If the numbers you put up hold true then I would build the units. If you don’t have the cash to do the deal find a partner and do it. OR get approved plans and onsell it to a builder.

Wouldn’t hold it for rental, you can get that kind of return in more premium metro areas, would not settle for that return in a regional area.

Slum Lord

westan,

That makes sense. I must admit I have started to focus on diversification myself. Once you acquire enough properties you begin to realise that vacancy rate is probably your number one risk.

I am getting to the stage where I am paying down debt and protecting myself against interest rate hikes but even then the one thing that could…[Read more]

Powmow,

Once I figured out it was the wrong house I tried to set a time to have a look inside, but was unable to set a time the tenant would agree too. I got a building inspector to go through it and it was structurally sound, the agent told me it looked the same as the other house on the inside.

The managing agents are a problem, I should have…[Read more]

Yah, total cost of house: Purchase Price + reno + stamp duty, etc you want to make 20% on top of that. So if the total costs is say 265k, you want to make 20% on top of that which is 53k, need to sell for $318k.

As a rule you shouldn’t have to take something on that you don’t expect to make 20% on. And don’t tie yourself to straight renos only,…[Read more]

Story: Bought the wrong house

Agent was confused, had a few houses that looked about the same. Got to look in one, was not able to get a look in the other. Made an offer on the house I had seen and the agent wrote the deal for the wrong house.

The house I thought I bought had a brand new kitchen, new paint inside, and a single garage.

The…[Read more]

westan,

Why would you sell a property with a 17% return?

Slum Lord

As a rule I don’t listen to accountants on investment advice, if they really knew the investment game then chances are they wouldn’t be accountants anymore.

If you are looking for Tax advice then a good accountant is what you need.

If you want investment advice then you need to speak to rich people.

Slum Lord

Not very good rental returns, even renovated. If you could buy renovate and sell for 312k or it would be worth it.

When looking for reno/development projects you should typical use 20% margin as your minimum, there are plenty of projects out there that can make you 20% if you look.

As far as holding it after reno, you’re talking about a return l…[Read more]

Be careful in that region, Nhill is in an area of significant population decline.

Slum Lord

I have been to Woodend a number of times, its a great little town and the people are much warmer than your average city person. Plus it not all the far from Melbounre.

Slum Lord

Focus on building rapport with the agent. Have them tell you about the local area and be impressed and grateful for their knowledge. Let them know you like them and pay them some complements, on their car, their skill in presenting the house, or whatever. I find if you build rapport you can then ask them direct questions and get real answers.

Slum Lord

QLD has strong population growth.

The Majority of this growth is from Sydney and Melbourne migration.

Home owners in Sydney and Melbourne are selling their homes (many that have doubled in price in the last 5 years alone)

The most cashed up buyers in the entire country are heading to QLD, while overseas immigrants are taking there places in VIC…[Read more]

Over the last 35 years rents have not moved inline with property prices, in fact the rental yield has continued to fall.

You will actually find that in regional areas people invest with the expectation of good rental returns.

In the major cities over the past 5 years the property prices have gone up while the rental has been stagnate or slowly…[Read more]

I own a fair bit of stuff in government assisted housing areas, but none in WA. While I find as a rule the vacancy and rentablity of the properties may not be as good as the same property in a non-government assisted area, the price/cash flow often makes up for it.

I think most of the time, if you use a little common sense, and have a look at…[Read more]

Sounds great, IF:

The town has a stable or growing popualtion.

Slum Lord

If you start by focusing on tax minimisation then you will be missing the point. Focus on investments that make money first, and minimise tax 2nd.

The fact is the worse the investment the more it minimizes your tax.

Buying newer properties will allow you to take advantage of on paper depreciation, but this should only bee seen as the cream on…[Read more]

The most important question. Is it positive cash flow?

Slum Lord

That article is a riot; the guy is just making stuff up. I wonder how may people actually believe this?

He speaks of the Steves Wrap deals: bet he has never seen one of stsves contracts.

He says Steve only does wraps: we all know this is not true.

He talks about buying property in Sydney worth 500k each!: How many of these do you think Steve…[Read more]

From someone who has a bit of both, I would suggest you are better to have about 65-75% cheap stuff and the rest more premium.

Right now I have alot more premium stuff, about 75%, and the truth is my capitol growth on the “back of nowhere” stuff has been equal to that of my property in premium locations.

Also Vacancy rates are much lower in…[Read more]

When you own a room in a hotel, or resort, what happens when the business goes under? or the managment is poor?

2nd question. What happens to your property value when the sales people have sold all the units and the promotion of these units stops.

I’m not a big fan of these type of deals. I know of some of the best resorts, in prime locations,…[Read more]