[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 10, 2011 - 8:42 am

Still waiting to hear back.
 
Will follow up again when I can. Have hurt my back though and am resting up for a few days. Sitting is super painful.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 9, 2011 - 11:16 am

Golly, could any more have happened in a single day? Our market falls nearly 6%, then a massive rally to end up 1%. Who can explain that?

It seems to me that in times like this, the ones who are most affected are those without a strategy and therefore have no benchmark against which to decide how they should act.

Thanks for the robust discussion. Keep it coming.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 10:16 pm

Good morning team!

Seems like there is a diverse range of opinions here, and that makes for good discussion.

In regards to my thoughts on interest rates, it seems to be a difficult call. I would err on the side that our economy is under rather than over performing at present. A weak property market, manufacturing confidence is low, as is consumer confidence, building is sluggish… I think we are probably in a clayton's recession – a recession we're having when we aren't having a recession.

I recognise the comments about CPI, but I don't think the increases in CPI are necessary controllable… food pressures from a flood, petrol, etc. Discretionary spend is soft in my opinion.

So, all in all, I lean to the view that rates will be on hold, and, if they do end up moving, I believe there is a higher probability that they will fall rather than increase.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 11:46 am

Hi,

In respect to the AUD, take a look at the link below in the section under 'How Bond Rates Could Rise'.

When you look at the alternatives, AAA rated Aussie Bonds at 4.9% looks like a very good option compared to others. I think that is a reason why our AUD is quite strong.

http://www.nytimes.com/interactive/2011/07/28/us/charting-the-american-debt-crisis.html?hp#panel/how-bond-rates-could-rise

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 11:13 am

Stephen,

Perhaps if you asked a few specific questions you might get some more answers. The more general the question, the harder it is to answer.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 8:06 am

Just an update – have put in a call to HSBC and am waiting to hear back from their international banking division.

The person I spoke to (help line) did say they still have an US account option, and that there is a $200 set up fee.

I'll report back when I know more.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 8:04 am

Hi,

Derek has put forward some really sensible tips, and I echo them.

Student accom is often shunned because it is seen as more cumbersome in management and because the property depreciates with the higher density use.

The return looks okay on the numbers you have presented. How much are you planning on borrowing. It's hard to be exact with the numbers you gave. $5,500 is close to $100 per week, so that's a lot better than the negative gearing returns many investors get.

I would want to compare the return with what you could get leaving your money in the bank though. That is, how much more rent will you get for taking the risk vs. interest you get by leaving the money in the bank (given it seems there is no/low growth prospects).

The usual reason that there is low growth on student accom is that it is typically sold to investors, and therefore there is not the 'emotion value' home buyers are prepared to pay. There is also more and more student accom coming on the market, and so the new supply tends to undercut the existing second hand market (that is, discounting for new properties undercuts the value of existing properties).

I would encourage you to do a fair bit of due diliegnce on the assumptions. In particualr:

a) In regards to the tenants:

i) Can you get three people who all want to live together
ii) Check the advertised rent has been achieved
iii) Check vacancy periods
iv) Check how tenants are attracted to the property
v) Length of the lease (are they all rolling 1 year leases)

b) In regards to the management:

i) Who does it?
ii) How is the rent collected?
iii) What about during school holidays?
iv) Are any furnishings needed?
v) What are the costs (management and other)
vi) Documentation: lease, condition report, bond, etc. Who does it?

c) In regards to expenses

i) Body corporate?
ii) Land tax?
iii) Repairs and maintenance allowance
iv) Other

d) Resale
i) Process
ii) Are you free to use your own agent
iii) Likely marketing channels

e) Other
i) Other student accom in the same area
ii) Other student accom in the same building
iii) Risk free return comparison

Finally, I think you are just the person who would get a lot from the seminar series I'm about to run. Check out the link below and book in if you can make it.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 2, 2011 - 7:51 am

Thanks for the post, and well done on being diligent in managing the expenses.

It seems like this is an extra way to claw some money for essentially doing their job, but it is not uncommon.

The first thing I would do is get an accurate understanding of what the cost relates to… i.e. what postage and what supervision.

You can look to renegotiate if you can find another agent in the area who doesn't charge this fee and mention that you are thinking about transferring over your business unless the charge is removed.

I also agree that the fee should be mentioned in the rental management agreement. If not, it is unreasonable to charge it.

Sincerely,

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 1, 2011 - 6:50 am

Okay okay… I've seen the post and will put it on the wish list!

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 1, 2011 - 4:13 am

I have to agree that land in the US has a different value than land in Australia. A parcel may look cheap by our standards, but if there is no scarcity then it's unlikely to appreciate much in value.

In regards to Fort Myers, Leehigh etc… values have dropped massively after speculation drove them artificially high.

Remember too that vacant land does not generate an income, and the LVRs are usually lower (if you can borrow at all).

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 1, 2011 - 4:10 am

The ATO goes through phases… sometimes they are lenient, other times they come across heavy handed.

The old rule used to be that when there was an argument that something should / should not be included in your tax return then you were safe from penalties so long as you had a reasonably arguable position. I can't see this applying to shoddy record keeping though.

Personally, I'd rather know my records are as they should be than hoping I don't get audited, and, if I do, relying on the mercy of the happy folks at the ATO.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

August 1, 2011 - 4:05 am

G'day Swampy,

2% seems reasonable to me.

In regards to some quick pointers:

a) Get an undertstanding of the 'extra costs' not in the 2%. For instance: marketing fees, advertising costs, etc
b) Does the quoted commission include GST
c) How long is the listing period. 60 days should be sufficient. Be careful not to lock yourself in for long periods.
d) What is the actual marketing campaign? Who are you trying to attract? Auction / private treaty?
e) Feedback mechanisms – agent to you, and you to agent
f) Are you planning on staging the property? (maybe check out finishing touch in the online shop)
g) Have you set the sale terms: deposit, closing date, etc.

Anyway, there's some food for thought in the list above. Hope it helps.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 11:30 am

Hey Rick,

James Simango (US Tax Central in Brisbane) is a great help. He's a CPA in the US and also in Australia.

I'll try to do an interview with him on the topic of tax deductions and add in to the US Focus Group resources in the next couple of weeks.

You might also want to check out a book called 'tax wise'. I got it off Amazon. Here's a link:

http://www.amazon.com/Tax-Wise-Business-Ownership-Toby-Mathis/dp/0979786002

Cheers,

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 11:26 am

Hey Paul,

Welcome to the forum!

I don't know of anyone on the Peninsula as such who can guide you. Normally, you'll need to approach a number of advisers and piece the puzzle together for yourself.

For example:

a) An accountant for structuring advice
b) Real estate agents for local knowledge
c) Mortgage brokers for finance help
d) Investors for the practical tips and tools

In regards to getting started, I wrote a post before that you might like to read. Here's the link:
https://www.propertyinvesting.com/forums/property-investing/help-needed/4337554?#comment-242888

Also, if you're free on the 10th September, you might like to come along to the new event I'm running. Check it out at the link in the signature tag below.

Cheers,

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 8:59 am

Hey Stephen,

You must be a nice block with a name like that .

Many people comment that starting out is the hardest part – not only is knowledge an issue, but so too is confidence.

I could go on an on about this topic (in fact… I will be at the upcoming seminars I have just announced), but for a quick answer that I hope points you in the right direction:

1. Many investors buy a property and then make a profit. That is, they buy then strategize. This is a flawed approach.

2. Instead, the first step is to work out your wealth creation goal. That is, what you are trying to achieve from your investing.

3. Once you know your goal, you can then look for a model or investing approach that will get you there. For instance, you may need to buy multiple properties, and 'trade them' as you build your capital. Or else you may have a long term approach and can buy (say) a property every couple of years and achieve your goal if you achieve your growth targets.

4. Once you know what profit you want, and when you want it, you can select the most appropriate investment strategy.

5. Armed with knowledge about the goal you have, the profit outcome you want, and the best strategy to achieve it, your next step is to identify an area you want to invest in, and then ultimately the 'right' property for your needs.

6. Of course, once you have found the property, it's up to you to do your due diligence and then negotiate a price you're happy with.

7. Then, once you've bought it, you should look to apply skill to get above-average growth and income returns.

Phew! That's quite a bit to take in, but it's a quick step-by-step approach which I strongly believe will lead to the most successful investing outcome possible.

If you'd like to know more on this topic, then I suggest you take a look at the seminar series I'll be running soon. The link is provided in the signature tag below.

Cheers,

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 8:50 am

This is an interesting post, but outside of my expertise to answer.

I have been approached a couple of times over the years by people with either disabled children, or else from organisations representing them, inquiring about the validity of special purpose housing that can be converted back to standard residential property after a period of time. This could be an interesting niche, particularly if you could get a win-win lease.

Alternatively, as a developer, you may be able to get attractive pre-sales for a unique product.

I wasn't aware there were special planning regulations, but this makes sense.

I suggest that if you want to take it further then you should contact a town planner. They should either know, or else know how to research, an answer.

If you do find something out, please come back and share it with the community.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 8:45 am

Hey Tugger,

Have you tried doing a good old google search? There are probably a number of templates out there you could access.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 31, 2011 - 8:44 am

Hi,

I understand that HSBC has changed their policy due to the US Patriot Act, or something. In short, they've made it harder to open a US bank account from Australia. I will attempt to verify this with them tomorrow as I have a contact who gave helpful advice a few months back. I'll write an update when I get confirmation.

I'm not sure about Citibank.

In regards to Wachovia… they are currently being gradually rebranded Wells Fargo after a take out.

Cheers,

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 28, 2011 - 11:26 am

Got a tax lien redemption today, in fact. $700ish in interest over four redemptions (in one cheque).

I can't fault it thus far, but I do have about 30 liens I have to start foreclosure on. It will be interesting to see what happens.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently

[Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763]

July 28, 2011 - 11:16 am

I've had a go at buying a few in SW Florida over the past few years.

Things seem a heck of a lot better now than my first visit in Nov 08. Prices are firmer and inventory is moving in days (sometimes hours) rather than weeks.

It will be interesting to see if the momentum can be sustained.

– Steve

Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.com

Success comes from doing things differently