If you had the chance to start all over again.....

[Howard]

Hello everyone,

I am fairly new to this forum and to the IP concept. I have been madly reading and taking in as much information as i possibly can. Now as a newbie i am extremely eager and wiling to accept advise and learn from the experienced.

So I would like to hear some recommendations.

My questions to everyone are - If you had the chance to conceive your investment portfolio again, where would you begin? what sort of portfolio would you aim for? and what mistakes wouldnt you make this time round? (and any other related information.)

Im looking forward to reading everyones good and bad experiences as im sure all advise will be good advise.

thanks

 

[Shaggygirl]

Well as I'm only 1IP in the game, I would definitely have started earlier!

Shaggygirl

 

[GlennM]

Tips I've learnt along the way (wish I had known from the start):

* Never buy an investment Property on a main road-had problems with tenancies
* Always use Lender's Mortgage Insurance-capitalise this cost as part of the loan-save precious $$s saved
* Renovations the way to go as far as increasing rental yields
* Always pay at a maximum 5% deposit of Purchase Price even at Auction
* Read as many books as possible and go to a few seminars (use the search function to give you some clues as to value for money seminars)
* Property Managers save much time e.g. tenant tribunal/reference checks/inspection times etc-Use them unless you have time up your sleeve-remember their fees are negotiable too!
* Understand break-even points and methods for quickly calculating Cash Flow positive/neutral/negative properties


Here are just a few to get you going.....

Remember, these represent my opinion only.



Glenn.

 

[Chantal]

Well Howard I'm not that far down the track but I can already tell you I would think long and hard before selling a property again.

We had a great house in Macleod that we sold due to the profit we made (I know that's a good thing) and we didn't really think much at the time about whether we could have held on to it and used the equity to purchase new properties. That was 3 years ago now and it would surely be worth quite a bit more! Oh well.

The only plus side is that we bought two other properties just after that, maybe we wouldn't have been able to do that if we'd kept the house. I'll tell myself that anyway.

Chantal

 

[ocean view]

starting over..??

Howard

With most of us it is not a case of starting over......quite simply we have not finished with what we have started yet!

We as investors buy as if every property is a new & thrilling concept.

My experience,,,,,,

there is a hundred ways to increase your chances of making a bigger profit than the person next door..

But it could take hours to tell..

One idea would be get out a map of outerbrisbane draw a circle 90 kms in radius with brisi in the middle,, stick to that region

Now that saves hours of talk....

a start,, Chances are ,,,you will now not need to answer the other 80 questions becuase the area is superior to most

only 20 resons to go to !!!

Remember when choosing use common sense!!! It helps

Good luck

ocean view

 

[WillG]

I would avoid buying townhouses again. Body corporates suck and reduce cashflow. Capital growth for townhouses is generally less than houses and generaly attract renters rather than owner occupiers.

Control of IP's is key for my portfolio into the future.

 

[GeeVee]

Before doing anything, I would set an a LOC using my PPOR, then draw down deposits as I needed them, instead of being X-COL and costing money to unhook it all.
All of the points others have mentioned are very good and helpful too.
Jan Somers, Sean O'Reilly, Steve Navra and many others who post on this forum state the need to sort out the finance from the start, set it up properly and then GROW fast.

 

[sanchez]

Howard

I only have about 4 years experience, but I would:

1) Not bother with mediocre new apartments in mediocre areas.

2) Be a bit more careful about finance structure (keep it simple).

3) Not assume I knew it all early on. Always listen to new ideas.

Sanchez

 

[Cosmo]

START EARLIER


2) Understand market cycles and were it is at the time you’re buying. Different times need different tactics (buy and hold, paint and punt, -ve gear, develop etc)

3) How long you’ve got left in the workforce also determines what techniques you’ll use.

3) Acquire at a moderate pace. What’s the rush? (Especially at this time of the cycle!). As your expertise builds you could change your targets.

4) Get finances sorted out (offset accounts for parking tomorrows deposits etc).

5) With the good times in property investing come the bad times (hi vacancy rates, hi interest rates etc) have backup plans that will work.

6) Mix with like-minded people in property investing. As soon as you have a fear /problem you’ll get an answer.

7) Know your target suburbs inside out and you soon see that median price should not be relied upon too much.

8) Remember when the booms done you’re stuck with your purchases for a long time. Pick good quality areas with good quality tenants even if you have to pay a bit more. Don’t bottom feed…….Too many nightmares.

9) Keep open minded about other ideas in property investment.

10) Understand and define what you're trying to achieve with all of this. Usually its to have an income stream in retirement and a good inheritance package for the kids when you're gone. Forget the ego trip stuff.

11) And what the other guys above say…….

 

[Puppeteer]

I wouldn't buy a house in joint names again. Just too damn messy when you break up.

Better off buying a house for you and one for the missus. When you break up, you take the stuff with your name on it

I'd also say start earlier, but I've really gone about as fast as I could have given my circumstances, and I've still got a long time to go before I can't keep up with the employee lifestyle, so all is cool.

Things I could have done better:

Ask more questions!!!
Find people who know more about RE than I do, and ask them questions!!!
Found this forum much much earlier, and asked lots of questions.

That's about it really...

 

[simonjulie]

Hi Howard

If I had the chance to conceive my investment portfolio again, where would I begin? Exactly the same place.

what sort of portfolio would I aim for? I wouldn't change a thing

and what mistakes wouldnt I make this time round? I would happily make all the same mistakes again because I've learned so much from them and mistakes often lead to greater opportunities down the track.

You are doing the right thing by gathering information Howard and learning from others but don't wait for all the lights to be green and don't be afraid of making a few mistakes as long as you are prepared to perservere and correct them as you go. A good place to start is to take small comfortable steps, pace yourself and enjoy the journey.

Regards
Julie

 

[perky29]

Hi all,
1/ Set up the Hybrid Trust....as Dale would say, start with the end in mind.
2/Use your LOC to fund your 20% deposit on each purchase, so you DONT have to use x-coll on your PPOR.
3/Don't purchase in an area that is about to have an oversupply (eg SE QLD in 1994) - good example now is inner city units in Melb or Sydney.
4/Buy your 1st IP close to where you live, and branch out from there further down the track....although its probably a bit late for that in Sydney now being near the end of the growth cycle.....
5/Once purchased, make sure you get a QS report done !!!

 

[ella]

QS report?

"5/Once purchased, make sure you get a QS report done !!!"

Um Perky - I'm guessing that a QS is a quantity surveyor report... ?
Can you explain (for a newbie) why? And - I'm assuming a quantity surveyor report is just a survey report - am I right? I mean - if it's a survey report, why wouldn't you do it before you purchase?

- ella

 

[Puppeteer]

Yep QS is a Quantity Surveyor.

As to why you do it after the purchase of the property, that is because a QS will give you a list and value of all of the depreciable items on your property.

If you haven't purchased the property, then you can't depreciate it, so there's not much point getting a QS through.

 

[always_learning]

Don't waste your time asking the advise of people who have not done it. Why talk with the banks financial advisor about IP when you know he/she will recommend shares, super and term deposits. The opinions and concerns of others count for zero. Listen only to those who been successfull (I did it this and I was sucessful) and those who failed ( I did it this and I lost my money), not those who did nothing, winners and loosers have knowledge of value, do-nothings have opinions worth zero.

There is a quote I like:

"People like to piss on your parade because they dont have a parade of their own".

 

[ella]

Originally posted by Puppeteer
QS will give you a list and value of all of the depreciable items on your property.

Gosh - so much to learn. Lucky I've got the rest of my life

Thanks Puppeteeer ...

 

[Garry K]

Hi Perky and others.

Originally posted by perky29
...
5/Once purchased, make sure you get a QS report done !!!

I have QS on new IP homes, but also have a unit I bought as my first IP 5 years ago, before I really had a handle on what I was doing. I didn't have a QS done because of its age.

The unit is about 15/20 years old.

Is it worth having a QS done now?

Geekay

 

[Peter_Tersteeg]

Originally posted by Garry K
I have QS on new IP homes, but also have a unit I bought as my first IP 5 years ago, before I really had a handle on what I was doing. I didn't have a QS done because of its age.

The unit is about 15/20 years old.

Is it worth having a QS done now?

Yes! The report can be backdated. It may also be possible to get a tax adjustment for previous years, but you'll have to ask your accountant about that.

My first IP was 25 yrs old when we bought it. We did a small reno but didn't bother with a QS until 18mths later. It turns out that there is 16k for depreciation in the house (reno cost 5k) and we got some extra money back from the ATO for what we didn't claim the previous year.

 

[Shaggygirl]

What does a good QS charge and do you only need to have a report done once?

Shaggygirl

 

[Cosmo]

Hi

A QS report is an absolute necessity. Last one I had done cost about $450 on a property in Sydney. It's a report that covers 40 years of depreciation so you only need it once.......Deppro was the company.

Shaggygirl note this that some one else on this forum had bought a house got a QS report done as purchased, renovated, written the old report off and started a new QS report on the new items. Effectively the writeoff values paid for the renovations!!! Food for thought……..