise in so they will recommend it everytime. So if you are seriously weighing up shares vs. property don’t ask here.
Property has some advantages to shares. With property you can leverage yourself a lot more. You can borrow 80% and only put down 20% but your get growth on the entire 100% of your property.
If you put $20,000 into shares and they earned you 10% pa. that would be $2,000. Put that $20,000 in to buy a $100,000 property (assuming rent pays for all expenses) and you only get growth of 4% you will still make $4,000 or 20% ROI. So there is a great advantage there.
One of the things I love about property (positive cash flow property in particular) is that rents tend to go up almost every year. Meaning each year your ROI gets better and better and better. Expenses such as electricity, rates etc go up too, but your biggest expense (your mortgage) doesn’t change (unless of course interest rates rise).
This increasing of rents over time means that in 10-20 years (if you buy properly) your passive income will be able to fund your lifestyle.
You can’t increase your wealth exponentially if you aren’t in the game. The more property you buy the more chance you have at growing your wealth.
I specialise in positive cash flow properties. I am NOT a financial advisor. But if you have any questions you want to ask you can contact me at http://cashflowinvestor.com.au/contact
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Richard – Who are the three standard lenders that will lend to a hybrid trust?
Ryan McLean | On Property
http://onproperty.com.au
Email MeI was going to say what sonyasai said. Maybe try and lower your rents. If you can lower your rent and get someone in there for 6 months, maybe in 6 months time your situation might change and you will be able to charge a higher rent again.
Ryan McLean | On Property
http://onproperty.com.au
Email MeOne of the major risks with 1 Bedders is if they are under 50 Sq M. My parents owned one of these and it was difficult to sell as the buyers couldn’t get finance from traditional lenders. But at 63 Sq M’s you shouldn’t have a problem with this.
As everyone said, as long as there is demand for them then prices will go up. I had friends who paid over $400,000 for a one bedroom unit when houses in the area were $600-$650k. But there was the demand for a 1 Bedder with a big living area and a great view.
@ Richard – It is interesting to know that you are an investor as well as a finance broker. A block of 14 units sounds like a nice thing to own. I definately want to invest in blocks of units once I get my experience and capital up.
Ryan McLean | On Property
http://onproperty.com.au
Email MeI would probably have to agree with what everyone else has said. 2-3 years is a long time and a lot can happen in the rental market in that time.
In the last 3 years rents in some parts of Sydney have increased by over 15%. If market rent is $290/week in 3 years it could be $335/week. meaning you would be renting your property for $45/week under market value. That is a whopping $2,340/year that could be going into your pocket and is instead going into your tenants pocket.
Don’t be scared of vacancies. If your property is good quality and in line with market rent, then what are you worrying about? In my opinion people tend to stress too much about vacancies.
In 3 years time, if market rent is $335/week you can afford to have your property vacant for almost 7 weeks a year and still earn the same amount as if you have 0 vacancies at $290/week. That is a figure to chew on.
Good luck with your decision.
Ryan McLean | On Property
http://onproperty.com.au
Email MeThis sounds weird and risky to me. You see this all the time with units (strata titles), but not so much with houses.
Be careful as to WHO exactly owns the land. Do you both own it? Does one person own it?
If you both share the land then you will likely have to pay strata fees. Strata fees help pay for the maintenance on common ground. These fees could increase your expenses and decrease your return on investment.
Ryan McLean | On Property
http://onproperty.com.au
Email MeREMEMBER you are in the property business to make a profit. If you want to give to charity then give to charity, but letting an old lady live in your property for $60/week ($3,120/year) under value seems stupid to me.
If the old lady lived anywhere else she would have to pay market rent there, so why shouldn’t she pay market rent where she lives with you. You are not doing anything wrong by increasing the value of your investment.
Inflation causes the value of money to go down every year. If you are not raising your rents on a yearly basis then you are going backwards.
If it was me, I would renovate the property and bring it up to market rent. Then if the couple/old lady want to rent it out they can…if they can’t afford it they will go elsewhere. If properties in your area are renting well then you shouldnt have a problem with vacancies.
You could even afford to have your property vacant for 16 weeks (almost 4 whole months) per year at market rent and you would make the same amount as if you had 0 vacancies and charging $125/week.
Be smart and look at this as an investment not a charity and then make your decision (whatever that may be).
ps. I am not saying this to be harsh. Charging market value for your product (which in this case is your rental property) is not cruel or mean in any way. It is the norm.
Ryan McLean | On Property
http://onproperty.com.au
Email Mehomersyd wrote:maree_bradross wrote:No-one will be cheaper than yourself
I know…but we dont want to stuff it up as I’m not handy at all…
You don’t have to be especially handy in order to paint a house.
If you are painting your house to rent it out make sure you choose neutral colours. By choosing stark colours you are limiting your market.
My wife is extremely handy and she is a genius when it comes to choosing paint colours and she loves painting. I would almost offer her services to you…but she is not a professional painter…she just loves making properties look awesome.
Good luck
Ryan McLean | On Property
http://onproperty.com.au
Email MeI haven’t used a buyer’s agent before, and the way I invest I doubt I will ever need to. Your situation is unique as you are after a very specific type of property so a buyer’s agent might be of assistance to you.
Make sure you understand all of their fees before you sign up with them. Usually (from my understanding) there is an upfront fee, and then when you sign on your property you have to pay a percentage of the purchase price (around 2%). Your initial deposit is taken off this 2%. But read through their fees and make sure you understand them.
Buying a large block of land in Sydney will cost you a lot of money. The more you pay, the more you have to pay your buyer’s agent. If you buy a property worth $1,000,000 then your 2% will be $20,000 ON TOP OF the purchase price. So be aware of that.
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Trev – You should probably speak to your accountant or solicitor on this matter as they can offer you professional advice.
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Sonyasai – No usually bins are taken out when you live in apartment buildings, each person does not have their own bin….there are communal bins for everyone and a service is generally hired to take them out. Either that or one of the tenants is responsible for it.
@ Sofija – Good luck with getting a new body corporate. It definately sounds like you need a new one. I would be worried if your lift is breaking down every couple of weeks and it is a low rise building. Might be something to look into for a more long term solution.
I don’t think $1,600pa. is that expensive. My parents both own units in smaller blocks than yours and they have to pay around $2,000pa. and they don’t have any pools/gyms or anything like that.
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Richard – Isn’t the FHOG only specific about this for married and defacto relationships. If moira is not married or in a defacto relationship then wouldn’t she be able to get around these regulations?
Ryan McLean | On Property
http://onproperty.com.au
Email MeYou need to be careful with these types of investments, as often your property is rented out by the motel managers. If the crap hits the fan (and sometimes it does) you want to make sure you have an exit strategy.
These types of properties can be hard to sell if the motel isn’t making any money. And if the motel shuts down you might want to make sure the room you buy can then be turned into a one bedroom or study apartment.
Motels are a niche market, to minimise your downside you can make sure you can convert the motel room into an apartment if need be. If you can’t convert it then it could be risky
Ryan McLean | On Property
http://onproperty.com.au
Email MeI was worried about this when I was purchasing my first investment property. I decided to purchase with a trust…mainly for asset protection, but as a bonus so I could still get the FHOG when I was ready to buy my own home.
Good to know that you can invest in your own name and still get the FHOG
Ryan McLean | On Property
http://onproperty.com.au
Email MeThanks for the infor guys. I didn’t realise that it cost $20,000 to subdivide, that is pretty expensive and only really worth it for me if I was to build another house, which currently I don’t want to do. I think I will let it slide at this stage until I have more capital and time to go through the subdivision process.
Ryan McLean | On Property
http://onproperty.com.au
Email MeHey Kevin,
Keep us in the loop and let us know how this goes for you. It would be a great case study so everyone reading this thread can learn.
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ Young Investor – I think we are on similar pages. I think the the faster your can buy property the more you can take advantage of the growth and you can build wealth quicker. So if renting out your home puts you in a position to buy 1 or 2 more investment properties you would then be getting growth in 2-3 properties instead of one.
I am only 22 and I am so glad that I have started investing now. I worked out that I only need to own 8 bottom of the barrel properties in order to be financially free. I have 40 years until I am meant to retire, so all I would have to do is buy one property every 5 years and use the rent to pay off the mortgage, and then use the equity to buy the next property. Once I bought the first property I probably wouldn’t have to save any more…just keep putting the profits back into it.
By the time I was 65 I would be financially free. It is so easy when you start young.
I definately plan on moving a lot quicker than that though…but that just gives you an idea of how good it is to start young. Good luck with everything
Ryan McLean | On Property
http://onproperty.com.au
Email Me@ God_of_Money – I would be interested to find out how you go talking to property managers before you talk to the salesmen. This is an interesting technique that I have never heard of before. I would like to know if it works or not.
Ryan McLean | On Property
http://onproperty.com.au
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