Forum Replies Created
Hi cathnniv,
You mean apart from this site? [smiling]
You want websites or actual seminars?
I like to surf on over to Somersoft too, which also has a strong property theme.
Cheers
Dan,
Thanks for sharing. Positive stories like yours are good to hear.
Do you have another project lined up?
Best regards
Not enough info
Are you planning to finance 80% of the purchase price? If you’re financing 80%, the weekly (interest only) borrowing costs would be about 145 per week before holding costs.
Over a year, that would be less than $800 cash flow – not nearly enough to cover holding costs of rates, repairs, management fees etc.
If you left a 20% deposit of 28,000 in a bank term deposit you’d get about 1,600 (before tax)
And I haven’t even considered transaction costs of buying.
On a cash flow basis, this looks cash flow negative
Can you afford to carry the losses until there is a capital gain?
Only you can decide.
Hi MissK
I find the most fun thing to is searching for a property – the world is your oyster! Where do you want to buy?
Play with figures – look for a property you’re interested in, then calculate the mortgage payments, find out how much the council and water rates are, rental price for the property, likely repairs costs, yield etc – best case and worst case scenarios!
It’s very interesting the varied answers you get – one lender might give you $150K, another $250K.
Go shopping and enjoy the process!
Hi MrSmith
Interesting you should ask, I’ve been thinking about negotiation strategies myself lately. The negotiation process is not transparent – hence why owners/REA’s can make money out of property by getting someone to pay more than the going rate if buyer doesn’t do due diligence/falls in love with property etc.
Without being able to see inside the REA’s head, it doesn’t seem from your description that anything untoward was happening here. I’m not a REA but it would be standard negotiating tactic to ask for the details of your offer first. Sometimes negotiating is like a game of chicken – the first one to reveal their true intentions may feel at a disadvantage! But that’s not necesarily the case – your offer was made in good faith, and for all you know, could have been the only one.
Investors who put in offers need to have nerves of steel to prevent them putting in full price offer, sometimes! REA’s wouldn’t be above using any subtle pyschological tricks – and can you blame them? You need to know the tricks and how to counteract them – I personally use barefaced cheek!
The REA is meant to put all offers to the owner – so it’s up to the owner to decide whether to gazzump. Also REA should act with integrity towards you as commission isn’t paid until settlement – only approx. one third of offers turn into a contract. You’re still in the game and she knows it.
I put in a low offer recently on an IP, which was rejected, and waited 2 months for vendor to come back to me saying he couldn’t find another cash buyer higher than my offer! It’s a sweet feeling! But I was beginning to think should I have offered more – good thing I didn’t, patience was a virtue in my case. I held my position even though my emotions were telling me to pay more ‘cos I liked the property!
The negotiating process doesn’t necessarily have to be quick, easy or concluded in one conversation! And as a potential buyer, you are probably the party who is most in the dark – you just have to make your best offer according to the market.
Of course it could all be over if the other offer goes thru – in which case you count this as valuable experience and move on the the next negotiation.
Hi Steve,
I’d really like to see strategies for building wealth in this environment of rising rates and falling prices.
Possible strategies
– Build equity by paying more off loans
– Let time increase the value of property
– Carry out realistic analysis of holdings
– Investigate what we can expect by looking at previous economic cyclesetc
Hi Jaawz0224,
Why do you think it’s not worth the asking price? Did you mean to write 25,000? That’s very cheap?
No matter what the asking price, you can get info on house prices a number of ways. Some websites have limited info on recent sales/auctions. So if there have been recent sales in that area, you might get the info for free.
If no sales have been recorded thru the free websites, then you can get info thru one of the paid sites at about $50. The report would give you all sales in that area for the last year.
Or for around $200 (but shop around) you can get your own impartial valuation done by a Valuer.
There is always the option of calling local real estate agents and asking. They may or may not be able to advise, especially if you would be willing to look at a comparable property on their books…
Good luck
That’s a question only you can answer…but you’d need to do extensive due diligence before making that decision.
If you’re asking, does everyone think that you’ll make money by buying now, that depends on so many things, including future events like when prices in that area will rise, and also your personal circumstances, and goals. What is your plan for this new property? You are taking a risk that the property prices will rise in a certain time frame. How long do you intend to hold it – 5 years, 10 years, forever etc etc.
If you owe $300K on a $350K property, you are already 85% geared on that property. You don’t say how much your PPOR is worth. Presumably the new IP would be 100% geared?
If I was considering this idea, I would do worst case scenario planning – i.e. calculate how long you could pay the loans of both the current and future IP’s if they were both vacant for extended periods. If you were comfortable with that idea, then you could look at a normal (not best case) scenario – vacancy of 4 weeks a year, possible unexpected repairs etc.
What other prospects does this potential IP have – is it near transport, shops, schools, near a major employer or near a hospital? Are there any planned infrastructure developments nearby?
Any downside – does the IP need renovation, is it near a major road (traffic noise), does it compete with other apartments in terms of facilities – residents gym, pool, security?
All this and more you’d need to consider, as well as the likelihood that we are in an interest rate rise environment.
However, if your numbers and research stack up, and you can afford to hold even thru a worst case scenario, then the choice is yours.
Do most houses in Mount Isa have air conditioning?
Would you find it difficult to find a tenant for a house with no air con?I know NOTHING about The Gap specifically, but I bought a property in neighboring suburb Keperra on the basis that I expect the northern suburbs of Brisbane to experience positiive capital growth for the next 5 years. So far, in the 3 months since I bought my property, that’s been proved correct. I know you can’t really predict anything on three months worth of data, but I’m cautiously hopeful, or I wouldn’t have bought there in the first place.
Hi,
A quick search of the internet showed me a lot of links to free lease agreement templates. Regarding bonds, you contact the relevent Rental Bond authority in your state, their internet address may also have pertinent information. But most importantly, learn the rules and regulations – or pay a professional to do so for you. It would be a false economy to save 5% in letting fees only to find you missed an important clause that cost you thousands….good luck!
I think there’s too little info for anyone to be able to give an informed opinion…and only you/your father can make the choice…but for starters have you done a comparison between rent forgone versus mortgage interest saved?
Hi Monopoly,
Yes, I agree, if you’re going to sell, better to do it at a time of growth. When I first started looking for an investment property, I suffered from a bad case of the nerves, just like so many other people have/are going thru – e.g. what if I can’t rent it, what if I lose my job, what if there’s a tidal wave that washes my house away!!!
My other half said stop dithering and just do it if the numbers add up! So I did, heart in mouth!Well, 18 months after buying first IP, I’m buying my second, planning my third. All with careful planning, worst case scenarios worked out, insurances in place, etc.
I just want to share with new/potential investors the fact that I felt some nerves but my head said numbers add up and my worst fears haven’t materialised (touch wood).
It has helped me to remember the bad old days in 1994, because 10 years since, property prices demonstrably tripled. I know past performance isn’t a guarantee of future performance, but it’s certainly a good yardstick.
Cheers
Swampy30
Hi Mgr,
What are you looking for? Someone to do the legwork of finding a property, or someone to actually buy/sell it on your behalf?
Regards
Swampy 30
Hi Hobnob,
Well I certainly wouldn’t call myself a mentor at all, but here’s my suggestions for what they’re worth.
You’d need to check again with one of the excellent brokers who contribute regularly to this forum, but my belief is you may not qualify for a “normal” loan thru traditional bank, therefore you’d need to get creative.
Would you be a good candidate for a wrap (as the wrapee)?
Also another option could be a lease option (correct term?) where you rent but have the option to buy at a predetermined price?
Or you could buy a property jointly with someone else you trust, family member, whatever, they could provide the deposit and you could provide the servicing, or however you want to work it.Just some ideas…
Best regards
Hi Mortgage Advisor,
Current lender is Macquarie. I got some line about them not making any profit on the loan because current interest rate is too competitive at 6.5% variable..Reason I had to go to Macqaurie in the first place is that I’m an IT contractor, therefore not permanently employed. I’ve been contracting for 2 years now.
Thanks
Swampy 30
Dear dhen,
I do empathise, I’ve been there myself. We bought a house near Byron Bay a year ago, and it sat empty for 5 months. We dropped the rent until we started getting inquiries, but no actual takers. Then we eventually found a tenant through a friend of our local friend – Property Manager had no success. We also took a risk on young tenants with no rental history, but they have paid rent and looked after the property faithfully.
So we got tenants by taking a risk.Cheers
Thank you so much for your reply!
I owe hubby a few cups of coffee now, cos I was wrong! I’m pleased with the answer though! Got to be worth a few coffees.
So sorry – I worded the question badly. I meant to ask, if we used the redraw facility to finance repairs, would that redraw still be tax deductible like the rest of the loan currently is?
quote:
Swampy,did u give wespac all the docs they need on the spot? how come so fast?
***********************
Well, I had all details e.g. employment contact numbers in my head anyway – and I gave them the sob story that I needed the card for an overseas vist in three days time – and I said I’d transfer all my banking to them (which I subesquently did). But still, impressive service. The bank manager at Westpac cared, the one at Commonwealth didn’t, pure and simple.
