6 weeks and still no tenant QLD

I spoke with a PM in Coorparoo earlier today. Apparently he had 7 open houses for rent last weekend and only two parties turned up to inspect! He said it's the quietest it's been in over two years.

His thoughts were the first homebuyers boost that ended earlier this year has taken a chunk out of the market, along with immigration changes that mean foreign students now have to return to their country of origin after completing studies before they can get a visa to remain and work in Australia. Throw GFC in there too for good measure, lol.
 
We have just accepted $20 less per week than we have been getting for the past year on an IP in Coorparoo. There are a LOT of houses in Coorparoo for rent right now, and the number of hits on each of them is getting pretty high.

I don't know why, but at least we have a tenant. I did notice one place reduced by $30 a week, still vacant after several weeks. There are houses for rent that were there two weeks before our tenants left (five weeks ago) that are still empty. House was empty for three weeks this time, which is probably the longest we have ever had a house vacant. Part of that was using an agent where we normally do it ourselves, which means we are only trying to fill ONE house whereas they have lots of other things to do other find a tenant for our house. We are one of a list of many.......
 
We have just accepted $20 less per week than we have been getting for the past year on an IP in Coorparoo. There are a LOT of houses in Coorparoo for rent right now, and the number of hits on each of them is getting pretty high.

I don't know why, but at least we have a tenant. I did notice one place reduced by $30 a week, still vacant after several weeks. There are houses for rent that were there two weeks before our tenants left (five weeks ago) that are still empty. House was empty for three weeks this time, which is probably the longest we have ever had a house vacant. Part of that was using an agent where we normally do it ourselves, which means we are only trying to fill ONE house whereas they have lots of other things to do other find a tenant for our house. We are one of a list of many.......

I have just rented a 2 bed unit in Red Hill also for less than what the market should be this time last year also.

Tenants have a lot of choice at the moment, so it is better to get the cashflow and put all stops in place to strategically position the property in another part of the year where demand should be responsive.
 
I have just rented a 2 bed unit in Red Hill also for less than what the market should be this time last year also.

Tenants have a lot of choice at the moment, so it is better to get the cashflow....


So lura, the gross yield dropped from what....3.4% down to 3.2% ?? Nett yield dropped from 1.8% down to 1.6% ??


Owners obviously content with that return. Can it honestly be called a 'flow' at that level, or would it more accurate to call it a cashtrickle.
 
Thats a hell of a yeild! Were you buying madly when the all ords was nearer 3000 points?

I bought some telstra for yeild recently below $3.00. I'm thinking battered down stocks with good yeilds and full franking could be a good idea. Hopefully their yeilds remain intact.

With regards to rental vacancies. Once you've owned a commercial property 6 weeks on a resi is a breeze. You gotta do what you can but it wouldnt stress me too much.

MJK:D

The portfolio is 'blended' with a mix of high ylders right down to zero yld (such as cisco systems which doesnt pay a dividend, not yet anyway).
And that 12% is at current market prices, not original purchase price.

My overall portfolio must be cash flow positive, i dont like negative cash flow full stop,but yld is not the only criteria.

Basically i look for a minimum 15% return on each stock in the portfolio.
Some will have higher yld, lower growth and some the opposite. But total shareholder return should be at least 15%.

Keep your eye on telstra, personally i am out of the stock now, i am not comfortable with the potential decline in revenue, coupled with margin contraction (did you know that telstra has the highest margin of any incumbent in the developed world). If the margins contract to global averages, telstra's profit will dive.
(just an opinion, i could well be wrong, but if i dont have conviction i dont wont to be in the stock, great yld or not)
 
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I too finally rented my houses in Margate and Deception Bay Qld after vacancies of 9 weeks and 8 weeks...the longest for any house in recent memory.

The rents also dropped from $315 (was over inflated by 25) to $270 for the house in Deception Bay.

The house in Margate rented for $260 ...was rented for $250 last year.

I think vacancies will drop as rental supply in Qld dries up as less FHB buy and immigration from the state to NSW and VIC slows.
 
I too have noticed/felt softening in Brisbane rents. We have a post war in Zillmere that got $325 last year and $310 now. Granted it fell vacant over Chrismas which didn't help. on renewal we are going up $5.

Tenants get fussy in this rental climate so properties have to be up to scratch.

MJK:D
 
The portfolio is 'blended' with a mix of high ylders right down to zero yld (such as cisco systems which doesnt pay a dividend, not yet anyway).
And that 12% is at current market prices, not original purchase price.

My overall portfolio must be cash flow positive, i dont like negative cash flow full stop,but yld is not the only criteria.

Basically i look for a minimum 15% return on each stock in the portfolio.
Some will have higher yld, lower growth and some the opposite. But total shareholder return should be at least 15%.

Keep your eye on telstra, personally i am out of the stock now, i am not comfortable with the potential decline in revenue, coupled with margin contraction (did you know that telstra has the highest margin of any incumbent in the developed world). If the margins contract to global averages, telstra's profit will dive.
(just an opinion, i could well be wrong, but if i dont have conviction i dont wont to be in the stock, great yld or not)

I will keep an eye. Thank you. Thats the thing with stocks dividend yeilds are less certain than housing rents.

MJK:D
 
IV, I think that your view on the return on investment is pretty much the right one. At the end of the day, its the return that you receive on the money that you outlay, that should be guiding your decisions. For high tax payers, then perhaps negative gearing suits, and on the other end, those with no a lot of taxable income, they need at least neutral or positive gearing. Thats very different, when calculating "your" return, which should take in your net return, ie income less expenses, and yes, the return from the tax man should be taken into account, as well as the capital growth. If you have not got the Somer program, then at least get some one how has it, to do the spread sheet for you.
 
The portfolio is 'blended' with a mix of high ylders right down to zero yld (such as cisco systems which doesnt pay a dividend, not yet anyway).
And that 12% is at current market prices, not original purchase price.
The P/E of the ASX 200 is somewhere around 15. ie their Value Weighted AVERAGE is 6% earnings on today's market cap.

Please list 5 stocks with high intrinsic value with >12% DIVIDENDS!

There is an interesting investment theory called "Dogs of the DOW" in which you redo your portfolio once a quarter and only hold the highest dividend paying stocks. If anyone thinks there may be a grain of truth in IV's assertion that he can achieve 12% should research this topic. The "Dogs" are typically beaten up, crap stocks such as Telstra, but it all goes downhill from there.
 
Couple of weeks back the PM informed me that she has sold their business and will transfer the management of my property to another Agent. Not really happy as she would have known all this before signing me up and funny thing is, I rejected the condition in the agreement contract where they could transfer me onto another agent.
Now that the property is rented out, I’m not going with the agency they sold their business to, but instead, go for a local agent as recommended from someone on this forum. I feel one of the faults of a long vacancy was accessibility to the property and local knowledge. Hopefully this will make things run more smoothly.:)
 
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