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Viewing 20 posts - 1 through 20 (of 22 total)
  • Profile photo of peterpithpeterpith
    Member
    @peterpith
    Join Date: 2010
    Post Count: 22

    Hi Guys,

    Im interested and would like to become a property invester, however my knowledge is not up to scatch.
    I have a property west of melbourne which I renovated and am about to lease.

    What books or website's would you recomend??

    Not to be upfront or ask for answer where to buy, what would be a good way to start. Im now ready to purchase the second home…
    would I look at inner city outer etc. high/low price? would sticking to one city a better way to start off, In my case Melbourne.
     
    Hope someone can help.

    Thanks,
    Peter Pith.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Hi Peter

    Where is your current property located?  The new property is one to live in or to rent out?

    What you can buy will of course depend on how much equity you have in your current property (ie its current market value minus the debt on it), and how much you have in cold hard cash to put towards the second property.  It will also depend on your income, which will dictate your serviceability for a loan.

    The general rule is that the land is king, as it is what goes up in value, not the dwelling.  For this reason, houses are preferable, or second to that, villa units. 

    The golden rules are generally – close to transport (ie train station), but not too close to the rail line.  Close to schools.  Close to shops.  Within reasonable commute of Melbourne CBD.  Close to the ocean if at all possible. 

    Another golden rule is to follow the infrastructure.  ie build where new infrastructure is going in (rail stations, freeways, shopping centres etc).

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Investors ZorbaInvestors Zorba
    Member
    @investors-zorba
    Join Date: 2009
    Post Count: 58
    Profile photo of Benjamin CsikosBenjamin Csikos
    Participant
    @benjamin-csikos
    Join Date: 2010
    Post Count: 114

    Pete, I'd recommend reading Steve Mcknights books for a start. He'll have you convinced of buying cashflow positive properties from day one, and avoiding negatively geared properties as much as possible.

    I plan on never buying a negatively geared property, ever. I still plan on buying many positively geared properties. I'm going to do it through dual occupancy houses. It feels almost impossible to find a positively geared property that is a single occupancy.  So, if I can't find a house that does the job, I'll build one.

    This is what I have recently done.

    I built a dual occupancy house, taking advantage of the first home owners grant of 21k. (yay!) I am renting out the second half of my house, and living in half on my side. But it doesnt stop there. I'm also going to be renting out 2 bedrooms on my side to japanese exchange students. This means, that I will be getting $300 rent from my granny flat, and a further $400 rent (after expenses have been paid.. they pay 290 per week EACH tax free) for the two rooms.  So I will be in a very unique situation where my house is cashflow positive… even though I'm also living in it!  It's a springboard to get me started onto my second, third and fourtieth property. Minimise expenses, maximise passive income.

    Don't forget, that you can also buy investment property using your super fund if you know how.

    flick me an email and I'll fill you in.

    [email protected]

    Profile photo of peterpithpeterpith
    Member
    @peterpith
    Join Date: 2010
    Post Count: 22

    Hey Jac,

    My property is in Sunshine.

    Income of partner and me $90k

    Owe Bank $245k

    Property Worth $400 -$420k

    rent when leased $320-$340

    Savings $20k.

    Looking to buy around the werribee area.

    Living at and looking after mum full time at her place.

    Do you think I can purchase another property???

    and am I choosing the correct area?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Nice work getting something in Sunshine before it got expensive!

    Yes I think you can purchase another property.  For the deposit you will probably have to use equity in your current property, because all of your $20k savings will be eaten up by stamp duty and solicitors fees.

    Suitable areas to look at would include Werribee, Hoppers Crossing and Ballarat (Ballarat has a uni and a hospital which makes for ease of rentability, so you'd want something within suitable commute of both, and also a train station to Melbourne).

    With regards to Hoppers Crossing, avoid the Birdsville Estate, which is bordered by Heaths Road, Tarneit Road, Railway Avenue and Derrimut Road.  With regards to Werribee, avoid the area north of Werribee Station bordered generally by Market Road, Shaws Road and the river.  Werribee is older than Hoppers Crossing and as such tends to offer some property that needs a bit of a cosmetic makeover (carpets, paint, perhaps a kitchen makeover) to add instant value.

    While Werribee is not without its fair share of weatherboard properties, you'll probably find that the norm is brick for Werribee and Hoppers.  I don't think I'd consider weatherboard unless I was looking in an area like Ballarat, or Yarraville where it fits in with the surroundings.

    Both Werribee and Hoppers have plenty of families with children in school (so be near a primary and high school, but not right across the road), and have a family member commuting to Melbourne each day for work either by rail or road.  So make sure train station and road passage is conveniently placed.

    Does this give you somewhere to start hunting?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of peterpithpeterpith
    Member
    @peterpith
    Join Date: 2010
    Post Count: 22

    Thanks JacM.

    Sounds good.

    Should i find a place with 600+sq for future development. At the moment im only considering propertys that are set on a larger block. What do you think?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    If you can afford to do so, absolutely.  Check Wyndham Council for the current regulations for Werribee and Hoppers.  Last I heard it was minimum 300m2 per dwelling.

    And remember – cover your IPs with landlord insurance WITH tenant protection :-)

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Benjamin CsikosBenjamin Csikos
    Participant
    @benjamin-csikos
    Join Date: 2010
    Post Count: 114

    Hey Jac, I've never even thought about landlord insurance or tenant protection, whats the general gist?

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    OK picture the scenario.  You put a tenant in your property and they stop paying rent, or damage your property. You have a bond (deposit).  Yay.  That'll be what, $1000?  That does not go far.  Landlord insurance with the "added extra" of tenant protection pays for lost rent while the tenant is not paying, or while the property is vacant due to need for repairs post-tenant.  It also covers much of the damage or theft to the property.

    Here's a link to one such insurance offer;
    http://www.aami.com.au/home-insurance/landlord-insurance.aspx

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Benjamin CsikosBenjamin Csikos
    Participant
    @benjamin-csikos
    Join Date: 2010
    Post Count: 114

    brilliant. thanks. learn something new everyday.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    It's a must-have.  God help you if a tenant trashes your house and you don't have suitable insurance.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Peter

    Think your biggest issue could be income and proving serviceability.

    Remember lenders dont like full time renvoators or developers and the bar is a lot higher to jump.

    Get your mortgage broker to set you up before you go and you should be right.

    If the deals are to buy, renovate and sells then you might want to look into the world of Trusts.

    More flexibility, more asset protection and done properly not an issue to finance.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of peterpithpeterpith
    Member
    @peterpith
    Join Date: 2010
    Post Count: 22

    hey richard,

    i think i just want to hold on the property no more reno's unless required.

    Profile photo of kkatleakkatlea
    Member
    @kkatlea
    Join Date: 2009
    Post Count: 8

    Hi Richard

    How would I start to look into the world of trusts as you put it? I am new to property investment but am interested in buying renovating and selling.

    Thanks

    Karen

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    Hi Karen

    Yes a DFT can be an effective tool when you are either acquring positive geared properties for the long hall or looking at carrying out short term buy, renovate and sell projects.

    Funding such deals can sometimes cause issues especially if lenders believe you are doing the deal purely for profit however structured correctly you should be able to do this over and over again.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of MPSMPS
    Member
    @mps
    Join Date: 2010
    Post Count: 19

    Hi there,

    I think you need to start with your goals and objectives – why do you want to invest in property in the first place?  Whats the end game look like?

    Once you have that established then you can work through what are you comfortable or interested in doing – ie renos, developments or just buy and holds etc?

    Once you have that established then its a matter of doing the research and ensuring you have the right structures and finance in place (not just for this property but that everything in in order for the properties you intend to buy in the future (whilst continually referring back to your goals!) so that you don't hit any brick walls or blockages on your journey…

    In relation to setting up a trust etc – they cost on or around $2000 to establish and you really need to identify why or if you need to set one up?  I am all for them but I see many of my clients rush out and set up a trust when they don't necessarily need to..

    You need to build a great team of people around you (ie accountants, conveyancing etc)  These are the go to people and will be instrumental in ensuring you always walk down the right road – (towards achieving your goals!) and will help you limit mistakes that may cost you (either financially or emotionally) :)

    I hope this helps, and good luck on your property investing journey!

    Take care and best wishes

    Jodie
    Property Coach and Finance Specialist

    http://www.multiplepropertyservices.com.au
    I help people realise their lifestyle goals using property as the vehicle.. As me how today – no cost and obligation free!

    Profile photo of god_of_moneygod_of_money
    Participant
    @god_of_money
    Join Date: 2008
    Post Count: 971

    Jodie…I don't think it cost A$2000.. Last time I set up cost about 500 dollars

    I totally disagree with you, not setup a DFT for purchasing property.
    there more benefits using DFT than not

    I don't want to hear spruiking around with TAX deduction or depreciation bla bla bla
    sorry only novice investor that will fall into the trap

    Profile photo of MPSMPS
    Member
    @mps
    Join Date: 2010
    Post Count: 19

    Hi God of Money,

    I am not saying to to set up a DFT – I am simply saying that when starting out you need to understand why you would set it up and what benefits it gives you..

    I am sorry if I gave the impression that I was against DFT (I absolutely am not!) I just hate seeing people rushing into setting something up that may or may not suit their circumstances or goals.. Thats all… 

    I was not and do not spruck about tax deductions etc…  I was just wanting to encourage the reader to make sure they are informed about what benefits it will give them and then make a decision on that..

    Thanks so much for your comment I didn't realise I gave that impression – as it wasn't my intention at all…

    Thanks again God of Money… 

    Take care

    Jodie

    Profile photo of MPSMPS
    Member
    @mps
    Join Date: 2010
    Post Count: 19

    Hi God of Money,

    I am not saying to to set up a DFT – I am simply saying that when starting out you need to understand why you would set it up and what benefits it gives you..

    I am sorry if I gave the impression that I was against DFT (I absolutely am not!) I just hate seeing people rushing into setting something up that may or may not suit their circumstances or goals.. Thats all… 

    I was not and do not spruck about tax deductions etc…  I was just wanting to encourage the reader to make sure they are informed about what benefits it will give them and then make a decision on that..

    Thanks so much for your comment I didn't realise I gave that impression – as it wasn't my intention at all…

    Thanks again God of Money… 

    Take care

    Jodie
    Property Coach and Finance Specialist

    http://www.multiplepropertyservices.com.au
    I help people realise their lifestyle goals using property as the vehicle.. As me how today – no cost and obligation free!

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