Forum Replies Created
peterp
Thats why I am concerned about investing in rural areas. I am also concerned about all these people new to property investing going out and buying rural properties that are cash flow positive. If you want income NOW fine, but property investing is about gaining access to growth assets.
My view is that its very difficult to time the market. The best time to buy is when you can afford it. I thought property prices were going to go down 3 years ago, yet there has still been some growth. If I had waited then, I would still be waiting now.
If you do buy now, just factor in a few interest rate increases and that the property may go down a little in value. But remember you only make a loss if you sell. You also need to hold the property for 5 years. Things dont happen over night.
Property management fees are the best for peace of mind. Sure sometimes they get paid for merely banking cheques and sending me the difference, but when there are problems thats when they earn their money and I have some peace of mind.
No. I am an accountant, but not a Tax Accountant. I still get an accountant to do my tax. But seek professional advice. Dont take my word for it.
Looks like you got nothing to worry about if the tenant has said he is keen to stay. Ask the agent why a lease has not been signed esp if its been 60 days or something since you signed the contract.
If its just been because the agent is slack, then proceed. If the agent has been telling you porky pies and you dont think its that easy to get another tenant, then dont settle. But surely (based on your posts – you surely did) you did your research before making an offer. Then just settle.
Callum
Would you buy again through them or do it yourself? Are you from Qld or another state? I dont like new townhouses and I reckon the depreciation allowances are built into the price of the property anyway. I also dont like buying in Qld when I am in Melb. They still get commission so its still in their vested interests to sell me a property. Everything they say they do for you, you can do yourself.But going to the meetings gives me the information I need. As for making gains in the last 3 yrs. You could have closed your eyes and picked a spot anywhere in Australia and made a capital gain in the last 3 years.
Michael R.
Do you have anything to do with Conrad properties?
Personally I would not touch an inner city apartment, no matter how much they say it can rent for or that demand exceeds supply. Makes no difference to me if its Aust or NZ.
I cant see how the lord of the rings effects real estate prices in NZ. Hey I love the film – Something about Mary – Hey lets move to Miami.
Sounds like a good agent to me. If I was selling I would not want the agent to tell the prospective buyers. I always offer a lower price if I know why they are selling eg. moving to another home, divorce, deceased estate etc. I also agree with Jenman on this one.
If you want to go to a free seminar on property investing – go to a free investors club evening session.
I agree with their philosophy about acquiring property and keeping for as long as possible.
I would not buy from them. (NEVER BUY FROM A SEMINAR) But use their strategies and DO IT yourself. I have been to a few of their sessions and motivated myself to do it myself.
But after reading a few books on the subject its a good way to reinforce what you have learnt.
You need large deposits firstly and banks dont like loaning money as much as they do on residential. The interest rate is higher on commercial loans. As the guy from the bank says to me you always need houses to live in. There is also the valuation aspect of a commercial property. The bank needs that valued (you pay, not in the case of residential) and they look at length of tenancy, type of tenant etc. to work out the valuation. But as you say there are some advantages.
peterp
Well summed up. I suppose you could say there are 3 different styles.
McKnight – rural/postive geared. High Yield.
Somers – middle ring surburbs near your house. Combination of yield and growth.
Wakelin/Fitzgerald – closer to city, mostly negative geared, high capital growth.My personal thoughts on the following
Mcknight – the positive income on rural properties not worth the effort/hassle in the long term. Too far from home, travel, historically low capital growth.
Somers – I favour this. Invest close to home for growth and yield. But properties probably are negative geared.
Wakelin/Fitzgerald – acquiring properties in innner city is too expensive, and having a young family, the high negative gearing is not for me.
Have you read any other books on property investment in addition to Steves. There are many good ones out there. My first ever books on the subject were Jan Somers. My advice to anyone after they buy their PPOR is to read her stuff. She has been investing alot longer than 3.5 years.
A comment from westan
<<<If anything come close to the overvalued prices it is those inner city units in Melbourne (that will really make Yack happy).>>>
I agree innner city prices are overvalued. I would not touch an off the plan apartment or anything off the plan. Unless I can see it, I dont know what I am buying. I just dont touch inner city apartments.
I am an advocate of Jan Somers. Buy close to home in median prices for the area. I live in a middle ring surburb of Melbourne and buy in the area I know. I dont buy in the inner city and if I had a little more money, then I might buy closer to the city like St Kilda, Albert Park, Elwood etc. NOT Inner City apartments.
I also dont like the idea of buying in rural areas. I dont believe the hassle (time, travel and stress) is worth the income and limited capital gains.
The rules have not changed. Your just basing your argument on the last five years. Its the dripple effect. Now that the prices have increased the yields have gone down now. We are also in our largest period of growth in our australian history.
So dont expect too much now. The rules have not changed.
My advice for what its worth. Keep what you have – your strategy in the long term will be better than buying shitty positive geared properties at $80k each with low capital growth prospects. Quality wins out in the end.
Where overseas are you working? I was working in San Francisco back in 1998 at the height of the tech boom when real estate prices were booming. I was paying heaps in rent for a shitty 2 bed apartment in the surburbs and had no prospect of buying a place.
I thought then that things like that could happen in Australia. We had many migrants coming to the country and the economy was pumping along.
Anyway, that experience of my time overseas gave me the incentive/knowledge to invest in property here. Learn what you can over there.
We are many years behind the States and Europe and having property today will make us the rich of tomorrow. Property prices here are not beyond the average person here compared to Europe etc. But its starting to go that way.
I went on a holiday for a week to Merimbula about 4 years ago. Yeah – I am from Melbourne. We stayed in a holiday flat – that was 2 beds, two baths. It was for sale for $80k. The following year in the same complex another one was for sale for $150k. I am too scared now to even look there.
So Had I had more guts, it would have been a good investment. Anyway – one day I will buy a holiday house and let the tax man pay it off.
I enjoyed the read. It may be time to re-jig my strategy a little. As they say – they aint building any more land. Well except for maybe the Nederlands.
I dont have any experience in this, but I understand that councils are not prepared to rezone residential as they do not want large rural areas subdivided, as it could one day become very unprofitable for farmers to have smaller pieces of land for farming as you need large peices of land to make farming efficient and profitable. You still need economies of scale.
Sure farmers would love to have their land re-zoned residential and subdivide it. If they could easily re-zone their land, their land holding would double, triple or grow 4 fold over night.
Anyway. Good luck
Yeah – your view is shared by many. But I still dont understand it.
As a kid the beaches here were a little dirty with the dredging. Thats stopped so the beaches are very clean now.
I drive along beach road to work, so I reckon I have one of the best scenic drives to work in the world. It certainly beats the drive I used to have to work in san francisco along the 101 freeway.
But things are turning. Aspendale used to have a caravan park accross the road from the station and on the beach. Thats gone and they are currently building $1m townhouses. You can still see some houses along beach road that did not even face the beach. Its almost as if they were embarrassed they lived accross the road from the beach.
