Forum Replies Created
Benny
The Perth market has been moving over the last 2 years, there has already been substantial growth, in particular development sites.What may be worth looking at are areas that are currently earmarked for rezoning ie Girrawheen, Koondoola, Beechboro, there is lots of competition for these as once zoning comes through then you can add value. Of course do your homework, contact councils.
Also one area which has gone under the radar is Mirrabooka, close to the city and still as cheap as chips, while surrounding areas are much higher.
WI:)
Engelo, Yes, I am sure many others are feeling the pain of dealing with IRS etc. never mind, worth it at the end:)
Hi Nigel
If you believe you have to do bigger projects then you are not actually looking. I have 3 projects on the go and would not touch them if there was not a minimum of 25% profit. Of course you are competing with other investors this will always be the case and builders have larger margins. I know several investors doing small projects in Australia and making good solid profits, so if you believe you can not do this then it will not happen because you will not make it happen and you will not be looking at the right areas.Larger projects are not for me as I want to control the project and not be dependent on others getting it right for me. I manage my own projects from finance, builder, structures but to give this responsibility to someone else is too much risk not to mention that the profits are then shared and not necessarily as attractive.
Porsha
Some lower entry level areas you may want to consider are: Girrawheen, Koondoola and Beechboro, these areas have all had significant growth over the last 2 years, however due to proximity to city and rezoning on the agenda they are hotly contested, I think you could source something around $425-450K, renting for $400 pw. Where can you buy this cheap/close to the city. Girrawheen and Koondoola ex-State Housing, however this is changing rapidly with Sattlerly refurbishing houses for Government which are on sold to FHB.
Another one that I would look at is Mirrabooka, once again proximity to city, and excellent infrastructure, currently as cheap as chips, not for long.
Cheers
WI
Many areas are not stacking up in Perth at the moment because development sites have been so hot pushing prices north and the end product has not moved as fast. I am currently developing in Perth metro, 3 unit site and calving up a corner block to build 2 houses. However, I purchased over 12 months ago but can not now buy in these areas for development as they do not stack up.
As far as Midland goes there are many big players/developers building apartments, I do have concerns of oversupply, also with apartments it is harder to source finance and I see this as high risk unless you are experienced with plenty of cash. Also for anyone investing in Midland make sure you get the soil tested, many pockets have clay which could cost as much as $100K on top of your build.
WI:)
Nigel
The time to buy development sites was 2 years ago, this is what I have been doing in Perth, not shaky at all, its a numbers game as long as it stacks up then I buy. The market in general has been rising and very strong in Perth, however I believe it is now starting to slow down. Sydney seems to still have some steam.
I am also developing in Melb 4 unit site, it is becoming increasingly difficult to source sites as builders/investors are jumping in. I stick to small 3/4 unit developments get in and out.
As I mentioned before the power of leverage and the strong Australian property market makes investing home much more attractive than US and the numbers do appear to have dropped, less interest in US for this reason and also the fact that yields in general in US are no longer as attractive, which makes it a much riskier proposition.
It is also very difficult dealing with the systems in US as they are so archaic its unbelievable.
Seriously I have never ever dealt with anything like this. One example IRS, we sent in our tax last year, they processed my partners tax refunding the with holding tax, however did not process my documents, we have been waiting for 6 months now, many phone calls in the early hours of the morning, and finally my accountant phoned as now we were receiving fines for not processing our tax returns even though we had been discussing our documents and confirmation of this on the phone. They now have lost everything, now we are processing tax returns again. It appears that the government departments and banks seem to have no systems in place to make people/employees accountable its like I am dealing with some Third World Country, very strange. Anyway, enough of the rant, this however does make it more difficult not to mention the money you have to spend to resolve some of these issues.
Hi hifo
Just keep researching and I would also look at the somersoft forum and where people are investing. In this part of the cycle I would be staying away from any mining towns regardless of the cash flow.
Sydney and Perth market started rising 2 years ago so I would probably be looking at markets which are started to rise, many are finding good yields and growth in the SE corridor of QLD.
As far as buyers agents are concerned I would be very wary on who you use, make sure you do homework and in a hot market they have many clients and you will just be another chasing the same product. If you have the skills to research and the option to fly over it will be cheaper and perhaps a better result. I invest around Australia and used BA but I no longer do this as I have found most are average and the fees are costly.
All the best
WI:)
Hi All
I started investing in Atlanta over 2 years ago, but I stopped buying when I could no longer achieve 20% gross yields, at that time I realised as a landlord it was not going to be fun, lots of slippage for example higher maintenance tenants, property management fees higher and other associated risks.
I believe that various property markets in Australia such as Sydney and Perth started rising 2 years ago after 7-10 years of no growth so investors have started jumping into these markets, with historically low interest rates and the power of leverage it is a no brainer.
As far as investing in US for me personally been great, my 8 properties (investment of $500,000 Au) have pretty much doubled and still got income sitting in my US bank accounts, my plan is to pull the pin over the next 12 months and bring back $1M and continue reinvesting in Australia.
I believe the ship has sailed in US and unless you got in early I would not bother as the positive cash flow will turn into negative as the current yields are way to low IMO. Its time to play in your own backyard as there are great opportunities to make serious $ in Australia, Brisbane market is now starting to rise.
WI:)
HI jsnarr100
So what neighborhoods are completely investor owned?
It would be great to share this information.
Cheers, MTR
Hi Nigel
I agree his will go a long way, but without a plan/goal, courage and action you will achieve very little.
Kong
thanks for the link.
Cheers WI
Hi SG
My properties averaged around $12-15K this would include painting, HVAC units and carpets (all the itmns you mentioned).
Cheers WI
The multifamily deals you mentioned are cheap for a reason, these types of properties need to be run as a business, also if it is in the inner city areaas then most likely in areas that should be avoided at all costs. The cashflow will be negative and you wont be able to give it away.
WI
Hi mgdavis
I think you should search this buyers agent/company you posted, as you may want to reconsider purchasing from this group. You will find you are paying too much for properties and do not touch their finance.
WI
No surprises here, I imagine there are many o/seas investors who will go through many property managers only to find that they are chasing their tail.
We say cheque, you say check, similar to property management, its like chalk and cheese.
WI
Hi Jay
Your build is always lower than what I have researched, so why $55 per sqm, how did you get this figure??? and how much is the lot, Why is it that I always come up with around $70-90 per sq ft, what about inflation.
WI
Hi Speedy
$50 per sq ft is too high, no more than $30 I would also say.
Don't know Temple.
I think try to buy no older than 10 years and anything over 2000 sq ft would be great, I like my properties to return at least $1000 pm.
I don't know if it is too late, depends on your criteria. For me it is too late as I will only buy properties with 20% gross which is just not realistic at the moment.
Cheers WI
You did very well Jay.
Stir the pot a bit.
I am very curious as to what class Steve McK is buying for the management fund he has set up…. does anyone know?
If he is buying C and D this would certainly be a worry as you mentioned. Steve has I believe a partner in US who has I think 600 of these something like that….??
WI
Hi Cheeves
With regards to Atlanta – 3 turnovers in a year, that would absolutely be a killer.
I am curious, how would you describe a 2 class B property?
Those 6-8% yields I believe are just not attractive for foreign investors, coz we can not LEVERAGE in Australia and our interest rates are now very attractive, if you look hard enough there are properties in Australia that provide 7.5% yields and much lower risk.
I personally think the boat has sailed and the stock that I am seeing now is way too expensive or inferior.
WI
Why not talk about buying up trailer parks we don't have these in Australia, seems like there are a couple of gurus that have made a zillion buying these, upgrading and creating huge cashflow.
How much of a risk for the foreign investor, what type of clients does this attract. I am not seeing a pretty picture, but then again I am perhaps watching too much TV, Jerry Springer comes to mind.
Anyone had any experience in this area?
I understand an investor who joined Steve MC mentoring program moved over to US (Florida) a couple of years ago now and started purchasing these and has done very well, but I just can't see myself doing this.
WI
This is not good, I have a girlfriend who has purchased a development site in Karatha to build 10 units, joint venture.
I thought this was very high risk at this time of the cycle. Looks like I could be right.
WI
