"Let's play catch up"

[simonjulie]

IMHO. Rents on the east coast are finally clawing their way back up to a more respectable level but the holding costs of real estate have, over the past few years grown at a much faster rate. This means that rents will have to continue to rise considerably until the balance is tipped in the direction of the investor again to attract more of them back into the market place which will over time create another quantum rise in property prices. This all hinges primarily on the rental markets affordability and government policy.
The way I see the market on the east coast ATM is that there are some good buying opportunities out there but I hold no real incentive to act as the extra pressure of adding more property to the portfolio puts far too much strain on my cash flow (unless I could maybe start seeing into the future). I believe for me it will be a year of "hand sitting and refinancing" (just in case) Or maybe I could sell everything and put the lot into a superannuation fund
What do others think?
Simon

 

[thedon]

Hi

I'm with you on the wait and see what happens. I'm in WA and cheapest place now is $400k, likely rent somewhere around $260pw. To me that just seems a terrible yield and I'm not sure what to do! Might just wait a few months ...

But then all the boks say it is never a good time to buy!

Don

 

[Mr. Fabulous]

I'd buy again this year if I had the bucks. I'm actually aiming to buy again before the end of the year. But then I'm in the position where I don't exactly have to look very far or hard to find suitable properties.

Mark

 

[Jamie]

I'd buy again this year if I had the bucks. I'm actually aiming to buy again before the end of the year. But then I'm in the position where I don't exactly have to look very far or hard to find suitable properties.

Mark

Hi Mark,

Did you actually buy your first place this year?

I know you've been posting on property investing forums for 5 or 6 years - it would be great news to hear that you finally bought your first place after giving investing advice to others for so long....

All the best mate,

Jamie.

 

[Bandita]

We'll be buying again this year (in Melbourne) - hopefully! Because of the reno we're doing, I haven't inspected - or even done a search for - a property in 2 months!! (I've inspected at least 1 - usually at least 5 - every weekend or every other weeked for the past couple of years). Once this reno is finished, we'll be straight back into the Melbourne market - although I'll be looking at potential properties in a TOTALLY different light I'm sure!

The rents are rising in Melbourne - from our experience at least - I do believe the Super changes will have an affect on "potential" investors choosing the Super route rather than an IP as they would have before, so prices might not skyrocket yet - but that will only add to the rent prices.

Our goal is to purchase one more by end of financial year.

Cheers,
Jen

 

[Mr. Fabulous]

Aye Jamie, I did - finally! Got over the hurdles put in front of me and got there in the end! Been a long time coming, but I got it! Now it's a case of just try and stop me.

Mark

 

[sailor]

I'll certainly buy again in 2007...when I finish my current renos (by June 07) I hope. Rents in Innisfail have doubled in the past 12 months (they were lagging previously), and in Cairns they've gone up quite a bit in the one and 2-bed unit market. Unfortunately, I've been trying to play catch-up with my tenancies too.

When I first bought a couple of units, they were way under market value, and I didn't increase them as much as I should have. But now I keep a much closer eye on what is being charged in my areas, and have been slowly nudging the rents up. Tis more difficult with the longer term tenants who have been there for years. Would be much easier where the tenant vacated and a new one installed with a market rate rent. Nevertheless, I am very grateful for my long term tenants, who all pay on time and none are in arrears.

 

[lizzie]

we're consolidating at the moment ... things got so hectic over the last few years (and extra hectic over the last 3 months) with buy, reno's, rebuilds, a couple of sells and new ppor we just need to take a step back, take a deep breath and let the dust settle so we can see exactly where we are.

intend on buying again over winter - in about 6 months time.

 

[simonjulie]

We have four properties in various stages of reletting ATM. The rents are increasing significantly on each of them and there appears to be excellent demand in the market place. But we are still playing catch up.
Simon

 

[asdf]

But then I'm in the position where I don't exactly have to look very far or hard to find suitable properties.

Mark

Hi Mark, Interested to hear what you deem suitable. I find a lot the stuff on the market is not exactly quality. And thats all over the Eastern Seaboard. The ones that look remotely interesting will yield me 3% net, maybe a touch over 4% if I get creative.

 

[Ajax]

Re-let my terrace in Redfern in August 2006. Had been let at $350/week for the previous 5 years (same tenants). After renovating bathroom and adding an inside toilet was let for $440/week. Property worth about $550k so represents a 4% rental yield.

When I bought in 1993 yields were running at about 7% ($210/week on $155k purchase price-interest rates were around 8%)

Also relet Darwin property in August 2006-was let for $230/week now $300/week (which is still looking cheap for Darwin rentals). Property worth about $330k-yield is about 4.7%.


Ajax

 

[Mr. Fabulous]

Hi Mark, Interested to hear what you deem suitable. I find a lot the stuff on the market is not exactly quality. And thats all over the Eastern Seaboard. The ones that look remotely interesting will yield me 3% net, maybe a touch over 4% if I get creative.

Hi asdf,

As you may know I work with Navra. I am also in the enviable position of working directly with the guy who sources property for clients from various developers here in Brisbane, which all must meet the 'Navra criteria'. So it's a bit of luxury that works well for me. Double plus bonus - I have a great job that I love and I also get to work with someone who knows the Brisbane property market better than anyone I've ever come across.

Mark

 

[willair]

As you may know I work with Navra. I am also in the enviable position of working directly with the guy who sources property for clients from various developers here in Brisbane, which all must meet the 'Navra criteria'. So it's a bit of luxury that works well for me. Double plus bonus - I have a great job that I love and I also get to work with someone who knows the Brisbane property market better than anyone I've ever come across.

Mark

Mark,well done on your start into property investing ,and as i know you
work for Navra i just have to ask why did you wait so long if you have had
the opportunity for the last few years to buy property and has the
Narva Criteria changed over the past few years,and will the system stand
up to the test of time over the next 5 years........
But the big question i want to know is where did you buy,and why?
good luck willair.......

 

[LesleyA]

Hi

I'm with you on the wait and see what happens. I'm in WA and cheapest place now is $400k, likely rent somewhere around $260pw. To me that just seems a terrible yield and I'm not sure what to do! Might just wait a few months ...

But then all the boks say it is never a good time to buy!

Don

Hi thedon,

I think saying you can't buy in Perth for under $400k is missleading! If you go

Cheak out Rockingham suburbs - $300K or just over, will buy a 3x1 in Cooloongup, not that I'd be in a hurry to buy there at the moment. Great time for offering low though!

 

[Mr. Fabulous]

Mark,well done on your start into property investing ,and as i know you
work for Navra i just have to ask why did you wait so long if you have had
the opportunity for the last few years to buy property and has the
Narva Criteria changed over the past few years,and will the system stand
up to the test of time over the next 5 years........
But the big question i want to know is where did you buy,and why?
good luck willair.......

Hi willair,

It wasn't a case of not wanting to buy over the last few years, it was a case of funds not being available. I could have bought a few years ago, but decided to put the money that I had saved up over that time into other investments.

So basically the last 12 - 18 months I've been furiously saving so I could get a foot in the door. Now it's finally happened. The whole 'if I had known then what I know now' applies in this case - but no regrets. Regrets are for people who would rather dwell on the past than look to the future.

Mark

 

[MichaelW]

Hi Guys,

This year is the development year for me, I'll be putting the three townhouses on my site in Mona Vale. Given that requires financing can I class it as a "buy" three more this year?

I'm also looking at taking a new job with Caltex based out of Kurnell, so Kay and I have agreed that if it goes that way we'll buy another house South of the harbour so I don't have to commute 1.5hrs to work each way. We like the whole Gymea area and you can get a nice big house on a decent block with district views for under $600K. We'd rent out Narrabeen and just buy again. Adding the three in Mona Vale that would take us to 5 Sydney properties by the end of the year, or around $3.5M gross in holdings. Well, the Mona Vale ones probably won't come on line until mid-2008 so that might be a bit of a stretch.

We're certainly not going to be sitting on our hands and taking stock of our situation. We're going to just keep doing what we're doing and build that portfolio as big as we can as quick as we can but by taking account of the current market trends at the same time. Hence the development in Mona Vale so we build in some equity in a moderate growth market (nothern beaches bucks the Sydney trend). Southside would be entirely a lifestyle choice, but we'd still be careful to buy well.

Maybe after 5 in Sydney we might look further North or South into the other eastern seaboard majors to see what's on offer.

PS Congrats Mark!

Cheers,
Michael.