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We bought them as three Siblings trying to give each other a leg up. No company etc, just in three names.
The power of three is greater than the power of one
(at least when it comes to buying power)
I had the same thing happen to me last year.
My accountant did some research and said I definitely COULDN’T claim ANY of the costs. As Mel just said, the costs are capital in nature not expense related
I could be worse though. I’m grateful that the soliciters Body Corporate searches showed up the problem. Small cost compared to being stuck with a very expensive lemon.
I bought out there last October
4 flats for $110k= rent 4 x $80pw
duplex for $120- rent 2 x $120pw
house for $80- rent $160pw
All make the 10sec rule
The area has sound employement levels, good education facilities (TAFE), major banks (the NAB even has a business branch there) KFC, McDonalds etc. When I visited, there was not one empty shop in the main street. My bank lent me 100% of the value to buy them (using equity of course), and I’ve been told that they are still lending to fairly high percentages compared to other regional centres, so that tells me they feel comfortable with the towns future.
Rents are pretty high due to a legacy of the USA gas companies renting out all available property at high rates “way back when”
On average, rental vacancies are low, but are a bit high at the moment. Not sure why.
Check out this site http://www.watkinsandco.com.au/ They are one of the bigger agents in town. They don’t charge a placement fee for new tenants either!
Check out the houses under $100k page
The house for $65k (ref nor47) is on a large block close to town on a main street out of town. It has been listed for ages. It is stucturally sound and you may be able to get the price down to make the 10sec rule.
A word of warning…the rates are killers. On my 4 flats they’re $3060 pa,and average around $2400pa for houses!! On the cheaper stuff, your lucky to get a +ve cash flow even if you use the 10sec rule
Most of the “good stuff” has already gone. I was lucky to be told about it last September. The locals are now onto whats happening with “out of towners”
I live in inner brisbane, and on my way to work I pass 3 large unit blocks being constructed, and many just completed, with lots of for rent signs hanging off of them. There are also heaps of unit blocks nearing completion in New Farm which is comparable to Woolloongabba in distance to the City but without the “latte set”, atmosphere and facilities of New Farm. I think that in the next couple of months prices will stall and perhaps even shrink. Rents will probably also drop. I’ve noticed in my own suburb (Morningside) that there are a lot more “for rent” signs going up, and staying there for longer.
Is the unit on the Corner of Ipswich Road and Stanley St? If so, that’s one awfully big project with lots of units to unload. I can’t comment on the set up of builders as I’ve only noticed the sign in passing.
If I was going to buy, I would probably look at New Farm instead. Its close to The Valley and has better facilities.
My gut feeling is not to buy “new” right now, if at all. If depreciation is not an issue, it might be a better option to wait a bit and to buy “second hand”
Good luck sifting through everybodies info.
I asked for a copy of property manager pro on Monday (via this topic)
It hasn’t arrived, and I was wondering if you are “snowed” under, or should people stop asking for a copy?
(This post is done more in the line of a “Community Service” than as a “where’s mine” post)
I would love a copy of Property manager pro, could you please e-mail it to me at baden(@) jkinghorn.com
Have a look at Roma in Central Qld (west of Brisbane)
I just bought a house for $80k rented at $160pw ,a duplex for $120k rented for $240 pw, and 4 small flats for $110k rented for $360pw (the bargain of the month in my mind) 
Rents in the area are higher than you would expect for a country town. Some time in the past the American mining companies leased all available properties for their staff & paid top dollar. This trend has continued. Rental vacancies are low. Ray White only has about 10 or so places on their books (at last visit).
When I visited, the town didn’t have a single empty shop anywhere. The population is stable and the local council is actively trying to increase tourism (more jobs). If you’re going to visit on a weekend, book your accommodation as the motels are almost always full.
I heard that over 50 houses have sold there in the past month(looking at the local agents web sites I have seen the turnover, so I’m inclined to believe it). There are still some good buys there, but I think the next month or so will see the end of them. There’s a couple of nice ones for $65k rented for $110pw which you might get for $60k if your lucky. I would have put in an offer but I ran out of equity mate.
I’m going out there on the weekend of the 6th December, so if anyone wants me to look over anything I’ll give it a go.
$25 pw sounds more than possible.
I just bought an IP in Central QLD for $80k (rent $160 pw).
The rates are $1445 PA which is $27.78 per week
The rates in country towns (in QLD at least) seem to be proportionately higher than in the City (based on land valuation).
I haven’t seen a rates notice yet (settlement is on 25th Nov) so I don’t know how they calculate them.
I’ll check with the guy who put me onto it originally and let you know how he feels about it. Shouldn’t be a problem though.
For a quick formula on 6.75% over 30yrs see earlier posting “Helpful repayment formula”
Another VERY important source of information is THIS forum.
I have just come back from a buying trip inspired by one of the contributers to this column.
He let it be known that he knew of a town that had heaps of potential and was willing to share his knowledge. He showed me video of possible buys, told me about the best/worst areas of town and put me onto the best local agents, building inspectors etc. He went through all the relevant Stats as well. The clincher was when we told me that the Banks were lending up to 95% of valuation.
I had a trip out there and purchased 3 properties
1) a $110,000 block of 4 flats returning $340 pw
2) a $125,000 duplex returning $240 pw
3) a $80,00 house returning $160 pw
All up I’m $155pw positive cash flow after outgoings even tho I’ve borrowed 104% of the value to cover purchase costs. (equity mate!)
There are still more bargains out there so I’ll be going back soon
The guy on the forum mentioned these buys sevral times, but I’m the only one who took him up on his offer. When I asked him about this he said he couldn’t understand it.[?]
IF SOMEONE ON THIS FORUM OFFERS TO SHARE THEIR KNOWLEDGE, LOOK INTO IT…IT MAY JUST BE THE GOLDEN OPPORTUNITY YOU’VE BEEN LOOKING FOR.
Having said that, ALWAYS make sure that you do your own “due diligence” research.
Please send me a copy as well.. Sounds interesting
you say that the insurance would have cost you >50k so 50000/6 years/10 properties = $833
The average I pay is 220/yr and it tax deductable.
Do you insure yourself or your car or ppor just because nothing has happened doesnt mean nothing will.
OOPS!  Your Right
Somehow my calculator told me that $200 x 10 x 6 yrs was $50K. Sorry .[:0)] I was guessing at the current price of insurance as I haven’t priced it for 6 years and was going on my memory.
As to the insurance.. yes I have insurance on everything else, including the IPs.
I just don’t insure again deliberate melicious damage by the tennant. I have complete faith in my PM and her checking of new tennants. I only insure things where I feel that there is a risk involved, and I feel that the risk here is minimal. I know it may happen (melicious damage) but I’m prepared to take what I preceive to be a very low risk.
I guess it boils down to your experiences,and how much faith you have in your agent and how lucky you feel.
Using a PM depends on how much time you have to look after your tennants yourself.
I use a PM look after my 10 IPs even though I live within a five minute drive of all of them.
Let the PM have the hassle of dealing with leaking taps, finding tennants, lodging bonds, chasing rent etc. This frees up more time to do the things you enjoy. I only ever get a call from her now if something major happens (four months ago a hot water system went. After a chat with me she had a new one installed next day)
With regard to the property insurance, if your PM is a good one you shouldn’t need it. Find out if th PM can offer you this type of insurance. Some insurance agencies will only let PMs with a good track record offer their insurance to landlords.If they have too many duds, the agency may refuse to let them offer it. In the six years that I’ve been using a PM I’ve only had one tennant skip without being up to date on the rent, and most of this was covered by the bond. The PM felt so bad about it that she didn’t charge a placement fee for the next tennant, so I actually can out slightly ahead 
If I’d paid insurance on all of the IPs I’d have been up for over $50k by now!! Think of how many deposits that covers on new IPs! Guess I’ve been lucky …my next tennant could be a tennant from hell straight out if Steve’s book.
I my opinion the (tax deductable) percentage you pay the PM is worth every penny. As you get more IPs you can use your position to bargain with the agent to get a better rate.
My PM is a single agency and doesn’t have many properties listed for sale, but has a very large rental “stable”. Every time I pop in for a chat, her “available for rent” list is very small. Most of the properties are tennanted with long term tennants.
Another good thing about using a PM is that they may let you know as soon as they get a listing and you may get first shot at it.
If you are in Brisbane on the inner east side let me know your email and I’ll send you the details of what I consider to be a PM worth her weight in gold.
I’m in QLD if that that helps
I’m going to offer the buyer (a builder whose keen) permission to get development approval to put units on the back of the block before settlement. This will save him six or so months and he won’t have to tie up a lot of his capital. I might try and use this as leverage to get hold of a big chunk of the deposit from him.
I”m interested (but probably too late)
Pls send info to baden(@)jkinghorn.com
Anyone interested in a deal as follows:
6 x 1 bedroom Flats. Solid cavity brick & Wooden internal construction. Rented at present for $75.00 unfurnished $85.00 furnished per week. Could be redeveloped into motel depending on local council approval
This ones a little bigger than i want at this stage. Contact me and i will advise location.
I own two blocks of 3 flats (under one title- as opposed to units which are held under separate titles). The bank treated both of these as residental properties for purposes of a loan. The tax office has ruled that an individual owning residential property is not considered carrying on a business (and as such the banks treat it in the same way). They used to hit you with an extra % or so above PPOR for residential investment loans, but have now in most cases decided to treat them the same.
Both sets of flats return positive cash flows so if the price is right I would think that a block of 7 flats would probably do well. Your rates etc would be proportionately lower compared to the larger number of separate incomes. Owning units means multiple rate notices & Body Corporate fees. This make it harder to get a positive cash flow but not impossible. Mine are just breaking even now and I’ve held them for 4 years. Increased rents in that time have really helped to bridge the gap.
I’ve only ever held average paying jobs and still managed to own 10 rentals which now gross $1500 per week. I started with a $10,000 deposit seven years ago. I think its been more through luck than anything that I’ve managed to apply most of Steve’s principles when buying property. Looking at his book has really made me realise the potential I have in my properties,and now I’m going to have a go at buying more.
This is my first message to this forum, and I’m telling you about my properties just to help any body out there who it thinking about giving it a go realise that its possible to achieve property wealth without any special skills.
I use one agent to look after my properties, and I’m their largest owner. As such I get priority treatment. In seven years I’ve only had one flat empty for a week and the agents deal with any/every issue that may arise. If you can afford the 6-8% and still have a fulltime job, I’d recommend using an agent.
I’ve been reading this forum for about a week or so and am already hooked.
Hope I’ve been a help