If you think I'm asleep at the wheel because I don't physically attend auctions every Saturday in every area I own properties in, then we have a different idea on which risks to manage and how to manage them. So be it....From this garbeled message I assume you mean you don't do it now that you have a few properties that are in different locations and you don't intend to sell.
And that old chestnut when people are too lazzy to walk the walk..... they discover they have a life
Kinda reminds me of the advertisement recently on the TV from a financial planning/Insurance mob; They had the rather catchy tune with ... wouldn't you rather,,, showing a couple out enjoying themselves rather than having to take responsibility for their investments.... I wonder how happy they are now about allowing that mob to "manage" their investments into the current black hole
Warning: Bayside Melbourne Conned by Big Agent & We Lost $100,000
- Thread starter bananarepublic
- Start date
We invest only in a few areas in the bayside area of Melbourne. I am amazed that anyone on this site would be relying on a valuer to tell them what their property is worth
If your a property investor surely you know the ongoing land value in your area from regularly attending auctions and keeping an eye on the weekly auction results. Most results quote the land area so this is not rocket science we are talking about.
Nope, I outsource that stuff. I'm a passive investor, not a valuer or an agent. I have other important things to do than checking the paper and attending auctions in Carrum Downs, Berwick, etc, etc (suburbs which are at least 35km from where I live and are not 'auction' suburbs anyway), let alone any interstate purchases. Of course I have a general idea of what they are but I don't pound the pavement everyday nor have knowledge/access to up to the minute sales data like the professionals do.
I would say to you if you were a property investor you wouldn't have all your eggs in one geographical basket within one state (do you own your PPOR in this area too?).
It's hard to be independent when you have a vested interest in the property. Everyone thinks their properties are worth more than they are, just like 80% of drivers think they are in the top 30%.
It's also exactly what Neil Jenman says to do here - http://www.jenman.com.au/BS_Sellers.php (Mistake 13)
Getting the asking price right is very important. If it's too high and it goes stale and you'll probably end up selling for less than if you priced it right in the first place. For the few hundred bucks they cost a reputable valuer who specialises in the area will give you a very accurate figure. A must have IMO for a sale by owner. Plus if you're clever enough you can get your lender to pick up the tab
. You also can't rely on the agents for a valuation, too many of them use quote lies.Master of your own destiny
Well I guess we all do things a bit differently. With us we know our area (Brighton 3186 Victoria) and the land valuations better than either the agents or the valuers, we have made it our specialty. We sold our home back in 2003 at the then top of the market and reinvested that money back into another blue chip high yielding property.
We rent in the same area and the last time I calculated our landlord's yield it was 1.5%, (he uses an agent to "manage his property")
Our last commercial purchase we bought from a real estate family whose descendants had operated in Brighton for over a hundred years. They told us that the top rent we would attain would be $45,000 p.a.we got $90,000 p.a.
Our rule as to purchasing is if we cannot walk or drive past it we are not interested. We also have a business in the area and have a good network of contacts so not much happens that we are not aware of. In the past we have used valuers, real estate agents and advisors while we were learning. We don't buy at auctions any more as we have learned the best buys are often off market particularly if you know your values.
As for all the eggs in one basket. Dale Carnegie had a saying about diversification that why would you spread your eggs into different baskets and then have to juggle all those baskets, your ensuring you will drop some. Put everything into a secure basket and watch it.
Our experience has been no one has our interest at heart like we do and over time we have taken back the management of all but one of the properties as well as the valuations. We check and recheck any legal documents such as leases, contracts of sale, mortgage documents, insurance polices and council bylaws.
Yes we use the services of a solicitor but again we check everything and it is amazing what we discover because we do not sign anything without reading and understanding what we are signing.
If one of your advisors stuff up guess what? Its your problem. You don't have time to pound the pavement and educate yourself?, your a passive investor fair enough. IMHO if you want sensational results with real estate then you have to do more than the average punter.
Unlike 98% of property investors we invest through trusts for asset protection and better long term control of our destiny. In the end you do what is best for you and your family. Our kids have grown up immersed in property. They are now witnessing what happens to people when they let the experts look after the detail of their life savings.
Nope, I outsource that stuff. I'm a passive investor, not a valuer or an agent. I have other important things to do than checking the paper and attending auctions in Carrum Downs, Berwick, etc, etc (suburbs which are at least 35km from where I live and are not 'auction' suburbs anyway), let alone any interstate purchases. Of course I have a general idea of what they are but I don't pound the pavement everyday nor have knowledge/access to up to the minute sales data like the professionals do.
I would say to you if you were a property investor you wouldn't have all your eggs in one geographical basket within one state (do you own your PPOR in this area too?).
It's hard to be independent when you have a vested interest in the property. Everyone thinks their properties are worth more than they are, just like 80% of drivers think they are in the top 30%.
It's also exactly what Neil Jenman says to do here - http://www.jenman.com.au/BS_Sellers.php (Mistake 13)
Getting the asking price right is very important. If it's too high and it goes stale and you'll probably end up selling for less than if you priced it right in the first place. For the few hundred bucks they cost a reputable valuer who specialises in the area will give you a very accurate figure. A must have IMO for a sale by owner. Plus if you're clever enough you can get your lender to pick up the tab
Well I guess we all do things a bit differently. With us we know our area (Brighton 3186 Victoria) and the land valuations better than either the agents or the valuers, we have made it our specialty. We sold our home back in 2003 at the then top of the market and reinvested that money back into another blue chip high yielding property.
We rent in the same area and the last time I calculated our landlord's yield it was 1.5%, (he uses an agent to "manage his property")
Our last commercial purchase we bought from a real estate family whose descendants had operated in Brighton for over a hundred years. They told us that the top rent we would attain would be $45,000 p.a.we got $90,000 p.a.
Our rule as to purchasing is if we cannot walk or drive past it we are not interested. We also have a business in the area and have a good network of contacts so not much happens that we are not aware of. In the past we have used valuers, real estate agents and advisors while we were learning. We don't buy at auctions any more as we have learned the best buys are often off market particularly if you know your values.
As for all the eggs in one basket. Dale Carnegie had a saying about diversification that why would you spread your eggs into different baskets and then have to juggle all those baskets, your ensuring you will drop some. Put everything into a secure basket and watch it.
Our experience has been no one has our interest at heart like we do and over time we have taken back the management of all but one of the properties as well as the valuations. We check and recheck any legal documents such as leases, contracts of sale, mortgage documents, insurance polices and council bylaws.
Yes we use the services of a solicitor but again we check everything and it is amazing what we discover because we do not sign anything without reading and understanding what we are signing.
If one of your advisors stuff up guess what? Its your problem. You don't have time to pound the pavement and educate yourself?, your a passive investor fair enough. IMHO if you want sensational results with real estate then you have to do more than the average punter.
Unlike 98% of property investors we invest through trusts for asset protection and better long term control of our destiny. In the end you do what is best for you and your family. Our kids have grown up immersed in property. They are now witnessing what happens to people when they let the experts look after the detail of their life savings.
Absolutely!
I have a close friend who is a financial advisor and some of the stories he has told me regarding clients money has scared me off them for life.
That's beside the fact he is up to his eyeballs in non deductible debt and depreciating doodads.
I have a close friend who is a financial advisor and some of the stories he has told me regarding clients money has scared me off them for life.
That's beside the fact he is up to his eyeballs in non deductible debt and depreciating doodads.
Private sale eh ... I wonder if anyone would be even remotely interested in buying my house off me for $90k? We'll rent it back for a year or two for $100pw and there's only $550 a year in outgoing fees
Good post nonrecourse - kudos to you.
I agree there are many paths to the top of the mountain.
Many people think it's a good idea to put their property on the market for a high price just to see if they get any bites. Sometimes they also believe quote lies. This technique can often cost the seller thousands in additional interest, advertising and results in a lower sale as the property becomes 'stale'.
I know, my parents did the same thing when my parents divorced. It took them over a year to sell and then they ended up selling for a good 15-17% less than the original price (and probably 5% under market value) plus all the heartache and stress for them. Getting to know a market takes A LOT of time. Some say at least 3 months for an area, especially a 'non-auction' area.
When I compared the amount of time required to be able to accurately determine an optimum asking price versus cost of valuer (and took into account the potential cost for getting it wrong), for the majority of home sellers, I believe using an indepedent valuer wins.
When I decided do I specialise in one area or be able to access the opportunities around the country I decided to go for a mix. I have properties that are in the inner suburbs, outer suburbs, some houses, some apartments, new, old, high end, low end, high growth/low yield, medium growth/medium yield. Diversifying across states has big impacts on land tax too. Land tax multiplied over my investing time frame (45 years) really adds up, much more than a few hundred on a valuer.
I agree. I'll accept the responsibility and I won't use them again. I'll also share my experience as I did with this board on when I used a BA.
Of course I double check everything they say and compare with my own research. I also don't choose them willy nilly in the first place. I have an investing mastermind group and I also take into account their experiences and recommendations.
Other posters on this board have likened my attitude towards passive investing as 'putting my entire fate' into the hands of some stranger. I don't think this is true. I only outsource some functions. Property management, mortgage broking, some market research and I used a BA once. I haven't used a valuer before (as I've never sold) but I have used an online valuation service to help determine my max bid at an auction and they were $4k or so off on a ~$600k result. Well worth the $59.
My greatest asset is time. I'm only young once. As I mature and am less interested in things like backpacking around Eastern Europe for a few months (just got back a few weeks ago) then I'll take a more active role. I am very interested in property (as evidenced by my presence on this board) however I have several other pursuits right now.
Did you study law and accounting and setup your own company and trust through www.cleardocs.com.au? You can get a Hybrid trust setup for $137.50 here - http://www.cleardocs.com/products-hybrid-trust.html.
- Or -
Did you figure that your time is better spent elsewhere and you paid several times this amount (as I did) to have an accounting/legal firm who specailises in Property Investing through trusts to set one up for you.
Where does one draw the line? Obviously this line is different for many people. I'm not interesting in learning it as much as others, I'm mainly interested in getting more freedom and time and being able to do whatever I want (thx Alex).
I do have sensational results. I believe an even better way to get them is to start early so I bought my first property at 21. As a result now that I'm 30 I don't need to spend my weekends driving around attending auctions.
Yes, I agree with this and have experienced the downside. You are right in saying that nobody has your own interest at heart like you do.
However, in order to get to where I really want to be I think a key skill is constructing an 'A team' of advisers, seeking out the best, building long term relationships with them, leveraging my time and keeping my eye on the bigger picture. I'm not after another job.
The last time I organised finance I just went with my brokers recommendation because I trust him. I've used him for many years and most times it's obvious it's a good deal. Every other time I double checked it out myself his recommendations came back spot on. I don't have to check again anymore, in the same way I can walk into a Big W store and buy a book or CD I'm after knowing it's one of the lowest prices around.
I also make all the final decisions - just because a valuer might say a property is worth $x that doesn't mean that's the figure I'll use. I'll take that into consideration based on his skills, experience and level of independence in the process.
I agree there are many paths to the top of the mountain.
Many people think it's a good idea to put their property on the market for a high price just to see if they get any bites. Sometimes they also believe quote lies. This technique can often cost the seller thousands in additional interest, advertising and results in a lower sale as the property becomes 'stale'.
I know, my parents did the same thing when my parents divorced. It took them over a year to sell and then they ended up selling for a good 15-17% less than the original price (and probably 5% under market value) plus all the heartache and stress for them. Getting to know a market takes A LOT of time. Some say at least 3 months for an area, especially a 'non-auction' area.
When I compared the amount of time required to be able to accurately determine an optimum asking price versus cost of valuer (and took into account the potential cost for getting it wrong), for the majority of home sellers, I believe using an indepedent valuer wins.
When I decided do I specialise in one area or be able to access the opportunities around the country I decided to go for a mix. I have properties that are in the inner suburbs, outer suburbs, some houses, some apartments, new, old, high end, low end, high growth/low yield, medium growth/medium yield. Diversifying across states has big impacts on land tax too. Land tax multiplied over my investing time frame (45 years) really adds up, much more than a few hundred on a valuer.
I agree. I'll accept the responsibility and I won't use them again. I'll also share my experience as I did with this board on when I used a BA.
Of course I double check everything they say and compare with my own research. I also don't choose them willy nilly in the first place. I have an investing mastermind group and I also take into account their experiences and recommendations.
Other posters on this board have likened my attitude towards passive investing as 'putting my entire fate' into the hands of some stranger. I don't think this is true. I only outsource some functions. Property management, mortgage broking, some market research and I used a BA once. I haven't used a valuer before (as I've never sold) but I have used an online valuation service to help determine my max bid at an auction and they were $4k or so off on a ~$600k result. Well worth the $59.
My greatest asset is time. I'm only young once. As I mature and am less interested in things like backpacking around Eastern Europe for a few months (just got back a few weeks ago) then I'll take a more active role. I am very interested in property (as evidenced by my presence on this board) however I have several other pursuits right now.
Did you study law and accounting and setup your own company and trust through www.cleardocs.com.au? You can get a Hybrid trust setup for $137.50 here - http://www.cleardocs.com/products-hybrid-trust.html.
- Or -
Did you figure that your time is better spent elsewhere and you paid several times this amount (as I did) to have an accounting/legal firm who specailises in Property Investing through trusts to set one up for you.
Where does one draw the line? Obviously this line is different for many people. I'm not interesting in learning it as much as others, I'm mainly interested in getting more freedom and time and being able to do whatever I want (thx Alex).
I do have sensational results. I believe an even better way to get them is to start early so I bought my first property at 21. As a result now that I'm 30 I don't need to spend my weekends driving around attending auctions.
Yes, I agree with this and have experienced the downside. You are right in saying that nobody has your own interest at heart like you do.
However, in order to get to where I really want to be I think a key skill is constructing an 'A team' of advisers, seeking out the best, building long term relationships with them, leveraging my time and keeping my eye on the bigger picture. I'm not after another job.
The last time I organised finance I just went with my brokers recommendation because I trust him. I've used him for many years and most times it's obvious it's a good deal. Every other time I double checked it out myself his recommendations came back spot on. I don't have to check again anymore, in the same way I can walk into a Big W store and buy a book or CD I'm after knowing it's one of the lowest prices around.
I also make all the final decisions - just because a valuer might say a property is worth $x that doesn't mean that's the figure I'll use. I'll take that into consideration based on his skills, experience and level of independence in the process.
Just saw this article on news.com.au, don't know if that's relevant at all.
Similar threads
