For any who may be interested:
A company called Australian Property Masters (www.propertymasters.com.au) is running a seminar this Monday the 8th December. The details are:
Time: 6pm to 7:30pm
Venue: The Canberra Club, 45 West Row, Canberra CityBefore a few forumites jump on my case about property investment companies please note:
* I am NOT in any way connected with Australian Property Masters nor have I purchased any properties thru them.
* I am NOT in any way suggesting anyone should attend this seminar or buy properties from Australian Property Masters.I am however going to attend myself just to hear their spiel. I would be interested in anyone else’s opinion of the seminar after Monday night if they attend.
I am not totally against the idea of using a company to source properties for me, which is not to say I ever will act on that idea. Tho’ the debate about using a company like this to source properties has been had before I welcome another discussion on the topic as it still bugs me. I will start with this comment:
A lot of people seem to hate the idea like it’s a matter of pride that they source their own deals. I can’t help but wonder if in some cases it is financially better to use a company to do the groundwork for you, even if you pay a slightly elevated price. This is on the proviso that you still do your own sums on the property itself and an investigation of the company you are planning to source properties thru. Sourcing a good property by myself takes a lot of time and for me to be confident to buy a place I need to go to town/property myself and this can take several days – often week days which I don’t get paid for if I’m not at work. Yeah sure I will still do that for the property that a company sources for me but probably only for the first few. If everything continues to check out then I would expect you could stop some of the town/property visits after a while. Not the independent valuations or building inspections though, I don’t think I would stop that.
Does anyone on this forum buy thru a property investment company and is brave enough to admit it? [
]Regards,
KaranHi Karan,
I bought 1 through them. They are nice people. They select good properties from a number of well known developers and sell for them. They receive commissions from the developers just like other real estate agents. You pay the same as if you approach the developers yourself. It’s convenient when you want to buy properties interstates.
Regards
Huey
Hi Heuy,
Thanks for your comments.
May I ask why you have only bought 1 thru them and was it a cashflow +ve property?
Regards,
Karan.Hi Karan,
Their stocks are in top price ranges because they select good locations & good developers. I wanted to get 2 but only could afford one. I bought it 2 years ago. It’s neutral geared but good capital gains. I’m not sure if we can achieve the same if we buy in today market.
Cheers
Huey
Thanks for the heads up Namaste – I managed to get there.
I learnt a few things, so was worthwhile. It doesn’t sound like they go for +ve geared properties – but if consultations are free, can’t hurt to talk to them!
Got a chance to talk to some bank managers as well.. Was asking about companies borrowing – sounds like it might be difficult finding finance doing it that way! (I am keen on going in on some property with some friends, but wouldn’t touch a partnership!!)
Karan ;o)
Nothing wrong with attending a free seminar! You’ll probably get the same info as if you bought a 200 page RE book. I checked out their website and it seems pretty old-fashioned (I like that) in terms of the material it presents on there- reminds me of Ann Somers stuff.
The problematic seminars are the ones that charge, I think. I think they target a lot of lost lambs. Then the lost lambs go feral when the guru goes broke, whereas before the guru went broke, he was- for them- the god attending to the sheep.
Check out the URL below- it’s about RE investing seminars:
http://www.smh.com.au/articles/2003/12/08/1070732147837.html
kay henry
Hi all.
As you said Kay, no harm in attending when there free. Though the info presented was only the basics and they do seem to be focused on -ve geared properties and capital growth, there were a few things I learnt and they had a few “interesting” points of view. Not saying I agree with them but others might find them interesting.
They say:
* Only buy brand new homes/townhouses/etc. The main reasons for this was to take advantage of the new depreciation laws which allows you to depreciate the cost of construction at 2.5% over 40 years. Their other reason was less maintenance costs.
* Only buy in major cities. Their reason for this is in regional centres single issues (eg industries/employment etc) may have an adverse affect on the property market. This does not mean that some of these centres haven’t enjoyed significant growth over the last year or so, but for consistent capital growth, the major capital centres have proved more reliable over the long term
* Don’t buy a property that is built to attract an investor. Their reasoning is that properties that are attractive to owner/occupiers will have better return and demand over the long term.
* Buy and hold.
* Don’t buy a house that is below the medium house price for the area or more than 40% over it.
Somthing I learnt that could be very valuable was:
* In some situations (they didn’t explain which) in unit complexes where there are shared facilities such as pool, gym etc it is possible that you can claim a percentage of their construction cost too. !Big money save here if true!
Regards,
Karan.Karan,
Sounds like fairly commonsense info they provided, and it’s not info that focusses on OPM (Other People’s Misery).
As to some of their information, I have a new rule for investments. buy post-1985. (14th July 1985 construction) because these allowances apply from then. So you can still buy a property that’s 18 years old and still qualify for the allowances! A quantity surveyor must supply to documentation for the Allowances or the ATO isn’t interested.
As to buying around the median range price- well, that’s all good unless you can’t afford it! Some of us would prefer 3 cheaper properties, or can only afford one cheap property. I guess what you buy is based upon what money you have
Seems these folks are providing info that makes people seem to think the properties the company are sourcing might be the better ones to purchase? As with most seminars- even free ones- there’s an agenda somewhere.
)kay henry
Karan,
I was just thinking that no new properties are really positively geared. Try buying a $300k 1 bedroom new apartment and getting $600 a week rent- not likely, even though the numbers always look good on the glossy brochures.
The only properties that can be pozz geared are the cheapies or some blocks of older style units, or some commercial properties. but new apartments? Never
Of course, I’m always up for different perspectives on this
kay henry
Yeah I agree with you Kay. I suspect when I sit down with them one on one and tell them I’m only interested in cash flow +ve or neutral they will lose interest in me quick.
I was wondering tho’. I know I’m going to be over simplifying here and I’m not taking into to account all the factors but doesn’t the cycle go a bit like this:
1) Rent yields high and purchase prices high so few +ve cashflow properties around. Top of the sellers market like 2002/3.
2) Rent yields still high but purchase prices start to fall (interest rates rise etc) so more +ve cashflow properties. Like expected for 2004/5/6.
3) Rents start to drop too because people decide they can buy for less than renting (& other factors of course) so they start buying and vacancies go up thus rent down. Around 2006/7/8
4) Purchase prices start upwards and (lagging behind a bit) so does rent. 2008/9/10
Back to step 1 in 2010/11/12.Okay don’t jump on me for the oversimplification of a very complex system [
] But seems to me that in stage 2 and 4 you will find the most cashflow +ve properties. Which means soon they will start appearing again. When house prices drop off so do building prices which means even this company that won’t deal with anything that isn’t new will still be able to source cashflow +ve places.As for the depreciation point, when you buy something that is say 10 years old or whatever, you can only depreciate the construction costs MINUS the first 10 years worth of depreciation which is where the biggest tax deductions are. (ie the longer you depreciate the smaller the amount you can depreciate if you get what I mean).
Okay now be gentle [
] I’m new to this.Regards,
KaranKaran
With the building depreciation – it doesn’t matter that there’s already 10 years gone – you claim a flat 2.5% (or 4% for some) depreciation on building cost.
You will find that the higher depreciation in the first couple of years is cos of the fixtures and fittings. Your QS will come in and put a value on all of them for you, and yes, some will be quite low value, but presumably some should have been replaced due to age etc. You can still get some good claims yourself.
Cheers
Mel
]
] But seems to me that in stage 2 and 4 you will find the most cashflow +ve properties. Which means soon they will start appearing again. When house prices drop off so do building prices which means even this company that won’t deal with anything that isn’t new will still be able to source cashflow +ve places.
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