Reply: 3.1.1.1
From: Jerry Maguire
hi hayley,
welcome to the exciting world of property investing...
you must have a plan and a very good finance person like rolf that will work with you to achieve your road to wealth...
who's the company that recommend you to buy in that complex?
from the price of $326K & the area of 60m2 it must be a one bedder in that area, you need to get a parking in alex so expect to pay an extra $30K-$60K for parking.
i know that you are new to property investing and let me ask you a question hayley,
if you were to buy a new car do you ring around all the different car dealers and get the best price?
if yes, why not for property?
do the same for rental as well.
do your due-diligence hayley and you will last the distance in this industry.
Also, ask yourself who (apart from the vendor and a real estate agent) is making money when you buy? If there's someone else eg a "property company" then it raises my antennae that the price is likely to be inflated - after all, each middleman/marketer/referrer wants some money to stick to their hands...
60m2 unit is not tiny but not exactly large...also no carpark is a major detractor and should reduce that price by about 50-60K I think...
A:if hayley intend to keep the property for 3-5 yrs or more hayley don't have to worry about if she is paying the retail price. i bought properties OTP ( off the plan ) and sometimes you can't even get a discount at all but i'm keeping it for the long run so it doesn't worry me if i'm paying the retail prices today.
From your question, I doubt you've done enough homework...that's not a criticism - you just don't know your chosen area of investment well enough I suspect. 300+ is a lot of money...you need to think VERY carefully.
A: i agree with you totally on this one nigel
I am being encouraged to buy this one b/c of high depreciation benefits, and b/c this development is actually one of the few priced ones that I can afford close into the city.
A: don't rely just on the benefits
I will take your points up with the developer.
A: sorry about the french do u think they give a damm about your points and you are talking about australand here hayley and they are not your backyarders developers
Seriously do NOT buy anything off the plan. Look at Surry Hills/Redfern/Ermington instead.
A:why not??? what am i looking at here i'm a bit lost at what do you mean!!!???
i know as a fact that there is a project in surry hills and they are selling at $900K and up the place was a success and the whole project was gone in less than 60 days not seconds.
Ermington probably way better. If you MUST have something newish, buy something that someone else has lost money on already, like a city unit.
A: i'm still trying to work out why ermington is better than alexandria??? why do you want to buy a unit in the city for?
I notice you work for a great relativeley newby on the block in the telco business.(assumptions
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Virgin Mobile is a going proposition because it has something different to offer. Even though it resells air-time (another assumption) it is packaged in a unique way which allows it good market share.
Using that analogy,if keen to invest in units (read bugger all land content) then ask yourself why someone would pay X for your unit in 10 years time. If you can satisfy your question with things like, there isnt many units in this area, or it has water views or has close proximity to transport etc, then you may wish to revevaluate the offer.
A: i agree with you totally rolf.
Australand developments are better than run of the mill from my clients experiences.
A: thats why they cost a bit more than the others hayley
Think also about what if you have to sell suddenly within 2 to 3 years (it could could happen to anyone) and the cap gain did not realise? You lost real money every week (most likely it is heavily negatively geared)
and now the lack of promised cap gain can make you really miserable.
A: what if you pay $326K for it and the property price only goes up to only $380K-$400K the worst case scenario( $74K in 3 yrs at green square ) do u think is that possible at all if you done your due-diligence in the area which is highly unlikely.
if property price doubles every 7 to 10 yrs and you only have $74K capital growth in 3 yrs shall i say HOUSTON WE HAVE A PROBLEM.
i bought a few OTP in alex also known as green square now a few yrs ago for $210K now it is worth over $400K
Why don't you ask the sales person that if they are so sure about the cap gain, are they willing to put the cap gain money into a trust account (and make it a part of the contract), so if it does not realise as per their projection, you can get compensated. Then watch their face! It will be a really interesting experience.
A: it sure will be a experience but can you tell me who would do it in the first place?
you must have done it b4 yourself thats why you are suggesting it and the salesperson must have put it in writing for you, did they?
3 years ago, I moved from Perth to Sydney to chase a girl I had fallen in love with. I packed up my unit, leased it out and advised the tenants of the 2 other properties that I was moving to Sydney but that I would still be managing the properties myself.
After paying all expenses, all 3 returned me about $150 per week before tax benefits.
3 years down the track, I am working in a job I absolutely love, have a few grand in school fees owing, married for a couple of years and wife 3 months pregnant. All is grand.
A: i like your story did you have a plan when you decided to move down to sydney?
The job that I absolutely loved was with a company called OneTel. So here we are, a long way from home, I have no job, wife is pregnant and just about to finish work, school will not allow me to graduate until all fees are paid and we pay landlord $250 per week in rent where we are staying. Just to make matters more challenging, the September 11 attacks occur, HIH goes broke, Ansett shows signs of going broke, a federal election is on the way, Christmas is looming and IT spending & employment stops.
A: like they say SHIT HAPPENS
PEOPLE DON'T PLAN TO FAIL,
THEY JUST FAIL TO PLAN
Even though the capital value of the properties was increasing, you can't eat capital gain unless you refinance....but who was going to refinance me without a job? What could I have done if the properties were negative on cashflow instead of positive? Borrowed from relatives, get a credit card (again, who would have given me one??), sell a property?? Cashflow saved me in a time of rapid change.
A: have you talk to a finance broker like rolf to solve your problems glenn?
you say that your properties is going up in value and you can refinance very easily
there is a type of loan call LO-DOC that you don't need to provide any financials at all.
so hope that this would solve your financial difficulties glenn by have a chat with rolf.
the post above is just what i think as an opinion...
like one seminar presenter use to say opinion is just like an arsehole everyone got them...
good luck on your journey hayley
regards
jerry