Hi Guys
I want to hear from you if you have converted your PPOR into IP.
What were some of the advantages and disadvantages that you've experienced when you've turned your PPOR into IP.
Did you sort of wished you've gone this path early or you've wished you haven't converted your PPOR into IP.
It is either a good decision you made or the opposite I would like to hear it from you.
Cheers in advance.
Hi DHCP
I’ll let you know in about a month! What I’m most concerned about is the attachment my wife and I have with our current PPOR. It’s going to be a very weird feeling handing the keys over to tenants (and they better keep the place in good condition!)
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi DHCP
Been there done that never again!!
The tenants totally trashed the house to the point I was out of pocket $10k after insurance etc. was fighting the insurance co over every thing and after 2.5years have given up and moved on. I've put it down to a learning experience.I don't intend to put you off however i suggest that you get your insurances, landlords, building and specifically contents as most insurance company's offer this as a secondary but don't tell you things like carpets are contents, up to date. Also get a good Property manager or screen your tenants extremely well. It took me nearly 6 weeks full time to fix the damages to a liveable state again (all done after hours and weekends) so after the whole scenario was execeptionally depressed and unmotivated to do anything else – eventually we ended selling the house after about 18 months.
My wife was in tears for nearly a week after discovering all the damage to the house that we had spent so much time renovating for ourselves.Take care and do all your due diligences
Hi Airstrike
Sorry to hear about your situation and thanks for sharing your experience. Was the property professionally managed at the time?
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie M….keep us posted (i'm sure other posters will be keen to hear about your future progress).
Hello Airstrike,
I fully appreciates your input…thank you.
I was listening to Robert Kiyosaki Real Estate investment Audio book on the way to work this morning. He advises new investors to manage their first IP. Since this is business, it is like having a go lodging your corporate tax return yourself, balancing your P&L and handling your payroll system to pay your staff salary etc. My point is, there are things can go right, BUT there are so much things can go wrong also managing your IP (e.g., tenant from hell).
The advised I got from successful real estate investors, managing your IP yourself, if not done correctly, could have an adverse impact. Further, the advised I received (from reading tons of real estate investment books , almost all of them said that get a professional property manager to manage your IP particularly to minimise the risks.
The idea for me planning to rent my PPOR (considering there are so much tax advantages) is to grow my asset based quickly since the tenant will help to pay for the mortgage plus the increased in CG help to fund another IP in the future after having purchased my first one few months ago.
The idea renting your PPOR is not an easy concept for my wife since she has strong emotional attachment to our house.
I'll will interview 4 different property managers and pick up the best one to manage my PPOR.
Thank you all for your feedback.
Cheers Leo
Jamie,
We had a family member who was on a lease and about half way through we put it into the hands of a property manager when the tennant started to have other people start living in the house. We had stressed to them that we wanted them to have the property manager screen any person they wanted to share the house with (minimise damage/risk) We then found out he bailed on the lease and left it to the shared family/familes( we were told by next door neighbour upto 17 people living in 3×1) then spent the next two weeks organising new locks and getting the other family out so we could do an inspection and blast said family member and hit them up for the money for repairs. of course they didn't do any damage so had to suck it up and do all the repairs at my cost with insurance only covering some of the repair costs.
Kinda sucked big time but i've learnt several good lessons
1 Insurance isn't everything. you can have top cover and still be putting your hand in your pocket.
2 Never lease to family/friends
3 Always jump on things urgently like rent not being paid etc
4 Always take bonds and register them with the REI of your state and tennancy boardall the best with your decision and don't be afraid to put your foot down with the tennant on issues if needed.
Cheers
Airstrikeairstrike2001 wrote:Jamie,We had a family member who was on a lease and about half way through we put it into the hands of a property manager when the tennant started to have other people start living in the house. We had stressed to them that we wanted them to have the property manager screen any person they wanted to share the house with (minimise damage/risk) We then found out he bailed on the lease and left it to the shared family/familes( we were told by next door neighbour upto 17 people living in 3×1) then spent the next two weeks organising new locks and getting the other family out so we could do an inspection and blast said family member and hit them up for the money for repairs. of course they didn't do any damage so had to suck it up and do all the repairs at my cost with insurance only covering some of the repair costs.
Kinda sucked big time but i've learnt several good lessons
1 Insurance isn't everything. you can have top cover and still be putting your hand in your pocket.
2 Never lease to family/friends
3 Always jump on things urgently like rent not being paid etc
4 Always take bonds and register them with the REI of your state and tennancy boardall the best with your decision and don't be afraid to put your foot down with the tennant on issues if needed.
Cheers
AirstrikeHi Airstrike
Some good points to be aware of and thanks for sharing your experience (even though it was a terrible one).
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Manage your own IP and the experience you will have in this game will be good…. who better to look after your $$$$ then you. I person you are paying $23.15 pw, how much do they really care, or to put it a better way. Do you care more????? I mange all my prooperties and hence are now a property partnership 9another benefit). All properties run very well with brilliant tenants, that I prefer to call friends….
There is no right or wrong answer just comes down to personal preference…..hence personally, after all investing is a personal journey towards wealth creation. Of course, if you sorround your self with people smart people, it will help accellerate your wealth creation quickly.
All the best.
Cheers Leo
We bought our first HOUSE when we were working in the bush – rented it for a year, then moved into it for two years before reletting it for a further 10 years.
Sure it wasn't as good as it was when we left and I spent 7 weeks doing some renovations and general tidying up on it and then we relet it again for a further 9 months.
Looking back we had problems with tenants, property managers, maintenance, and so on but we sold it and used the profits to build our DREAM HOME (as distinct from the other property which was simply a house)
We would have done nothing different. The key for us was the house wasn't going to be our home and it was really only a stepping stone to something bigger and better in the future. We achieved this and the ends justified the means.
Our first PPOR to IP was a great launching pad for our future.
Property investing is personal preference hence a personal choice and Derek is classic example on how he demonstrated this.
Thanks mate for sharing your experienced.
Cheers Leo
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