[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 13, 2008 - 10:20 am

I'd buy it, if it was done well. Or is there a large bathroom that could take a laundry?

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 12, 2008 - 11:29 am

I've never bought land alone, but in this market it can't hurt to make an offer, they can only say No

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 11, 2008 - 1:07 pm

This is why you would look for a cash flow positive property, ie one where rent + tax deduction exceeds interest + other costs. Then you can afford to hold it and benefit from even low growth. Also if it is CF+ when you buy it, rents should increase more than interest + other costs over time so it may start making money.

Certainly a really good question imo, for many properties I think you are right, holding costs can exceed growth.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 11, 2008 - 1:01 pm

Most bank websites have calculators online where you can enter the amount of the loan, term and interest rate and calculate repayments.

I think you'd be better off using a more traditional deposit.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 10, 2008 - 12:33 pm

Total equity of 20% would be considered reasonable (provided you can service the loans – including if things go a bit awry eg interest rates, vacancy).

So if you have two units valued at $200,000 each, 20% of that would be $80,000. On your workings above you would be close to that after 12 months.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 7, 2008 - 1:18 pm

Depends on two things – the numbers, and whether you care about the numbers or are focussing on lifestyle.

You need to add up the additional costs (purchase and ongoing) in buying 3 versus one, and the rents incoming, and deduct your rent. Then you need to estimate growth from the three versus the one (tricky of course, but history may guide) over the two years. And if the numbers matter to you, go with the best deal.

However as it's your PPOR, you also need to consider the lifestyle aspects. You may choose the more expensive option for the security and comfort of having a nice PPOR.

Whichever way you go, with your income you should be able to make a dent in the loan/s pretty quickly.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 7, 2008 - 12:41 pm

Unfortunately some people are easily persuaded to take certain actions, and the bank employees may have incentives to get people to take out loans. Not everyone is particularly financially literate, or good with numbers, or particularly bright, and they can get into trouble very easily. Most people can be educated but some need protection.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 5, 2008 - 10:37 am

I would go with your solicitor on this one.

It appears the buyer is trying to get a bigger loan with minimal security  – ie to mislead his bank – and also will be an incorrect value for stamp duty and valuations – I'm no expert in this area but I think your solicitor is likely to be and has advised correctly.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 4, 2008 - 8:27 am

I think, even with forecast price drops, the nature of the market at the moment provides the opportunity for a bargain. Don't rush in but look extensively (no rush with so much for sale) and make a very cheeky offer when you find a highly motivated seller with a nice property.

You might also want to look at some of the regional centres such as Kalgoorlie, for comparison. For cash flow purposes the regions are looking stronger atm.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 4, 2008 - 8:22 am

We have our PPOR and one IP in Perth. The IP is an older style unit in Daglish which we've had since 1996.

I think Perth is still priced pretty high and returns are not great atm.

Not much of a msn user but you can PM questions if you like.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 3, 2008 - 9:39 am

A or B depending how they are counted (1 is set of 4 units).

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 2, 2008 - 2:08 pm

Give consumer affairs Victoria a ring on Monday. Details here http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Renting?OpenDocument&1=910-Renting~&2=~&3=~ .

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 2, 2008 - 2:01 pm

Move on, why have they not told you about the extra pets if nothing else; they know you are interstate and are slacking off because of it. With the next agent could you get a few photos sent to you with the inspection reports?

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 1, 2008 - 11:34 pm

A member of my family has a house which she lets for holiday accomodation (furnished) with the assistance of the local tourist information centre and a local cleaner. Would it be possible to get an agent for this type of letting? Get some prices for mgt and cleaning and see if they add up.

The other thing you could do is sell it and buy a "traditional" investment property with good yield; you could pay for your holidays with the savings in your outgoings and also holiday in more places.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 1, 2008 - 11:30 pm

Agree with mpertile, get some legal advice and add up the costs of (presumably) loss of deposit plus fees, against possibly buying again at a cheaper price.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 1, 2008 - 11:39 am

How much was the deposit?

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

August 1, 2008 - 11:36 am

You only lose it if you sell. How long are you planning to hold it? As long as you can handle the repayments on your income including interest rate rises, and are holding it medium-longer term, should be fine. Over the last 25 years property has averaged 8% gain a year and there's no reason the long term future growth shouldn't be similar.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

July 27, 2008 - 12:52 am

Where are you? You want a growth market to do the "simple flips" I reckon, or costs and risks outweight gains.

Also you will need to be extremely selective in your properties to be able to "draw income" from them without a large deposit. You may have difficulty finding such properties in capital cities.

Do plenty of research on vacancy rates and population growth rates in your target area, and do your sums very carefully. It's very easy to buy a moneypit that sucks up your spare cash and prevents you buying anything else.

Negativity aside your concept may work if you put enough time aside to do the research on your purchases and the improvements.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

July 26, 2008 - 2:44 pm

Thanks Scott, much appreciated.

[sallyannMember@sallyannJoin Date: 2005Post Count: 53]

July 26, 2008 - 2:38 pm

Your link didn't work for me but why would they need to promise a return? If it was a good investment it shouldn't need guarantees. Do your sums, look at what similar properties in the area rent for and the vacancy rate for the area, population growth rate etc. Also make sure you compare rents/vacancy rates for properties of similar floor area and facilities.

There are some higher risks in off the plan – ie buying sight unseen, and not knowing if the price in the area would rise or fall over the two year period, and some contracts allow the seller to raise the price before settlement. But if you can afford some risk etc and the figures work, worth thinking about.