Forum Replies Created
Thanks Fredo. Yes, I saw that post too and posted in that thread. I hesitated to add another Toowoomba thread – but that's what I came to PI for. First time I've dropped in for a while. Might as well try and get the information I need. Cheers.
Hello xdrew,
The value equation is what we normally go for. We like entry level housing on freehold land. Buildings which need little maintenance, target a retiree tenant. Good location, but cheap stuff needing next to no work.
Yes, we are enthusiastic. Concerned not to miss out on a very cheap deal – yes. Good sales person? I think we are excellent sales people and we sold it to ourselves. The agent, who does quite a bit of business with our business, wasn't very enthusiastic. They have even been quite negative about the tenable quality of the property.
Is it a problem rather than a solution? Quite possibly. The property is priced slightly above block value. Another house in much worse condition, but with a larger block and a half decent shed sold across the road for $40K just recently. We believe we are buying below the market. Another vendor, diagonally across the road recently turned down and offer of $15K on a house which has a condemnation order on it – chasing $25 apparantly.i do wonder if perhaps tenants expect better living conditions than I have put up with in the past. Are we out of touch with what is expected? But then, there is a real accommodation shortage in this town, and people do live a bit rougher here than in, say Townsville.
We DO like it. It is just nice. It has an appeal – it is one of those old houses that feel historic, rather than just crappy. It has great shade, which is important up here. We CAN afford it. We can afford for it to go empty. We can afford to learn a lesson. And we could do with a wet season project.
The down side is really that it will just occupy a bit of cash that we might have used for something else, or put in an offset against another loan. There is another property that could come up next door to our ppor and when it does we want to buy it, but might hesitate to do that if we buy this little renter.
To me, the greatest up side is that it is a good little wet season project and seems like a fairly low risk way for us to learn about adding value for profit. It's a new recipe to try – a new adventure.
As they often say, you make the money on the buy, and I'm confident that it is a very good price to pay for this property.
Hello Matthew – how interesting.
How about something about the ways in which the mining industry has affected residential property in Australia, both directly and indirectly, and the risks posed to those communities affected? Not only property value, but also in a macroeconomic context, the concept of a dual speed economy.
Or how about the future of residential development in Australia's large urban centres – how does the face of the great Australian Dream change over time and what will it look like, and who will be able to afford it in 50 years?I'll weigh in and say get your own equity to gamble with. Leave Mum and Dad alone.
Hey Nathan, I was drawn to your post as we have just found a $15K house to buy, in the NW QLD town in which we live. Livable, original condition depression era home. Corrugated iron construction typical of outback homes of its time. Main building is solid. Last tenants which just left were paying $80 pw. It will be our fourth investment property and the first time we venture in to value adding / renovation. Pretty keen to keep all the costs down – which is hard given our location. Any tips gladly received. Found a retired builder happy to work for us for $25 per hr. We're not very handy but can use a paint brush, and a lawnmower. We see it as an ideal learning opportunity. Pretty amazed with how much you reckon it will cost you to fix that burnt out house – are you a tradie – therefore your own labour time not counted in the cost?
Cheers
SHGood points. OK, net profit, per week, after tax is $30. This is taking in to account interest at the rate that we currently pay against property, over 100% of the purchase price, because if we didn't buy this we would probably pay that money off that loan.
The insurance cost is the same as it is for my other properties, which are worth much more – basically because the building cost is similar.
So, if we get it for $12K, the ROI after tax is about 13%. Assuming 100% occupancy. We may have already lined up a tenant.
I wonder at what point do you stop being concerned about resale value and just focus on the cash flow return.
If I didnt know this town very well, I would have strong concerns about the resale value of the property. However, I do know the town and it's economy quite well, and feel confident enough to spend that sort of money. There are houses that sit ont the market here for ages, but anything cheap tends to get snapped up pretty quick.
Our investment properties are all insured through nab / allianz – and they didn't bat an eyelid. Didn't even ask any questions. Asked about the age and construction. My personal feeling is that if the structure is not sound, it is not worth doing. Same for electricals.
I've got a builder and an electrician as mates, so we'll get them to have a quick look…
Yeah, we pay more than that it tax. A few times over. Tax consequences would depend upon which business structure we use to buy it. Probably I'd lead towards the family trust which has just bought a property and has low / negative taxable income now. Council has some of the cheapest rates around the state, and the only unusual thing about the council is that they tend to make less absurd demands than other councils do. My husband keeps saying, but if we have to do X & Y, then the house might cost $30K…. So what? Renovated the house is probably worth between $100K and $150, for a quick sale.
Thanks fo the suggestions. Great stuff. I've drafted a letter and sent it to the new pm to look over. It is tricky as we are in the middle of lease renewal with a long term tenant, too. Won't manage myself as it is about 1500km from where I live. Cheers.
Jeez…. That was a while ago. I wonder where that document would be now. Brings to mind actually, the different time lines we need to file documents for…. Sometimes you need to find it 10 years later…
Thanks.Hi,
Thanks for the replies. I haven't got that much information from them. We live in a remote part of QLD, and they have offered to pay half our air fares to fly to Brisbane to see someone. That got us a bit nervous. I'm going to give it a big miss. We have paid off both our PPOR and our investment property, and we have other investments which we own outright too. It is time to spend again and borrow money, but we want to be fairly careful first. My brother is going to do the RESULTS programme, and I'd love to do it to, but being remote, it is hard to act smartly on RE, and to be thoroughly well informed about your market. So, I'm not sure that we will have the opportunity to actually use that knowledge, we would be better waiting until we are located closer to a market so we can use the knowledge straight away. Anyway, I guess I'll give this lot a big miss. For me, the fact that they are selling property, and that they want $ up front are both a big no no. They hadn't told me that part yet.
Cheers
SHJulia Gillard said something really stupid (surprise) on TV the other day.
She said: If you vote for Tony Abbott, guess what, you'll get Tony Abbott"I bloody well hope so!
And why oh why are the Greens not all upset about this whole CSG water poisoning thing? Labour just chews through money, and anything that lines their coffers is good. Environmentalism is only a priority when it costs someone else (like farmers) money.
What's that statistic on TV $100 000 000 a day more debt. Incredible., Wonder what sort of ROI they are going to get? They suck
Ben! I drift back onto this site again, and here you are. Getting noticed again. You funny bastard, are you making money out of this stuff yet?
Are you responsible for these invest your super in property emails I've been getting?
Good to see you're still going. How long till bub is due? Be nice to Nicky, pregnancy sucks. You'll have to grow a spine when you become a Dad. "No, don't burn your sisters hair, noo, no – oh, okay then."House Call wrote:You are a very good writer. You should send this story into one of those property magazines for publishing. The whole thing was hilarious.My suggestion is go buy yourself a "renovator's dream" and then after each day's work (which you must do yourself, because as your good wife correctly points out, it IS good for you) then write a little spiel for us punters to cackle at while we relax after our day.
Ah, Ben, its been a while since I dropped in here. Glad to see you are still here writing this stuff. I've made the above suggestion to you before, and I'll second House Call again now. What you've got here, what you've done in the past, that's got to be marketable man. You reckon you can sell ice to eskimos. Sell this.
S5 stars for imagination – talk to an accountant!
SThanks Richard, we bank with nab at the moment, and have a business banking manager, so that is good to hear. nab have always been pretty good to us actually. The one time they turned us down it turned out to be just as well.
cheers
SI've used a RE agent as a buyers agent, informally. Gave the REagent a brief about what I was looking for, and he found it, listed with another agent, negotiated a deal between the two of them to share the commission and brought us to inspect the house. We looked at a few houses, bought one of them which matched his brief perfectly and were very happy with the whole arrangement. I've since asked other agents to do the same thing for me, and found they're not interested. When buying in another city, I found it really cut down on time looking at properties, I also found my RE agent to be quite a cut throat negotiator and he got us a good price. I've since tried to do business with him again but I can't find him, and one of his competitors told me that he had become an alcoholic and dropped off the radar, but then again, RE agents will tell you anything. Wonder he didn't tell me old mate had been abducted by aliens.
Thanks both for the comment.
I wouldn't call 100ac plus a really large rural deal, where I live, entry level is 10000 acres. The big places are 350000 acres. I've worked on a place that was 2000000 acres.
I am talking true agri lending and it was nice to hear from someone who seems to know this particular sector quite well.
Best to bide my time a little longer, I think. The tighter lvr coupled with the end of the drought and drought subsidy may see some sort of price correction in agri, I hope. There's lots of people like us who made a plan 10 years ago to build up sufficient assets to get into farming or some sort, and we've met the goal. Thing is the price of land has tripled and quadrupled during the drought – insane policy, and we don't have a hope in hell now of getting in.
Yet, I see places sitting on the market for quite a while. Seller expectations have not adjusted and anyone who doesn't HAVE to sell is still waiting for those big $. The big $ are just not there. Those already in the market know that it is at the top, those not in the market can't afford to get in unless they have significant other assets. Those with significant other assets know greater ROI is available elsewhere.
We'll wait. Thanks for the replies.
Sjohntaps wrote:What do you think is important?Brevity.
Ha ha. John, I think you are an absolute wealth of information sources, and I just don't have time to do these resources justice. I'd love to store all your links away for future reference, but I guess I can always run a search on your username and it will be right here.
The idea of analysing a specific suburb is a good one, but I just don't have the time to do it personally at the moment. Wouldn't it be necessary to research several suburbs so you could compare them and choose which best suits your needs?I really need to do an income tax return and tax planning so I can borrow some money, and this must take precedence at the moment. The tax office has some of my money and I want it back. Damn PAYG Instalment tax
S
sonyasal wrote:There is a difference between buying in a town with a population of 650 and a town or regional city with a population of 30,000, with strong rental demand and steady or growing employment prospects.Sonya
Naturally. My observations were quite specific to small towns.Gabriel Torres wrote:I learned to close my mouth and listen without given a solution to everythingGabriel.Very very good.
And Kylie, I agree, we women are responsible for our own emotional resilience.
I think that in the relationships dept, my DH and I have a head start cause we grew up in families with a functional marriage. We saw how our parents loved and respected one another and we naturally emulate that. I believe it would be much harder, and perhaps this is where these books really come in handy, if you had grown up in a family where the marriage wasn't loving and respectful.
I also agree, Kylie, that women shouldn't expect too much of their husbands. While your routine sounds a little like that of a young couple without children (all that talking and reading and no distractions), it is nice you are getting this time in now. I do demand a bit from my DH, but I also fully support every escape he makes. If he wants to go fishing, I'm only too happy for him to take that time, be it a couple of hours or a week away. Similarly, he supports my every move towards recreation for myself. When you get stuck in the routine of kids, the demands on both of you are many and endless. There isn't enough time in the day, or enough energy, and things still need to be done. We work together to get everything done in the home, in the business, in raising the kids, in the garden. When you are working this hard, it is important to have fun and to take time for yourself. My husband fishes, I am an ammateur performing singer and volunteer choir mistress at the local primary school.
Fun is important.S
