Property Investing in Australia

Tassie is GOOOONEEEEEE!

2011-10-22T08:04:00.001+10:00

We have a contract on our block of land down in Tassie! It should go through no problems and, by the start of November, our consolidation phase becomes a reality. I hope to pay down our mortgage on our PPOR, with a view of increasing cash flow and a change to my investing strategy. I have been talking about this for a while and it's great to finally see the 'cash' materialise. We have also had some interest in our Ingham house, so hopefully things start moving forward even faster!

Ownership pushed to the suburbs?

2011-10-22T07:56:00.001+10:00

I often fail to see past the obvious notion that our nation's journalists are a bunch of idiotic, moronic, 'non-life experienced' idiots. I mean for instance, read this article.

While the statistics about how far people travel for work are indeed very interesting, the wording is just all wrong:

"Young people are most at risk as housing affordability worsens and first-home buyers are increasingly pushed to outer suburbs."

Does this writer suggest first home buyers should be buying the premium properties in the exclusive suburbs AS THEIR FIRST HOME? Get a grip please, a grip on the reality that the typical first home owner SHOULD NEVER buy ANYWHERE NEAR the CBD. No wonder we have our 20 and 30-somethings complaining about 'affordability'.

In Brisbane, where should a typical first home owner, in 2011, buy their home? It isn't going to be any of the 'leafy' burbs, not the Indooroopily corridor, definitely not the CBD, not St Lucia, not Kangaroo Point, none of these places are for FHOBs.

Young people need to get a grip on reality and realise that home ownership is rarely about living where you want to, but rather a compromise between four main factors: distance to work, the suburb 'age', the size of the property and the entry cost.

1. Distance to work: As in the article, the closer the better, but this needs to be balance with other factors.

2. Some suburbs, like those popping up near Ipswich at present, are new suburbs with new homes. These come at a premium. Some more established suburbs, say, Oxley, have generally older homes, but are a tad closer to the city.

3. The size of the property is always a factor, and as the typical back yard becomes smaller and smaller (read 250 square), a premium is paid for the 'larger' lots.

4. Entry cost is probably the most important factor for FHOBs. The market dictates the overall value of a property, considering ALL factors related to the 'livability' of a property, and this is continually forgotten by many many people. Entry cost dictates basically where you will live, but FHOBs can not enter the market with a $700,000 inner ring home. The article talks about stress etc., imagine what it would be like when you need to make the repayments on something like that, AS YOUR FIRST HOME.

Ciao.

The Brisbane Property Market must be VERY interesting.

2011-10-09T19:01:00.003+10:00

Throughout the last week or so, basically since this blog post, I've been intently monitoring which of my blog posts are getting the most hits, and basically it comes down to one about the Brisbane property market from mid 2009. So the question is, how come this particular post IS the most commonly hit post, again and again and again? I think I can put it down to a few points:

1. It has the words 'Brisbane Property Market' in it a number of times. This of course must be a keyword worthy of looking at, as my Russian friends attest to, bombarding the comments with junk (which by the way I've left for entertainment purposes).

2. It also has the words 'Sydney, Melbourne, Adelaide' etc. etc., once again, words that must be high hit keywords.

3. This is an earlier post on my blog, basically it's been there for a while, with all those juicy, yummy keywords, sitting pretty.

So, the dilemma is this; do I keep writing blog posts that are meaningful to me, that, I believe, may actually entertain a few people, or do I switch over and become a keyword robot, making sure that I have words like 'Brisbane' and 'Australia' and 'Sydney' and 'potato', just for the sake of getting hits?

Perhaps I need balance, a bit of Column A and a bit of Column B. Lets see, what other words may score highly? Any suggestions?

Also I am now going to add a little message to the bottom of my posts, similar to the way smonkyou does whn I read the entertaining posts on Google Reader. So...

Can I ask you a small favour? Pretty please? With a cherry? Please put a link on your website to this website. In return, if you notify me, I will back link you, or whatever else you want me to. Cheers...

I miss Google Maps Real Estate...there, I said it.

2011-10-07T14:53:00.001+10:00

Well, it's been some time now since Google's Real Estate function, that was linked to their 'Maps' website, was taken 'off the shelf' so to speak. I did a review on it when it first came out and I LOVED IT! It was soooo functional, and, even though I know realestate.com.au do offer similar functionality, it's just not the same. Anyway, enough reminiscing...

My block of land may sell soon

2011-10-05T09:40:00.002+10:00

News yesterday that there has been some interest in my block down in Lachlan, Tassie. I think it is priced very keen and hopefully this should mean I can start the consolidation phase of my plan to reduce my PPOR mortgage to a more affordable level. This would mean, financially, I can then start working on changing my circumstances on the job front.

RBA keeps rates the same and at the same time, becomes boring as batshit

2011-10-05T09:27:00.000+10:00

News that the Reserve Bank has kept interest rates exactly where they have since the start of the year is no surprise, and in doing so, have shown how 'safe' the RBA has been over the last little period. Although many of our shares investor cousins are doing it tough (although the smart active ones probably making a lot of dough), the RBA continues to hold the rates. I am beginning to think they are so fixated on keeping inflation at bay, that they are not actually looking at the rest of the data. Of course you'll 'hear' reports that they are, but currently the markets are, in my opinion, looking so negative, that this should have pre-empted a drop in the cash rate, and if this doesn't then what does? For property investors, this continual inflation minimisation policy that the RBA have in place is bad news; we need inflation to help boost our capital gains, but for the immediate future, its not look positive.

My thoughts for all to see

2011-10-04T00:15:00.000+10:00

As you may or may not be aware, I am trying to drive some traffic to my blog, and for the time being, some of the avenues I have investigated are coming through with the goods. But there is much much more to do. So, with a view of adding informative value to my blog, I have added a new section called 'Andrew's thoughts', a bit of space where what is on my mind in terms of 'advice' is now on display for all to see. I wonder if it will generate some discussion.

Gardening and the value of your house

2011-10-02T22:33:00.002+10:00

Did a fair bit of gardening today, thanks to a visit from my dad, who just so happens to have a wonderfully loud chainsaw. We trimmed off virtually all of the trees in the backyard and then I proceeded to pull out all the ferns. I have plans to create a formal look, with a lot of hedges and neat gardens. The missus has dictated that there still must be room to kick a footy and run around a bit, but when you start with a 600 square metre block, something has to give. Anyway, I have an idea or two to incorporate into this design, which will hopefully mean that we can have both; a bit of garden, a bit of grass.

It got me thinking; how much value does a neat or established garden add to the value of a property. I mean its obvious that it will present better during the sale. But, is the intrinsic value, the time you put into it, really amount to anything in terms of dollars?

I think it does, especially if someone with any interest in gardening is looking at the property. Established trees, or a neat weed free laws, or some established hedges all contribute, lets say to the tune of around 1-1.5%. So in a property that is let's say on the market for $300,000, the garden may contribute between $3000 to $4500. This may not be apparent at first, but subconsciously, I bet its there. When I bought this place, I saw a few hedges and already I was thinking about the amount of time that those, being established, will save me. Was it to the tune of 1-1.5%? Hard to say, and I think this is the overall issue with placing a dollar value on this particular item during a purchase. Its just 'hard to say'. You simply can not put a value on the countless hours that has gone into a garden, even a simple one.

Your thoughts?

Solar power in an investment home

2011-09-30T09:14:00.004+10:00

Solar power - what a wonderful invention, one that is slowly saving our planet. But recently an investor was faced with a dilemma. If they invest in a property that has solar, or installs a new system, who will really benefit? At first, it's obvious that the savings (or even the profit in some circumstances), will show up on the electricity bill, meaning the tenant is the only beneficiary. In essence, this means the owner has to somehow account for this financially. How though? Work out the approximate saving and include it in the rent? Ask for the electricity bill to be in the owner's name? Is it just to the benefit of the tenant? A cheque in the mail from a larger solar system is still a cheque in the mail. Interesting dilemma.

Time to spice up this blog a bit!

2011-09-27T12:59:00.002+10:00

On odd occasions, I like to see the data that my blogs produce, from views and visitors, to which country they're from and what brand of toilet paper they use. Interestingly, something VERY peculiar occured; during the past month, a blog which I NEVER POST IN, received MORE views than this blog!!!! How could this be? Where has my readership disappeared to? The answer is very straight forward and obvious.

I had one post on the other blog, which I linked to a comment I made on a popular blog; that's it. One popular blog comment, and it resulted in more views than for all my postings on here! So, it's time for a different angle of attack to promote Property Investing in Australia.

So far I have mainly received readers from Somersoft, a forum that I used to frequent, however, when I did not post there, there were no views of this blog. I had attempted to comment on other high hitting keyword related blogs, but to no avail, still no google hits. So, I am going to start doing what others do, just completely FLOG THE CRAP out of my blog. This means Twittering, commenting like crazy (with my blog as a link) and so forth. Maybe I can get more than 3-4 hits per day. Also, I am going to start introducing a lot more photography, something for people to see, not just read.

Feel free to give me more advice on how to increase my exposure.

Till next time Gadgets...

Property Investing Stalemate

2011-09-24T00:09:00.001+10:00

Tonight I'm going to write about what has recently happened to me regarding the world of property investing. Since 2006/7, I have continued to feverishly gear myself towards becoming an 'expert' property investor (whatever that means). It got to a point where I was confident enough to give those people that were prepared to listen, some advice. But something happened. Something in 2008, after I luckily unloaded some properties at exactly the right time before the GFC, I began having doubts. I still visited re.com.au, Somersoft was still my friend, but, as you can see on this blog, I no longer posted as much. I no longer went out looking for bargains. I no longer did the 'research' that was so familiar to me. Something inside of me got spooked. And now, as I sit here contemplating the last few months of my life, I have came upon the realisation that indeed, things have changed. Capital gain, in my world anyway, is no longer a sure bet. Rental income, again for my properties, do not always go up what they need to, or as much as they need to. Things like sliding doors break and with stupid quotes of $1700 to replace it (needs new rollers that the maintenance guy can't find) I begin to think if it's really worthwhile? Our house in Ingham, hit by the cyclone, has been a constant chase up with insurance quotes, lazy/busy/incompetent property managers, and the apparent inconvenience of 'distance investing' comes to the fore.

But alas, I think its just my sentiment at the moment; property investing is too risky, especially on a single income.

Anyway, just to summarise, I no longer consider myself an authority at any level regarding property investing. I'm still learning, there is still hope that my portfolio will blossom again, but for now, its a waiting game.

Until next time....

What is my PPOR worth in today's market (according to www.realestate.com.au)?

2011-09-12T23:20:00.000+10:00

Purely out of boredom (and the need to kill some time before my next iRacing race), I decided to go on www.realestate.com.au and perform the obligatory search for suburb, house, bedroom, that fits the description of my house. Looking past the outliers (i.e. busy road or weatherboard mainly these days), the cheapest one is $289,000. It does look a little nicer than ours, AND it's in a cul-de-sac, but is it possible that I have just made a quick $30,000 at the purchase of our house? I know, I know, I'm jumping the gun a bit, but the suburb has an aweful lot of potential and the prices, as far as I can see, are on the increase right now. Is it possible that finally we have stumbled onto a winner? Our last one was way back in 2005 when we bought our Miles property, which made a beautiful quick little profit, but it's been a dry patch since. I think though there is one important thing to keep in mind here; we like this place, it suits us nicely and as I had predicted, the smaller block size, while keeping me busy, is easily manageable. After the reno is finished (yes, it's still going), I think it's a place where my little family can put down some roots, a place to call our own, a place for my kids to grow up. Toowoomba is slowly growing on me day by day, I am loving the convenience, the drive to work is quite enjoyable and the climate is currently cool, but bearable.

So, it's a keeper is what I am saying. I'm toying with the idea of rendering the place, but how would that work when all other houses in the street are brick. The cheapest rendered house on the market is $342,000 and for the effort and minimal cost, it could be added to my list of things to do. Anyone with thoughts? I will post this dilemma on Sumersoft, see what responses I get.

Ciao for now.

Need painting done in South East Queensland?

2011-08-31T10:08:00.000+10:00

BLOG SPECIAL

My dad is doing a Property Investing In Australia blog special if anyone needs any painting done from anywhere between the Gold Coast, out to Toowoomba and up to Gympie.

For a limited time, get three rooms painted for only $700!!!

Conditions:
Includes walls and ceilings.
Standard sized rooms only.
Rooms should not need extensive repairing or pre-preparing.
Windows extra
Offer must be confirmed with a quote first.

Call Rudolf today for a free quote!

p: (07) 54940092

e: rudolfkiss@hotmail.com

Why you should call him today:

An excellent deal!
Fully insured with BSA licence and blue card
10 years experience
Your choice of colour/, including one feature wall per room!
Free colour consultancy
Emailed quotes
Dad recently painted my house and we are very happy with the results

A relative bargain 3 bedroom home

2011-08-21T22:39:00.001+10:00

http://www.realestate.com.au/property-house-tas-invermay-107524471

I have been keeping my eye on this suburb mainly because I have one of these in my portfolio, but this one seems just that little bit nicer. A bargain I think, and probably a little bit negotiable.

UPDATE: Well what do you know, it's under contract!

Renovation Update No. 02

2011-08-21T12:05:00.001+10:00

Well it's been almost two weeks since the last update, and to be honest, there has been some positive progress, but still, a lot of work to complete. I have finally finished tiling around the bath, and just today I started the floor of the shower. It's looking good; the tiles Melinda picked work well together, it's a classic black and white with a bit of bling. Still, it's hard to see the light at the end of the tunnel when a small shower stopped me from working. Why it stopped me is a bit of a mystery, but my motivation is just not quite up there at the moment.

Consolidation; the continual mind fuck.

2011-08-16T00:23:00.000+10:00

Warning: Language warning! Ops, too late.

Sorry everyone, it's the only term I could use to actually describe how I feel pretty much day to day about my current portfolio. We are settling into our PPOR very nicely thank you very much, so much in fact, that I am thinking about consolidating our assets to pay down our current mortgage. Wouldn't that be nice? A nice little mortgage to go with my current wage, I could finally venture into that business idea I have. But then an evil annoying voice in my head tells me to stop being stupid and to wait it out; after all, it's not a sellers market. So here I am, getting mind fucked by this decision. Sell now for short term gain, or hang onto the properties for just that little bit longer, perhaps a lot longer.

I see issues with both sides of the story. For example, selling up, as you all know, would mean 'all the eggs in one basket' so to speak, all the profit and equity sitting in our PPOR. This on the face of things is not so bad, but imagine when we come out of this slump, imagine the possible increases I could be missing out on in 3,5 perhaps 10 or 20 years time. Mindfuck indeed.

On the other hand, I REALLY want to start a business. I am CRAVING to start a business and this is starting to weight heavy. I could, at a pinch, commit the required funds, but then the doubts set in; what if it fails, what if it's just a money hungry nothing, what if it doesn't generate any income AT ALL? Doubts, failure, problems and work. So I need a buffer,and consolidation would do that nicely.

Realistically, perhaps I need to go back to the buzz word of 2008, which, in my line of work was 'balance' and it's still very true today. I need balance, I shouldn't downsize fully, but a bit more cashflow would be great, just so I can kick off this business once and for all. Maybe I'll just sell the non-cash flow ones, or perhaps the properties that are CF- and are non performers; what to do, oh what to do?

Until next time!

The real world of a property investor

2011-08-13T14:19:00.001+10:00

Before you read this post, checkout this link:

What is your Cash Flow Position of your IPs?

Somehow I missed this thread on Somersoft until today, but I'm glad it was resurrected, because it's an important poll. If you do the quick math, you'll find that only approximately 23% of investors on the forum have a positively geared portfolio, with the balance made up of those on neutral terms and at the other pointy end of the data, 7% who are way into the negative territory. This comes as somewhat of a surprise to me, I would have thought there'd be a much higher percentage who have 'successfully' achieved the CF+ stage, but alas no, a lot are still paying out more than they are getting back. Of course looking at this data in its singularity is flawed and, as I have here, it's easy to jump to conclusions without seeing the whole picture. For example, those on negative geared portfolios may have properties performing extremely high in terms of capital gain. Those with CF+ portfolios could have one small unit returning $10/week profit. Perhaps there could be a better way to calculate a number to indicate with greater depth the true worth of their portfolios.
Something for me to think about and perhaps come back to in the future.

Renovation Update

2011-08-10T23:30:00.000+10:00

I'm a bit tired as I sit here, ready to write a short piece, just to let you know how things have progressed since the great up-root and demolishment of the bathroom and toilet in my last post.

The good news is, we have a functioning toilet. The room is almost finished with a bit more grouting to do, but overall, very happy with the crap room.

The not so good news is, there is still plenty to do in the bathroom. The bath in particular is throwing up all sort of weird and wonderful issues for me to solve, but for some unfortunate reason, I am going to have to cut both the top and bottom of the back of the bath under the window. I know, I know, somewhere along the line it just wasn't to be, but one part of the room had to bite the bullet and this was it; it kind of defeats the purpose of having larger tiles, but this is how it's going to have to be. I will post some pore pics when everything is getting a bit closer to completion.

Ciao

Renovating our home; fraught with danger.

2011-07-19T18:15:00.001+10:00

So finally all the paperwork has finished. Phew, a sigh of relief and then it's time to take another breath and realise that just around the corner, two days after settlement in fact, the renovating started.

In the past, my first and second home, I quite enjoyed the odd round of renovating. Doing a kitchen, a dash of paint here and there, tiling and making a few changes, I never minded the often innovative work that is required to solve reno dilemmas. Two weeks ago, it was a different story.

The missus and I (well, me mainly) have decided that this house of ours in Toowoomba will be our home for a few years. No longer will I chase the dollar, but settle in, plant some seeds and relax for a while. This of course has meant.....serious renovating. I have been painting walls, looking at door frames for days on end and recently discovered the joys of using a 'chisel drill' to rip up tiles faster than you can say "put on some knee pads."

It's been fun, but two weeks of go-go-go is starting to weigh on me, so I'm having an afternoon off and hence here I am blogging. And just to set the record straight, I'm not talking about "The Block" bullcrap renovating with contractors and $13,000 bathrooms, I'm talking about getting the job done myself.

I've attached some photos of the joy I have had over the last few days in particular, along with a small injury and plenty of good old fashioned hard work. I have a fair bit to go yet, but the quick progress I've made has given me encouragement to push on through, with a two week deadline before the removal truck comes, looming.

Before

During. Surprisingly a lot of blood for such a small cut.

Almost there.

3 hours later; from go to finish. Now the fun bit.

Cheapest 'livable' 3 bedroom houses in Australia!

2011-07-05T12:28:00.001+10:00

It's that time of year again, when we do the rounds and find the cheapest livable (depending on your standards) stand alone homes across Australia (as searched on www.realestate.com.au). This year, I will rank them by price, by state. You will notice that NT and ACT are not represented; it must be bloody expensive to buy an 'entry' home in those territories. Enjoy:

6. MINNIPA, South Australia - $65,000 South Australia is the most expensive place to buy a crappy house! Who would have imagined! Terrowie took out the title for the cheapest place to buy in 2009, but in 2011, SA has become THE MOST expensive; go figure. Anyway, this house in Minnipa is actually quite cute and looks ready to move into today! I don't know much about this area, but this looks like a genuine bargain!

5. ZEEHAN, Tasmania - $59,500

Quite suprisingly, Tasmania did not take out the number one spot this year, considering the myriad of bargains that usually pop up in Queenstown. But in a strange twist, Zeehan has produced what must be the worst looking house on this list, at a relatively expensive $59,500. Let's face it people; crappy shed with windows and the usual mishmash of interior linings. LOVE IT!

4. MITCHELL, Queensland - $50,000

A lovely little town, Mitchell is just down the road from Roma on the way to Charleville. I won't say a lot about this one, except, that blue door ALONE is worth the money.

3. TINGHA, New South Wales - $45,000

Nothing says quality like a piece of miss-matched, ripped, green shade cloth hanging off your balcony, and you just know that the owner of this wonderfully crappy looking house has been watching Better Home and Gardens for styling cues. But, for $45,000, who cares! The town itself actually looks well positioned and it's rented!!! Jump in today!!! (PS. I bet it's gone within a week!)

2. BERRIWILLOCK, Victoria - $38,000

Alarm bells must ring when you look on a map and all you see are straight roads leading to this town, but this little gem in Berriwillock is just $38,000! You will probably catch asbestosis just by looking at it, but with the right attitude this place will come up a gem (to enjoy until you die from said asbestosis). Realistically, this place doesn't look all that bad, maybe I need to investigate further.

1. NORSEMAN, Western Australia - $35,000

Norseman feautured in the 2009 list and it's back again! The house you see below can be purchased for less than most new cars, but we still have people complaining about affordability! Yes, Norseman is in the middle of nowhere, and when you consider that you have to travel to Kalgoorlie just to do your shopping, it isn't a stone throw away from anywhere. Yes, the house looks like it was assembled by a blind drunk, but it's still standing and is an absolute bargain. The winner for 2011, NORSEMAN!

Thoughts on Toowoomba

2011-07-03T11:01:00.005+10:00

As you may or may not be aware, we are making the move from what I like to call my 'rural posting', departmental provided accommodation, to a house of our own. You can read about our adventures about the process so far here, here and here. While we are waiting, and while I need to kill a few minutes while my little boy is sleeping, I bring to you a quick review of Toowoomba.

Actually it's not so much as a review, but more of a 'my impressions so far'. Toowoomba, if you have ever been, is a unique city. For one, it's not actually on a river, which means it is much easier to transverse the city, rather than having to 'get to a bridge' if you know what I mean. There is an annoying airport towards the western end (where we bought our house), but it's tiny and I think in about 10-20 years, it will be moved away from the city, somewhere out of the way, but still close enough. The city itself is a reflection of the location of the place; there is no major city centre mall, although there are a few shopping centres dotted around the place. There is ample parking, a sign of the rural need to cater for the farmers coming in for a visit from the bush. Toowoomba caters for A HUGE area of land mass, and it's not uncommon for travelers to make the trip from as far out as Charleville just to do some serious shopping.

The people are a mix. As they are everywhere else. Walking down Ruthven Street, you get the feeling the place is becoming cosmopolitan, a few cafes, fashion outlets, boutiques and general shops, this certainly is not a dull shopping experience, albeit no different from any other regional hotspot. Passers-by range from the chick and classy, to working class and the odd suit and power dress here and there. The streets are lined with Commodores, Falcons, Hiluxes and Nivaras as well as the occasional BMW and Mazda 6. What you also see a lot of in Toowoomba, is people movers. Maybe it's because I'm in the market for one, but I see a lot of Carnivals, Territories, Taragos, Foresters and Captivas. Somewhat alarmingly, and I suppose I should have expected it, a large number of these vehicles have occupants with Cowboy hats; wearing them while driving. This is always a clear sign that you should be on attention as a driver.

Toowoomba has many schools, too many really, as the city caters for the boarders from farms far far away; money rolls through the city I think, mainly because of these places. There is apparently crime, but you wouldn't really notice by the way the majority of houses are neatly displayed, small gardens and fine manicured council strips and front yards. The city is proud of it's 'garden city' title, and it seems a lot of the locals embrace this notion with two hands.

I will weigh into the debate about the bypass. Toowoomba's main arterial road turns into a four way, non divided street, called James Street and it turns sharply right as you head west, to Tor Street. The number of trucks and semis on this road is a joke; a necessary joke. Toowoomba is THE MAJOR thoroughfare for getting produce etc. from the west to the east and only an idiot would not see the need for a bypass road/tunnel to be built; and let's not forget the dangerous range road. I think people may say that it will be bad for business, but I disagree. What is missing in Toowoomba? A central area, not invaded by traffic. Toowoomba could have it's 'country ambiance' back without the city turning into a truck yard.

Blog Update

2011-07-03T10:01:00.003+10:00

After seeing The Richest Girl in Bondi's blog, and really enjoying some of her content, I realised that perhaps this blog needed a bit of light. Although I like to see dark and black backgrounds, it dawned on me that perhaps my readers (I know you're out there) may appreciate a more upbeat and 'lighter' viewing experience. So, I have changed the blogspot template, with a hope that you the reader will enjoy the viewing experience a bit more. Your feedback appreciated.

Also, I have taken the step to purchase www.propertinvestinginaustralia.net.au since the .com.au domain was already taken by someone (I wonder if it's me also, from a few years back). ANYWAY, I noticed I was not getting any hits from Google's Australian sub-search and that I did not show up on the first 20 pages when typing in 'property investing in australia' as separate keywords; hopefully this domain name will rectify this issue and hence, get more Google links. At the moment, I am lucky to get one search hit per day, versus about 5-6 hits from websites. I'll keep you posted on the results.

Ciao

The frustrations of getting a settlement through

2011-07-01T14:21:00.003+10:00

As I sit here, I am beginning to feel a bit of rage; actually, quite a bit of RAGE! You see, we have been trying to settle on a new home, a home for my family. From the get go, we have had delays. Now, after a few more weeks, there is ANOTHER LENGTHY DELAY. The matter should have settled on Monday, but now we have the seller taking their time to sign transfer papers and here we are, trying to take possession so that we can move in before our second little protein bundle enters our lives in about 6 weeks or so. It seems none of this matters to anyone really, not our broker, not the bank, not our solicitors, not their solicitors, not the seller. I'm probably just venting a bit, but we are powerless to push anything through. I do get a bit peeved (I could have used a much worse adverbial phrase there) though, when we hear statements such as 'They forgot to post it...' and 'He forgot to send it Express...' and 'He got his brother to post it...', which by the way, must be utter bullshit, since it's now been almost a week for this envelope to travel approximately 120km. So, I think Melinda hit the nail on the head when she suddenly realised they are probably stalling for the financial year; it all makes sense. Doesn't make our predicament any better though...NOT HAPPY JAN!

Hopefully next week I'll have some more positive news.

Rant over.

The RBA finds it hard to justify rate rises.

2011-06-21T19:24:00.003+10:00

That's how I read it anyway. Unfortunately, one second it's going up, the next second it may actually drop, then we read articles like this. A bit of a mystery this is...

Finally, finance has been approved!

2011-06-17T14:50:00.003+10:00

I won't bore you too much with the details, but organising the finance for this purchase has been a mini nightmare, with one stupid unnecessary delay after another. After a lot of stuffing about, finance was approved today, about a week and a half late.

I pondered on this scenario for a while and I now ask myself are banks THAT BUSY right now that it takes them over 4 weeks to approve a loan to a relatively low risk client? We have NEVER missed a payment, not even close, we have cross-collateralised way below 80% LVR, and the house we're buying a is a solid place which we will be living in. Considering the above, perhaps maybe I should apply to become a bank lender, as I can not see how ANY approval would take any more than 30 minutes. Banks, surely, SURELY, would have a lending criteria tick-and-flick, finance approved or valuations, or not. Come to think of it, a large chunk of the issue was getting to the valuer stage, which is bizarre! I'll role play a lending officer for a moment:

1. Receive loan application

2. Observe on the application that the mortgagee wants to cross collateralise with a list of properties: Order valuations.

3. Continue process of organising paperwork and making an ad-hoc decision based on paper estimates.

4. Receive valuations, approve loan.

5. Go and eat KFC.

So why does this take 4 WEEKS PEOPLE! 4 WEEKS? A load of crap...

Property Investing in 2011

2011-06-05T08:04:00.008+10:00

I have been wondering for a while whether investors in 2011 are active. As no doubt you know the market is having a breather and there are A LOT of properties for sale. So, I posed the question on Somersoft and here are the results:

As you can see, 11% of people who have read my post are still buying, and not just one, but multiple properties. In fact, some are buying whole complexes and one investor has bought 14! He is an exception, but 44% of respondents have purchased already up to June. This does mean that 56% are either sitting on their hands, consolidating, offloading, or going bankrupt.

There is much to read into this data. If we do in fact have almost half the investing population still active, this should echo the sentiment of real estate agents, who, as far as I've experienced in my investing regions, are all saying the market is flat, only JUST becoming a little bit busy. So now I'm confused; is the market flat, or is the market busy, and perhaps more importantly, is the market moving ahead?

While I don't tend to analyse this area too much (as I believe property markets move ahead for medium to long term investors, which I believe I am), if the market is flat, now is the time for investors to pick up bargains. Now is the time to see if, even at 7% interest rates, you can find cf+ properties. Now is the time to see if an investor can try to penetrate inner city, or exploit regional/rural areas. It makes sense for cashed-up investors to be active, to put in ridiculous below market offers to see if they can catch a beauty.

Until next time!

Contract on PPOR

2011-05-22T10:36:00.004+10:00

After a quick calculation of funds, and having frequent visits from mouses and rats at our current govy rental, we have put a contract on a suburban home in Toowoomba. OK, it will mean a 40 minute drive each way to work every day, but it's still a lot better than many, and it also opens others doors for my little family (which by the way, is expanding to 4 members).

It's a nice house, an ex rental with a bit of work to do, but as I posted earlier, the smaller block will mean less maintenance and allow smaller internal and external projects to materialise. I have recently acquired a nail gun which means I will be having a go at a deck and external feature screens and other Better Home and Gardens pieces.

We played what I like to call 'halfsy-halfsy' with the agent. Negotiations went:

On market for $268,000, which was already a drop from the initial $274,000.

We offered $250,000 (which we thought was a reasonable low offer)

He/they countered with $260,000 - (first halfsy)

We countered with $255,000 - (second halfsy)

They countered with $257,500 (third halfsy)

At this point we stayed resilient, as every thousand saved here, was money that could be spent on renos. So we said $255,000 we believe is a good price. (A firm halfsy resistant counter, based on the other halfsies.)

He/they countered with $256,000, which we accepted.

I believe successful negotiations, and the right price for this property, in this street, in this suburb.

I'll write more when the contract finalises.

Bad News

2011-05-17T07:53:00.001+10:00

Housing Finance Falls

Bad news for investors I think. Or is it positive? Hard to say...

realestate.com.au: PLEASE WORK!

2011-05-16T18:21:00.004+10:00

I don't know about you, but I love the 'Map' feature on re.com.au, which has now been around for quite some time. What I ABSOLUTELY HATE about it, is when I choose to limit to 4 bedrooms, that's right, 4, and i get a gazillion 3 bedroom properties. That's right, 3. So what gives?

Please fix this re.com.au, I love the new functionality, but something this simple needs to be addressed.

Buying a PPOR - emotional stuff.

2011-05-15T12:49:00.006+10:00

The time has come to buy not a house, but a home. A place that we will live in for a while, a place that we can shape and mold over the years to make it our own. To give you an idea, I'm already looking at iPad wall mounts for our kitchen so that Melinda can use it as a recipe book. THAT SERIOUS.

So we've been looking around Toowoomba and to tell you the truth, house prices haven't changed much since we put a contract on a rental back in 2007. Luckily the sale fell through, I doubt we could get much more for it now. We're in the market for a 4 bedroom place, not a big yard, somewhere near a park and easy commute to my work. We are also thinking that this may still be a 'transition' house; a house that we will be in for about 3-4 years, before buying something even more to our liking.

I have made peace with one aspect of my current stage in life. I do not want a big back yard. Not now. I am busy enough. I have other stuff to do on the weekends, rather than spend countless hours gardening (even though I do love it).

So this one decision has taken a huge factor out of buying a house; the size of land.

We will most likely end up on a 600 square block, which, now, is fine with me.

Reflections on a Broken Strategy

2011-05-10T23:19:00.006+10:00

Back in 2009, I posted about a strategy that got me very excited about an early retirement.

Basically, it involved an acquisition phase, followed by an LVR equity draw-down phase. It all seemed so simple back then. The GFC had just hit, but the housing market stayed resilient and there was no suggestion of the 7% annual growth pattern subsiding. How wrong I was.

It's now 2011 and my properties have performed dismally. When I mean dismally, I mean DISMALLY. There had been virtually no rental increases on any of the properties and CG has, instead of the 7%, been on average 1-1.5% per year. DISMAL.

What else has caused a deviation from this 'plan' I hear you ask? It's only been two years after all, hasn't it?

The answer is cash flow. Without boring you with details, I have had to unload two properties; one, a money hungry beast with some maintenance issues the other just came along at EXACTLY the wrong time.

Rather than point the finger, I think it's basically a combination of a few factors, and probably the weird alignment of some planets, that has lead to this scenario.

So where to from here? Cash flow is now looking better thanks to the sales, but we are now looking for a PPOR, which will 'lock away' more cash flow. Will the market return to the 7% days, I honestly can't tell you, but what I can say is that in Queensland anyway, the $400,000 psychological price ceiling is still well and truly alive and wages just aren't going up fast enough. So, for an average investor like me, it's just not happening. I am looking to hold on to properties, but when rents are not going up, and prices are staying stagnant towards the bottom end of the market, it's not looking pretty.

Until next time...

A bit of har har for you

2011-02-13T21:58:00.005+10:00

Love that last one, I actually kind of want to make and live in something like that.

Shaky start to the year

2011-02-13T20:40:00.004+10:00

The start of 2011 has been an interesting time, with floods and cyclones, the housing market is looking a bit worse for wear. What will this mean for property prices for this year, after all, 2011 is supposed to be the "recovery" year many were predicting, finally getting out of the shadow of the 2008 GFC.

Melinda and I are in the process of finally selling our biggest cost investment property, a 3 bedroom brick home in Ferny Hills in Brisbane. For the first time, we have tried an open listing and currently have three agents on the case, two of them very actively trying to sell it. Strangely enough, of all the properties we have on the market, this one has attracted the most interest and it looks like an open listing is going to sell it. Yes there has been some communication issues and I'm sure the tenant is feeling hassled by all the open homes they keep requesting, but it's working, we should have a sale soon. It helps that it's priced right.

I also wanted to let you know I have taken the big step of setting up a trust, a family discretionary trust to be exact. Why it has taken so long is a bit of a puzzle, but for a couple of hundred bucks, we are finally learning to "set up structures" that should benefit us come tax time. Trusts such as this allow flexibility and really, I should have done this sooner.

That is all for now, I keep saying I will try to post more frequently, it's just that life is getting busier and busier as the days go on. Oh I almost forgot to ad, I have a new job and we have moved back down to the south-east; opportunities await.

Out of Flood

2011-01-18T15:21:00.003+10:00

Luckily our Brisbane property survived relatively unharmed during the recent round of flooding in Brisvegas. I wish everyone effected by this disaster a quick recovery, both economically and emotionally.

What will happen to the Brisbane market now? I tend to think not a hell of a lot. You see, humans have very short memories and although there may have been a huge flood in 1974, the next one occurred in 2011. That's a 37 year gap to forget, to put it out of our minds, to not worry about. The multi million dollar properties on the river, well, seriously, if you can live there, you can afford the damage bill. There are those people doing it tough right now, but in four to five years we will have to think hard to remember the "inland tsunami" and the 4.6m Brisbane River peak.

Let's see if you can remember the year of these devastating events:

1. Newcastle earthquake?

2. Cyclone affecting Cairns?

3. Cyclone affecting Darwin?

4. Cyclone affecting Innisfail?

5. That huge drought? How long did it last again?

6. When was Birdsville last cut off?

7. Ingham floods?

8. Victoria bushfires?

This is just a tiny list I came up with from the top of my head.

Memory is short, money is king. Long live money.

The Big Offload

2010-12-05T07:29:00.005+10:00

After three years of crappy crappy growth, and a few life changes too mind you, out portfolio has to "compact". In other words, I've got to flog off a property or two. So below, I present to you what we have on the market currently.

1. Ferny Hills - This has got to sell. It's costing us a bucket in holding costs and it just hasn't done what it was supposed to in the time we owned it. It's supposed to be worth $480,000 by now, but I think we'll be lucky to get what we're asking.

http://www.realestate.com.au/property-house-qld-ferny+hills-107011375

2. Invermay - a cute little cottage that is very well located. Not desperate to sell, but we'll see if we get lucky.

http://www.realestate.com.au/property-house-tas-invermay-106539389?activeSort=list-date

3. Lachlan - 29 acres of Tassie bliss, this is the bargain out of this list. It's worth much more I think, but no bites yet.

http://www.realestate.com.au/property-residential+land-tas-lachlan-2781913

4. Ingham - Our beloved PPOR (well, beloved would be going to far, let's just say the place we have lived in for the last year or so) is also on the chopping block. It's a decent enough house with plenty of space and should suit first home buyers. Hopefully someone sees the potential we saw. We're moving hence the sale.

http://www.realestate.com.au/property-house-qld-ingham-107043929

As soon as one sells (hopefully Ferny Hills), the others will probably come off the market. This actually forms part of my portfolio strategy, however I had wanted to wait much longer before exercising a sale. Tough times calls for tough measures.

A few months later....

2010-11-28T21:25:00.002+10:00

Well, once again I have left this blog sit here, do nothing, just begging me to write about the turmoil that is the current housing market in Australia. There seems little hope on the horizon for us investors, with rates going skywards and house prices standing as still as a seagull who has just seen a wild cat lurking underneath the branch it's sitting on.

The markets I have my properties in are performing.....shithouse. There is little movement in Queensland as the market has finally realised that thousands and thousands of houses for sale can not be a good thing and the people have spoken. I know, I know, you will say, yes Andrew, but it's just the time of the investment clock, the part where interest rates go up (as do wages), houses prices are stagnant, it's just like the last time when all of a sudden the market went crazy.

While that's all well and good, I have an uneasy feeling that something is different this time. Perhaps it is the number of houses on the market, or the indicators in one suburb at least, that investors are offloading, and they are doing it in a big way.

It's exciting times, but not in a positive way. I have to offload, at least one, if not two, and if that's the case for me, I would hate to see how the big investors are going.

Good bile.

Your Opinion - the 2010 Property Market

2010-07-25T14:46:00.006+10:00

From the survey questions that you see on the right hand side of this wonderfully awesome blog, your opinions regarding the movement of property in 2010 has shown some interesting results. 23 people voted and overall, it seems we are continuing to be optimistic. 74% of you voted that at least, the property market will stay flat, while 35% overall thought property prices will continue on their merry way and that it will be business as usual.

I suppose the only information that is missing is whether the respondents were in fact home owners or investors or non-investors, or whether the responses were made by mindless bots trolling through the kazillion websites, voting at will, rendering any information derived from such polls as useless. We will never know, but let's for argument's sake maintain that it was indeed humans who responded.

A lot of what happens to property prices is down to sentiment. If we are happy and feel that property is a great investment vehicle, than our good sentiment will flow down through property, through shares, through business, down to the pockets of all Australians as we continue to relentlessly increase the prices of homes in this great, and often dry, land.

I think for quite some time we will see this positive sentiment continue, especially if the upcoming election, inflation rates and RBA decisions go in investors' favour.

Time to stocktake the portfolio

2010-07-18T08:39:00.005+10:00

It's the end of financial year 09/10 and it's time for my little "business" to have a stocktake. So, let's see what we have now:

Bought this year:

1. Ingham (north Queensland) 3 bedroom highset. Currently our PPOR.

Continued to hold:

1. Ferny Hills (north Brisbane) 3 bedroom brick and tile. This was supposed to be our PPOR one day. Mortgaged. Rented. CF-

2. Invermay (Launceston, Tasmania) 3 bedroom + sunroom, dodgy weatherboard in an excellent location. Mortgaged. Rented (sort of...in the process of eviction). CF-

3. Glen Aplin (near Stanthorpe, south Queensland), 810 square block in an old small subdivision. Sitting pretty. Not mortgaged. No income.

4. Lachlan (40min from Hobart) 29 acres of splendid mountain/valley/river/town views and about an 8 minutes drive to New Norfolk. Sitting pretty, but looking to do SOMETHING to derive income. Not mortgaged. No income.

Sold this year:

1. Toowoomba (1 hour west of Brissie) 3 bedroom colonial in a historic estate. Was a dog when it came to cash flow.

So overall, our portfolio has entered a "consolidation" phase. By buying Ingham to live in (in town, better for missus and myself), our earlier Toowoomba purchase had to go. Cash flow this year reduced thanks to my beautiful little baby boy arriving and allowing my missus to be a stay at home mum, which far outweighs the benefit of additional cash flow. This does hurt our ability to maintain a negatively geared portfolio though. Balancing act anyone?

So how are we travelling? With the sale of the Toowoomba dog, we are OK. Capital gain (CG) has, according to valuations, dropped, but I am putting that down to the bank being cautious. I think at worst, we have increased our CG by approximately 2% this year. In my day job, I have yet again received a pay rise, so things are comfortable, but that bloody Rich Dad, Poor Dad book is still fresh in my mind. Look out for news around a business I may be buying.

Where to in 10/11? The portfolio is negatively geared and our serviceability is low. There are a number of scenarios, such as further down selling, which could increase our ability to service another property or two, but do I really want to? It would involve selling Lachlan, the block which I think has so much potential. I can't bear the thought of "little short term gain" over the "massive capital gain" that COULD occur. It's all a question of time. I will probably put it on the market, mainly because I see bargains EVERYWHERE at the moment and I want to jump in...BUT CAN'T!!!!! I have found some very good properties, close to CF+ and in great up and coming areas....what to do, oh what to do???

PS. Don't forget to vote on the right, some clear patterns are developing, but it would be great to get a few more people's opinions.

Chillin and chattin...

2010-07-08T13:40:00.004+10:00

I've been enjoying a well earned break from my day job and in the two weeks of R&R, I've had a few chats about RE with my family. Not only had my sister and brother-in-law FINALLY bit the bullet and bought a 4 bedder (congrats by the way), but now my parents have began looking for a decent do-er-upper. I on the other hand have SOLD SOLD SOLD! That's right, finally out Toowoomba property has sold, and it was about time too...many delays with finance and banks doing valuations and paperwork and blah blah blah, but finally, it's all finished. So, I have now had a unique experience of owning a piece of property, had NEVER seen it in real life, and have now sold it!!! Did I make money? Not really, but it was a fire sale and ultimately for the greater good. Now the time has come to contemplate the next step, a step into maximisation, either to increase cash flow further, or, spend some dosh on our little Invermay property in Launceston. Either way, good time are ahead for finances for my little family.

My parents are looking for something on the Sunshine Coast that they can quickly kit out and on sell. I hope they go through with it, it will be a great learning experience for them. Dad can do the painting (oh, and if you need any painting done on the Sunshine Coast, give him a call, he is a perfectionist - 0438940634, qualified) and Mum has an eye for style.

Anyway, life is good in investment circles atm...ciao for now.

Well who would have thought...

2010-06-15T21:43:00.006+10:00

It's kind of weird, but my sister has crossed over to the dark side and has become a REAL ESTATE AGENT!!! AAAGGGHHHH!!!!! It's like I've crossed over into some unjust parallel universe, where the world has gone topsy turvy and things just do not seem the same. Anyway, Andrea Appelman is her name and she has a few listings around Beerwah on the Sunshine Coast in Queensland, a VERY competitive market for agents at the moment. It's cut throat getting listings, but she is battling on and starting to get places. Thought I may help her out a bit so here is a link of her listings...

She is trying to carve out a nieche for herself and if you're a successful agent, please send her an email or give her a call, she could use a few more tips to really get things moving (not coming from me of course)...

A quick shout out....

2010-06-15T21:30:00.005+10:00

I have recently had a really positive experience with Andrea Bonner, at LJ Hooker Launceston. She is selling my little house in Invermay, an inner up and coming suburb of Launceston. Andrea has been very professional, even seeking feedback on the re.com.au ad and is an excellent communicator via emails and on the phone. She has never pressured me to do anything and was very patient waiting for us to list after a few months of to and fro-ing on our behalf.

Well done Andrea, it's people like you that give re agents a good name, instead of the usual crappy service and constant pressuring.

I have to be honest, I can not say this about other agencies I have worked with in the past. Rude, arrogant, even going as far as giving me a "put down" about how much I bought the property for...the kind of idiot we can all do without. Anyway, well done Andrea....

Shhh!!!! The market is sleeping....

2010-05-23T12:06:00.004+10:00

Property investment land is a funny place. One minute, you are running off to KFC, blabbering off about how well everything is going, the next, dark clouds gather, the day turns gloomy and you wonder if you will make it through the day with a cent to your name. The market has been very very (and just in case you missed it the first two times, VERY) quiet. A few of my real estate buddies are reporting quiet times and in Ingham, where there are 6 agencies, re.com.au is only indicating TWO SALES PER MONTH!!! I wonder how long before a few of them will shut.

I do see light at the end of the proverbial tunnel. If interest rate rises finally stop this month, investors will jump. Yes, the share market is up the shit, but who cares? It's volatility is having an impact but investor sentiment regarding property should be high, especially after seeing how the market battled through the GFC strongly.

So one day, it's sleepy and not a lot of action, the next, perhaps after an interest rate announcement, KAPOW!!!, things will move again. It's the up and down tipsy turvy world that is property investing.

A bit of action around the two cheepies I have for sale, but I don't count sheep until they're in my bank account.

Ciao...

Another one on the market.

2010-05-16T14:06:00.004+10:00

The time has come to offload another one of our properties, this time a very well positioned little gem in Invermay. It needs a bit of work, I'll be the first to admit, but it's still an excellent bargain for an investor. I think the price is right...it's renting quite strongly and the recent improvements and maintenance means it will be a solid performer for an investor.

PS. I have my eye on an absolute bargain. I won't give away details, but lets just say it would be what I like to call a "low risk gamble."

Until next time fellow investomites...

Just thought I'd throw this in....

2010-05-03T20:37:00.006+10:00

KFC is awesome, so this has to be included here...property investing is augmented by the consumption of KFC. Oh, and the Colbert Report is hilarious...

Another stupid, pointless, untrue, unnecessary and idiotic headline!

2010-04-29T06:38:00.002+10:00

"Housing Shortfall Locking Out Thousands!"

What it should have been titled is "I was talking to my idiotic mate who has no idea about property whatsoever, and he said people want to buy but there aren't enough houses around!"

Absolute rubbish....I can't believe articles like this actually make it onto a national news website...

The downsizing has begun...

2010-04-18T21:22:00.004+10:00

This property of ours may soon be sold. I would love to keep it, it was a bargain, but for whatever the reason, it has stayed quite stagnant over the last year or so. Why are we selling? Well, cash flow has taken a bit of battering, so I have to pull back. Too many properties and because we bought our PPOR last year, it tightened the strings even further...will keep you posted...

To go forward, sometimes you have to go backward. (I'm sure it's not original, but feel free to quote me..)

A quick reminder, don't forget to vote in the polls to the right, I would love to see your opinion regarding the different questions.

Ciao!

Could this be the world's best mortgage calculator???

2010-04-11T00:50:00.002+10:00

I think so...what do you think?

http://www.drcalculator.com/mortgage/

Uncle Glen...do you have to???

2010-04-08T09:45:00.004+10:00

I was holding out for Glen Stevens to at least hold off for one more month before continuing to increase rates, but it seems he has finally decided enough is enough when it comes to property price rises, so he upped it. Hmmm...I wonder if he realises that raising interest rates is kind of a green light to raise rents, and, from an investors point of view, this is great. However, this does not negate the fact that rates are up and my holding costs mean even less chance for me to have KFC (which by the way, I have given up on until I drop to 80kg; 4 more to go). So, in summary, it's good and it's bad. Investors should see CG in the near future, as the economy is strong (so it seems), hence there is no need to panic. Will this rise impact on the current mini boom, especially noticeable in Melbourne at the moment, and to some degree, Sydney? Will this signal a change in sentiment, are investors going to shy away from the market? Time will tell, but for now, as we are constantly being reminded, we are still below "average rates"...

Ciao...

Why I like Tasmania...and so should you!

2010-04-03T11:13:00.005+10:00

Tasmania is a great little piece of paradise at the bottom of Australia, albeit a very cool and miserable paradise for most of the year. It is filled with old growth forests, mountains of green, boundless plains of rolling hills and areas of drought. Amongst all this are a mix of quaint, little villages, deserted mini towns, a few sprawling urbanised towns and the jewel in the crown, Hobart. Perhaps more pertinently for us investors, Tassie represents the cheapest real estate entry costs found anywhere in Australia.

Why is Tassie soooo cheap? I mean seriously, you can buy a decent 3 bedroom house with minimal work required in Queenstown for $40,000! Queenstown has shops. It has minimal infrastructure, but it does have a new hospital, it has awesome windy roads, it has chilling Roaring 40's winds, it has barren environmentally catastrophic hills surrounding it and the creek is yellow, but why wouldn't you want to live there? When you consider all the facts, I wonder if the weather is just THAT BAD, that people hate it THAT much. If that is true, perhaps with a bit of climate change, it would scrub up nicely in about 50 years or so, but that's a separate story.

Other parts of Tasmania offer unbelievable real estate bargains for investors too. Launceston, Burnie, Devonport and Cygnet. All low entry, excellent properties, some almost CF+ with great potential.

Hobart is thriving, just think Brisbane 30 years ago, the catch up is imminent. I hear great stories of developments and "refreshing" and "updating" and "modernising", verbs that have me thinking there is hope for MASSIVE capital gain in the not too distant future.

I currently have two tiny chunks of this wonderful State. My block of land not too far from Hobart is virtually my dream come true. It will one day make me a millionaire, if not a multi-millionaire. My other one is a renter, almost CF+ hidden in an area that could boom massively. If only the AFL would allow a Tasmanian team into the league. I have seen growth and I am sure I will continue to see growth as long as the rest of Australia keeps heading to the 1million plus club, Tassie will continue to be the little engine that could.

It's enough to make me vomit!

2010-04-03T07:27:00.005+10:00

It's been a hectic few months for property journalists and the inevitable has once again happened. When house prices go up as they have in the last quarter, we get the typical "The Aussie Dream is Over!" and "First Home Buyers priced out of the Market!" and "Affordability Worse Then Ever!" and "I Have to Come Up With a Controversial Title!". Example here.

This sickens me to my core (unlike KFC, which now is sickening me in my stomach). As you are probably aware, Melbourne is going through the roof, house prices climbing everywhere, but most noticeable in the inner city. Yes, of course your typical buyer or investor will not touch these properties. Wealthy businessmen, overseas investors (Chinese, American and English from what I hear) and cashed up investors are snapping these up like my grandma snaps up plastic containers at Crazy Clarks. But who reads the papers??? Yep, typical blue and white collar workers, wanting to purchase their own special little piece of Austrelya (pun), perhaps first home owners. Unfortunately, people who write these stupid articles are using this segment of the population to inadvertently boost the prices and create an emotional landscape that ultimately drives people to buy as close to the MCG as they can. Hmmm....counter-productive anyone?

In many of my posts I have already discussed why first home owners need to get their feet wet in the burbs. I still can not fathom how a first home owner, perhaps earning the average wage of 60K-ish, is looking at 400k+ homes. I still can not understand why people are so against driving an extra 20 minutes, or 4 or 5 train stops further from work, but are renting. When will common sence prevail. When will youngens realise that they can still buy a house, sub 200K even, just by moving an extra 200km away. Wow, two hours of driving to see mates etc (who rent by the way), to set you up with the "Australian Dream". Plus, has anyone heard of up-sizing? It's not rocket science... beggars can't be choosers.

Topsy turvy scenario this is.

Taking a hit or two from Mr Stevens...or is it?

2010-03-27T14:55:00.004+10:00

While it's old news that Glen has upped the anti once again for us investors with a 25 point interest rate rise, it won't be long before once again our heart breaks just a little bit more with news that our holding costs are going to go up again. It's interesting though, because either way, we win. If the rates do go up, it means the economy is going well and it justifies the rent rises that are looming for my poor tenants. If the rates stay low, it's easier to hold. It's win win and I LOVE IT! In fact, I want to give Glen a big hug, rub that shinny head and give him a kiss on the cheek, followed by getting taken away by security, because men kissing men is just not on in today's society. Or is it..???

Anyway, it appears that Glen has created a situation where we are all educated about why the bloody rates actually do go up and down. (I'll give you my simple explanation) We all know inflation is a bitch, so raising rates is good to counter that, and we know that lowering rates is a great way of boosting the economy if people decide to buy TEAC and Great Wall, instead of Panasonic and Audi. The RBA have to balance this situation.

Fortunately for us, as I mentioned before, we investors win win because people know house prices go up if rates go up, and hence renters know rent goes up as rates go up....in fact, let's just say as the RBA lifts rates, everything goes up, except inflation!!! Win for everyone. Except for renters.

If rates go down, we win because our cash flow gets a reprieve and renters "think" they have won because their rent isn't raised. But we all know they're losing. Sorry, renters are taking a bit of a battering in this post.

Ciao.

Hmmmm......

2010-03-26T20:17:00.003+10:00

This recently popped up on re.com.au

Are you thinking what I'm thinking? Probably not, but let's have a caption competition!!! Winner gets free website/blog/business plug in one of my blog posts!!!

A super bargain in Ferny Hills...

2010-03-06T17:03:00.003+10:00

This property is a genuine super dooper bargain. Actually, I'm going to recommend it to my brother and sister in law, so get in quick!!!

By CRICKEY, that's cheap!!!

2010-02-27T08:49:00.003+10:00

Thank you to Australian Real Estate for this list...as you know, I love cheap KFC and I love cheap houses.

Australia's Cheapest Suburbs

Watch out...the scary interest rate monster is hiding in the shadows...

2010-02-26T21:13:00.002+10:00

Us property investors have been a lucky bunch of late. It seems that due to the financial news/data coming out of the US, those awesome blokes at the reserve bank have wisely kept rates low, in line with nothing else but......the US data. That's right boys and girls, the interest rates have correlated nicely with the share market mumbo jumbo coming from America, and if nothing else, we can see that the current speculative flat period in shares (has lasted about a month now) has meant the RBA are going to keep rates low....you see, the recovery is not in full swing yet, some of the looming troublesome countries/markets around the world has many thinking twice that we are out of the red and here in Australia we can see that property data, as far as I can see, is reflecting this mentality. Property prices are still stagnant, it seems that getting them to move is a bit like getting Kevin Rudd's hair to move, but ladies and gentlemen, nothing we do will change that. So as Kevin's "hair" remains firmly rooted to his scalp, so have house prices remained exactly where they were, nationally at least, the change has been almost non-existent.

I hope that for a few more months the uncertainty continues. Yes, I know it's bad for business, but for us property investors, it's just that little bit more of a breathing space to sort things out, to take stock and to put in safeguards before the interest rate onslaught is upon us. Listen to the warning my fellow countrymen, keep an eye on the American sharemarket, the likeness to our interest rate rises is uncanny...

Until next time bros and sistassss...

To invest, or not to invest?

2010-02-21T09:51:00.002+10:00

More specifically, the question should be, invest in property alone, or diversify? Throughout the last 4 years or so since I began property investing, the returns have been good. I can't say great, because the 2008/2009 "slump" has put a bit of a dampener on things, but still, the value of our investments grew, albeit not as much as in 2006/2007, or the time period I like to call "the icing on the 2003 boom cake." So the current question circles in my mind, keeping me occupied, evaluating my financial position and thinking about what I should do next. After much much thinking, the answer has been shares and online savers. It's a bit of a no brainer, but I really had to re-calibrate my approach of "property only" after the last few years. So here I am, nicely tucking some bucks away into UBank, but also keeping an eye on the share market, some of those blue chips are starting to look tasty.

I think perhaps more importantly, I took stock of my portfolio. Although I was aware of the situation, I am now thinking I have to change the negative gearing situation. Yeah, sure, the capital is increasing and I'm "silently" making money, but my cash flow is taking a major hit. With interest rate rises almost a certainty (although we have heard that before), a few more hits to the cash bottom line, and things will get very interesting very quickly.

As such, I am looking to sell, and I am looking at offloading the poor performers, or, as I am increasingly noticing, my non-performers. I have two blocks of land, sitting idol, doing nothing, growing very slowly, but not making any major headway and definitely doing nothing for cash flow.

The situation has also opened my eye to doing things differently. Being a wage earner is fine, but it's not the way things should be. I absolutely love my day job, but it has strings attached...I HAVE to be there, I drive 25 minutes each way every day, I put in a few hours more than I really should. With a business, I can employ someone to be there, to do the work. With a business, I can look at data and make a difference to operations with cash benefits, at my job, there is no such thing. So, taking the Rich Dad, Poor Dad approach, I am going to start something new, something risky, but more importantly, something that will result in some learning.

Ciao for now...

Cash Flow Positive, or should I say "The Yeti???"

2010-01-28T21:48:00.005+10:00

Be on the lookout for a big, hairy beast, lurking in the bushes, very hard to spot and ultimately, very hard to convince people that you've found one. Yes, that's right, I'm talking about cash flow positive investment properties, the elusive beast that lurks in our suburbs, in the regional areas (the bush) and often disguised as something else.

Many many people are on the lookout, many many people troll through countless websites, newspapers, listening intently during IP convos (conversations), and ringing real estae agents feverously. There have been sightings, and in fact, towards the end of 2009, there were many, some even confirmed, but now once again, it is difficult to find these beasts. Perhaps a bit of KFC will lure the hairy ones out....

Good luck in the search....I'm looking, picking up the scent, looking for footprints, listening with sound enhancing devices...they MUST be out there!

New contender for cheapest house in Australia.

2010-01-25T18:47:00.002+10:00

For just $40,000, that's right, 40 thou, you could buy this house in Tasmania. Surely one of, if not THE cheapest houses in Australia at the moment.

I'm back...

2010-01-23T17:53:00.002+10:00

Property investing has taken a backward step for a while, as my wife and I welcomed our first little one into the world. It's interesting how perspectives change with some of live's important moments. A visit to see grandmas in Brisbane allowed my a chance to check out how the tenants are keeping my Ferny Hills property, a 3bedroom house, positioned ideally in the north-western Brisbane suburb.

Well, to be perfectly honest, it's sort of what I expected. From the outside, nothing had really changed, it's still a typical highset, leafy amongst other similar houses. On the inside however, it was a different story. There were holes in a few places, carpet in living room was virtually ruined, the main bedroom had a slight smell of cigarettes and the downstairs rumpus room was empty, but the storage room next to it was so chockas full of crap, I couldn't even get to the rear access door. It wasn't all bad though. The kitchen was neat, the pool (usually the bane of rentals) was kept absolutely spotless and the yard was kept neat. The little doggy that used to inhabit the place too was gone. So overall, I was.... neutral. I'm thinking of replacing the carpet for them, as a courtesy, especially for keeping the pool so neat, but I'll have to see if I have the funds first.

My main concern is if I have to put it on the market in a hurry. If this was the case, I'd have to spend a fair few thou, fixing up this and that, and, perhaps most importantly, getting the outside rendered. That would bring the place up a treat and no doubt we'd get a premium price. It lends itself so well for an extension, blocking in the carport to create a master (ensuited) retreat, and for an extension of a triple garage out the front. This would cost, let's say around $40,000, but would make the house 4 bedroom, double bathroom, triple garage, all integrated and rendered. I think it would add about $80,000 extra onto the selling price....sweeeet.

Oh well, only a dream for now...but you never know...

I've been watching the market intently over the last few weeks. Agents are calling me saying investors are getting busy, which is great for my properties that I want to sell. I am concerned about the prices though....there seems, and I repeat, seems, to be a great amount of low end listings. Is this a sign of investors offloading low end stock, or is it something else??? Something else disturbing....

Could this be cf+???

2010-01-05T17:58:00.003+10:00

Could this property be cash flow positive??? Listed for $180,000, could probably be had for much cheaper and only needs a handyman for a general "clean up" as far as I can see. It's in Ingham, North QLD, with all the pleasantries of a decent sized town, and only 1 hour to Townsville. Would probably rent for...$250/week???

Just some words on the site...

2010-01-01T09:24:00.005+10:00

Here are the common words on this blog so far...just thought it's worth a look...

I finally fixed the blog poll!!!

2010-01-01T08:36:00.002+10:00

I had been wondering for a while how to let people vote without a "sign up" until today, when I was getting frustrated that none of my *cough, cough* loyal readers have voted.

So, after about 5 minutes of searching, I found..http://www.blogpolls.com/

WOW! It's such an awesome tool...so easy to use and gives a great result.

SO, people out there, NO REASON NOW NOT TO VOTE!!!!

Ciao..

realestate.com.au just got more wicked!!!

2010-01-01T08:04:00.005+10:00

I'm sure some of you may have noticed the cool new functions that www.realestate.com.au have slowly rolled out over the past few months.

My favourite so far has to be the "reviews" section. Not only can I now read about the awesomeness of a town, but thanks to some realistic individuals, we can all find out about the crap side of things as well. Upon clicking on a listing, voile, the towns score, based on feedback, is revealed. You can then click the relevant links to see more, get into the nitty gritty of a suburb/town to get a REAL feel. For example, I LOVE Toowong, a smallish mainly university occupied suburb not far from St Lucia (Brisbane). I have been looking for units there, but upon reading the reviews, I was surprised to hear about how bad traffic had gotten recently, which I hadn't really thought of much. So in essence, it's a great tool, especially for investors.

On the flip side, this could mean the end of little towns. Why you ask? A lot of the little towns I have checked out have very unfavorable reviews, mainly of course because of a lack of jobs and/or facilities. This may, and I must stress, MAY, drop house values, reduce the attention of investors, put a negative on "spin," which the real estate so often rely on, etc. etc.

Let's hope this isn't the case and hope that we get balanced opinions...

Mildly funny...

2009-12-30T17:43:00.001+10:00

Thought I'd share...

http://www.somersoft.com/forums/showthread.php?t=58395

It's amusing...for a little while....It's tagged as "funny advertising", but in reality, it's just sort of funny.

A quick shout out to another one of my blogs...

2009-12-23T11:38:00.001+10:00

I have just started up another blog and thought you may be interested....1680by1050 is a collection of photography made by either myself or my wife, that is suitable for widescreen wallpapers. It is only amateur photography, but you never know, someone may see the hidden talent. Slowly, day by day, more and more photos will find their way onto the blog, who knows, maybe there's one you like???

Anyway, check it out at http://1680by1050.blogspot.com/

Ciao....

Cheap...

2009-12-19T10:42:00.003+10:00

This property is a bit of a bargain. Looks neat, low 400's and probably could get it even cheaper. Check it out..great part of Brissie...

Want cheap land???

2009-12-17T11:53:00.003+10:00

This 100 acre block is selling for $1400/acre!!!! This is definitely a go ahead area...if I had the cash I would have snapped this up ages ago...it's been on the market for a little while, I'm sure they're open to offers...

A few weeks later in investment land...

2009-12-17T11:35:00.003+10:00

Not a lot has happened in terms of my portfolio this past few weeks and it seems not a lot is happening across Australia, with loan approvals down and from my perspective, a lot of houses sitting idol. This begs the question, if, and I do mean, IF we have an interest rate rise in February/March, will property totally stall? It's possible....demand seems to have dropped, albeit I think on a psychological level more than anything.

I am now constantly thinking of downgrading my investments. At the moment, I am shelling out a fair amount of cash in meeting repayments, insurance costs, rates and the occasional maintenance on my IPs. I know, I know, it's negatively geared, but I'm starting to get a bit sick of it. In the 5 years or so since I started on this journey, at no time have I felt that my efforts are so worthless. At no time did I think of "offloading" property just to increase cash flow. Could it be me, have I changed? Have I listened to the media too much with the doom and gloom predictions? Yeah, sure, Brisbane seems to be going ahead, but my other investments, for example the one in Toowoomba that I am trying to sell, is static. The block of 28 acres I have 40 minutes form the Hobart CBD has not moved an inch since the GFC. I suppose I'm feeling a new feeling, a period of no growth, of uncertainty, except now with interest rate rises.

I have also noticed that I no longer have an urge to bring up the topic as much as I used to and people are not as interested to pick my brain about the topic. This is a good and a bad thing....I always get into the downward spiral of fighting mini battles with hypocritical people who don't invest and then continue on to tell me that houses are too expensive. On the other hand, I like discussing property investing with people because often I get a little insight into someone else's head, someone else's mindset about money and property.

Anyway, I hope everyone has a Merry Christmas and a Happy New Year, I have a little baby on the way, so I probably won't be posting as frequently as I have in the past...

Ciao...

OMG...rates are climbing faster than I thought..

2009-12-06T13:58:00.002+10:00

Before I could even finish my favourite 2 piece feed from KFC, interest rates have jumped by a MF HUGE 75 base points. The fact that rates are on the way up does not in itself pose a real issue for my portfolio, or the portfolios of most investors I assume, but the rate of the increases is alarming. Three consecutive rises, three more attempts to subdue the good old inflationary influences and already, people are beginning to question the market. Are we heading for a mini USA (dare I say it) "sub-prime-like" offloading? Possibly...I am looking at discounting one of my properties, just to free up some cash flow, but still....people are buying...the new trend feature on realestate.com.au (which as an investor I absolutely love) is showing increased interest in properties across Australia. So a dilemma....should I wait, with minimal cash flow, or discount and sell....just to have better SANF.

Meh...I'll leave the thinking till after Christmas I think....

I hate lazy REAL ESTATE AGENTS!

2009-12-04T20:05:00.003+10:00

This in-depth, thoughtful and utterly true title is brought to you by the letter AGENTS, and the number SUCK!!!

Because, seriously, it's hard to make a phone call for a few thousand dollars, or heaven forbid, a happy client, isn't it???

RANT OVER!!!

Hang on a sec, no it isn't...property managers are worse....FIX THE MAINTENANCE PROBLEMS YOU BLOODY LAZY OFFICE CHICKS!!!!

A quick self plug...

2009-11-25T19:41:00.002+10:00

Well, not a plug exactly..but if you want to get in my head (as I know you do), check out What Andy Likes

You may find something here that you like too....because I know I'm cool and after going to this site, you will also know that I'm cool and finally I will know that you know that I know that I'm cool.

Ciao...

Market news on the thin, and, property managers need to get a grip!

2009-11-21T09:37:00.005+10:00

Once again we can see the calm before the storm, as the media give property a bit of a breather before, no doubt, a full out attack at the next interest rate rises.

I've noticed a funny occurrence on www.realestate.com.au the other day. In one of the places I invest, in Queensland, when you search for property in the "City" part of the town, you only get a handful of properties. Not that there isn't a crap load for sale, but because of the boundaries as set by the website I presume. One of my properties that is on the market falls within this boundary and as such, I wonder how many searchers do find it. It is still getting a stead ten hits or so per day, but none the less, I asked the agent to change the search term to the towns name, rather than just "Atown City".

I am now going to have a good old whinge about property managers, just because some of the silly ones I have now, defy belief. I ask you PMs, what is your job? Why am I giving you 10% of the rent? Seriously...why? I would think that amongst your job description it would say "manage maintenance" and "good customer service". But NOOO, one of my places still has a wall leak, one that now has not been attended to for a few months. Come to think of it, I'm shooting off another email. And in another property, a slightly sagging section of ceiling, once again, nothing. Get a grip on reality, property "managers"!!! Get your shit together and DO YOUR JOB!!!!

Waiting, waiting, slowly de-hydrating....

2009-11-15T14:26:00.002+10:00

I don't know about the rest of you, but I hate waiting. Well, actually, come to think of it, I don't mind waiting, but waiting to hear news from an RE agent who I am about to hand thousands of dollars to just does not agree with my psyche. I mean, come on, a quick email once a week to let me know he still knows its on the market would just show me that he actually does want to sell it. I mean come on, he has sole agency, surely an email wouldn't hurt...or maybe it does hurt him, I don't know. Anyway, I would consider this bets practice and is in the REIQ learning modules, but alas, no email, no phone call and worst of all, no sold house...

Our own Forum...

2009-11-15T14:19:00.002+10:00

Just a quick reminder, we have our own forum at...

Property Forum

Although not very popular yet, I think over time we will slowly build a community of like-minded investors, home owners, KFC lovers, etc. etc.

Have a browse, please enter something (with a cherry on top)....

I would hate to see a forum die...sob, sob...

Start of November Ramblings....

2009-11-08T15:19:00.004+10:00

Real estate in Australia has come a long way this year. By this I am inferring that a lot of soul searching has occurred amongst investors, home owners and renters alike, a lot of "is grass greener on the other side" type of thinking. Should I buy a house at these low rates? What should I do with the spare cash I have available now that rates have dropped? Should I continue paying down my PPOR, or is now the time to jump onto the investment bandwagon? 2008-2009 has indeed been a turbulent time for us all and the head scratching no doubt will continue deep into 2010 and beyond. House prices this past year all of a sudden became a mystery, mainly due to stupid doom and gloom predictions and silly hype created by the media. It seems that, in some cases, nothing has happened. The "average" 300K-500K segment has remained solid, with some growth over the period, but this is coming off a very productive 2007 and was expected anyway. Those in the upper million/s certainly felt the pinch, but the bottom end of the market remained strong and performed well. My cheapest investment for example rose 16% from when I bought it last year (roughly), whereas my most expensive made a modest/crappy 1-2%.

A lot was learned in this period too, I myself am slowly becoming more and more aware of the impact of sentiment, of confidence, and the associated mindset of watching house values and rates go up and down. But it has been one hell of a ride. For the first time in my property investment life, I felt a strange sensation, something peculiar....I think people call it stress. Now, I'm not a stressful person, in fact I am the least stressed individual I know, but the looming rate rises and my purchases earlier this year are starting to create a little bit of, dare I say it, stress. The "sleep at night factor" or SANF as we like to refer to it in the heady world of investment circles, is slowly getting worse, although, I don't really have trouble sleeping, I guess it's more that it's in my mind. My SANF, or my stress, related from property investing, has just eased a little this past week and I think I will once again lull back into my usual care-free self once again.

So, are people worried about interest rates? Am I worried about interest rates? Yeah, of course we all are, it's not very nice watching your money fly away in interest, only to see SOME of it again at tax time, but for me, it's a little bit less of a problem, for the time being.

On a bit of a side note, I wonder what the Australian market has in store in the next five years. I have now been investing for 5 years and during this time have seen, a slump after a boom, a slow mini boom and then a larger steady boom, followed by a stagnant period. I have made SOME money, not as much as I would have liked (has anyone?) and have learned a hell of a lot. What will the next 5 years bring? Will it be fortune? Will we see 50% increase in prices during this time? Will the average cost of a house in Brisbane break the 500K???? It's all possible, it's all ahead of us and most importantly, I'm in it. If you're not in it (property investing) you'll watch from the sidelines, probably complain that they're too expensive already and that you're waiting until they become cheaper. I laugh at you...I laugh at you heartily....

Predicting the unpredictable...

2009-11-08T11:43:00.003+10:00

Trying to predict the future is futile. I was looking forward to steady growth in 08/09 across my portfolio, and instead one property increased roughly 16% (I consider not bad for 1 year), and the other at 6% (quite crappy really). Another one of mine has gone backwards. It's simply silly to say "the Australian market will do this and this, then this...etc" because there are too many sub-markets. FHB, investors, the mega-rich, the mega poor, renters, executive renters, migrants, the job market and real estate agents all influence the sub-markets and at different rates in different markets. As we all just saw, the higher end suffered, the lower end has done well, the middle is on the way now....

I could theoretically predict a 40% across the board drop, or a 15% annual rise and then predict that its basically unpredictable...

I tend to think historical data is a good indicator, but as we all know, the future is unwritten....

Another bargain in Toowoomba...

2009-11-08T11:27:00.002+10:00

UPDATE: Finally SOLD on the 23rd of October...

I don't know why this place is being over looked. I would have snapped it up very quickly if I had the equity. Oh well, some lucky bugger will get to invest in mixed residential/commercial....

Ha ha ha....

2009-10-28T17:24:00.001+10:00

One of my babies is for sale...

2009-10-26T17:08:00.004+10:00

Well, here she is, ready for the market. At $285,000, I think someone will get an absolute bargain here for a very, very well positioned property. 3 bedroom, looks shpick and shpam inside and out and with the powered double garage out the back on a decent block, you can't go wrong. Toowoomba will always have a strong rental market.

Check out the location on Google Maps here.

Cheap Queensland towns....

2009-10-20T17:24:00.001+10:00

Someone on my favourite Somersoft forum recently bought up this topic. Below are the top ten cheapest suburbs in QLD...the red is my opinion:

Charleville: $140,000 Far removed from a lot of places.

Tara: $151,000 Possibly the worst socio-economic town in QLD

Gayndah: $155,000 Meh...

Mount Morgan: $160,000 Meh now...

St George: $187,250 From what I hear....dump.

Rockhampton City: $195,000 I don't know why Rocky is so cheap.

Harlaxton: $215,000 ???

Oakey: $216,750 Undervalued, being so close to Toowoomba.

Home Hill: $219,500 Needs more infrastructure.

Stanthorpe: $225,000 I'm biased, but I like this town.

Are investors back?

2009-10-17T16:44:00.003+10:00

a turbulent month folks we have had. Apart from me starting this post with Yoda speak, the Reserve Bank, or as I like to call it, GOD, has not only began lifting the reserve rate, but is warning of a volatile year ahead with as much as 5 consecutive rises in the next 6 months if you believe some of the media reports. This is not new news though. GOD has warned people not to be too greedy, to take it easy, but no, just like Adam, many people were not listening. I for one. So now I'm in a pickle of some sort, having to sell at least one property before the repayments get out of control and I'm left eating tripe, which, as I'm sure many of you know, is a bargain for only $7/kg from Woolies.

Saying this, I would surely love to keep all my properties, since all signs are pointing to a boom, or more realistically, a tiny spark compared to what we have enjoyed for soooo long. I mean people are getting all too excited over a 20% increase in three years, as has been reported for Sydney, and a 10-15% for most of Australia. But come on, 3 years? My first IP bought in 2004 went up approximately 80% in three years, and that was bought immediately after the all so sweet 2003 price sillyness. The market seems similar to back then, especially in Brisbane. A lot of houses on the market, at cheapish prices in the middle ring and quite a few bargains in the outer ring right now. It was similar in 2004, it's just that we were young and naive, thinking it was going to be really hard to pay back a $172,000 loan, instead of picking up a massive bargain int he mid 200s. We have learned now though, that the Brisbane "rings" behave in a very funny way. In my opinion, the inner ring does not start the price jumps anymore, since it's so over heated. No, the price rises now begin in the middle ring, the typical leafy suburbs of Indooroopilly and Corinda, and up towards the Grange, this are the real indicators, the real kings of property booms in Brisvegas. And right now, these are the type of suburbs that the first home owners have began devouring and, investors are starting to play here too.

Anyway, if you're interested in a property in Toowoomba or Launceston, send me an email.

Ciao

A bargain - Toowoomba

2009-10-14T16:14:00.004+10:00

This property is a bargain. At first, I didn't think much of it, but on second inspection this property is a good buy in my opinion. 4 bedroom means it will always be rented, it has a patio thingy out the back, is a bit of a blank canvas in the backyard and Harristown is an OK part of Toowoomba. Come to think of it, I often wonder why this awesome largeish regional centre is not worth more. I think it's due for a price correction....

Cheap Land close to Hobart!

2009-10-13T07:14:00.003+10:00

This 10 acre block is a bargain for $70,000 (listed price) and no doubt you may be able to knock off a few more thousand since it's been on the market for a little while. It's only a 30-40 minute drive from the CBD (depending on your driving style and aggression on the trip) and New Norfolk is a beautiful small town growing into a "satellite" town of Hobart. There's a Woolworths there already and that lovely small town feel....check out the view you would wake up to every morning.

Bugger...it has begun!!!! October, 2009. The month the rates began making a smiley face.

2009-10-10T14:17:00.005+10:00

The talk about interest rate rises is no longer idle chit chat, as, I'm sure all of you are aware, a 25 point rise has finally occurred. AND it appears we are going to very quickly head back towards the heady days of the average mortgage being in the 7-8% range.

Now is the time to watch the market. What will happen, especially after the next rise? I predict that all of a sudden the market will be flooded with "investor offloads", followed closely (in about a year) with the "ops, I'm in too deep" first home buyers exodus.

So lets stay tuned. Lets once again tune our ears to the hype that will be created by the media, by real estate agents, by society. I can hear them now...."ha ha, told you house prices drop." Luckily, they will be from renters. Unluckily, they are going to find an increase in their weekly rent. :)

I love real estate agents with a sense of humor...

2009-10-02T20:27:00.002+10:00

This wonderful ad recently hit re.com...I love it!!! Original, funny and best of all, probably true!!!

Hmm, come to think of it, here are a few more they could use, surely it will result in a sale:

"Motivated vendor is going bankrupt!!!"

"I've deliberately inflated the price, so you can put in a realistic offer!"

"Make sure you put a building inspection clause on this one!"

"Contract fell through after buyer realised this house is a pile of shit!"

You try....it's easy!!! :P

Property news a bit quiet....

2009-09-22T11:52:00.005+10:00

Don't know about you, but news regarding property has become repetitive nonsensical (is that a word? Spellcheck says yes) rubbish, that, in real terms, tells us nothing about the state of the market.

I was having a chat with my mum and the topic of becoming a real estate agent came up again. Why should I become a real estate agent??? Well, the money is certainly good if you can talk the talk and don't mind wearing a suit in 40 degree temperature, but if you're like me and prefer to sweat in only boardies and a singlet then I suppose it may not be the job for you. However, there are a lot of these gentlemen and ladies trying to flog off overvalued property, sometimes I feel sorry for them, sometimes I want to play with their minds...you know, just because I can, making serious doe.

The money is certainly very good. Successful agents do well, 150K plus easy, but I bet for every one of these successful BMW drivers, there is a poor struggling agent out there as well, making ends meet to pay the bills and working his/her arse off.

I say good luck to these agents, I hope you don't get too many people playing with your minds...

In other news, I am going to sell a house in Toowoomba. I feel I need an "insurance buffer" for when the rates start to climb, which, like lotto numbers, are near impossible to predict. I will say that I believe it will happen early 2010, possibly February or March, after the Christmas and New Year rush has further restored our economic growth.

Till next time....have fun with your investments...do something nice for your tenants, send them a thank you card for not growing marijuana in your spare third bedroom.

LOL

2009-09-05T08:04:00.002+10:00

Thank you to failblog...

Market Wrap August!

2009-09-04T15:30:00.002+10:00

Well, another turbulent month has past with not much happening in my real estate circle, but apparently quite a lot is happening around Australia, especially West Sydney and Melbourne, two places which have figured quite prominently in the national media. We all know Sydney has had a bit of a slump of recent years, and Melbourne, especially around the CBD, has been quite stagnant. The rest of Australia seems to have been forgotten, in terms of media coverage anyway.

We are continually being reminded of the looming interest rate rises. There has been all sorts of outlandish claims, such as a recent one that claims we need a 2% adjustment within the next 18 months. I for one think this is just crap media hype. I mean seriously, the indicators are not looking too good for interest rate hikes. Yes, Mr Swan was creaming at the 0.6% growth of our economy, but seriously, unemployment rates are still on the up, the world economy is staying relatively stable (slowly coming out of it's slump) and inflation is rather low from what I hear. These factors ad up to the reserve bank rate being kept low, but sooner or later, the recovery will be lead by IR increases by the banks.

Now, this is going to hurt a lot of people, let's not kid ourselves about that, and I may even be one of them! But surely, we all have contingency plans in place, investors are looking for avenues for survival and we will march on, albeit in a drunken knock-to-the-head state.

I for one am getting prepared, at least mentally, to the interest rate rises eating into my disposable income and me having to live on rice and tea. Not yet, but soon my friends, soon this WILL happen. I've been there before....it's not pretty. For now, I shall enjoy my caviar...

I feel false positivity....still, it's positivity.

2009-08-29T11:45:00.003+10:00

Well after the last few weeks I have become more and more confused by, what else, but the lovely media reporting an overwhelming number of positive news about property prices. While this in essence is fine and is finally showing a leaning towards positives rather than doom and gloom, there is one eency weency tincy little problem. I am STILL NOT SEEING IT!!!! The Brisbane suburb that I watch (where I have an IP) called Ferny Hills, as well as Ingham in North Queensland, where I live, property is ticking along.....stable, not earth shattering, not idle, just moving.

What I am noticing is the number of stock coming on the market. In Ferny Hills for example, A LOT of houses are coming on the market and are hanging around for a while. They are your typical, highset built in underneath neat 3brm base stock houses. This is unfortunately doing something to our market, it's keeping it low. These are the entry properties, people flogging off stock, it's not the type of properties that are overpriced, the type that usually drive up the suburb profile.

I can conclude two things form this scenario. Either people are seeing this as an opportunity to get out, in fear of the interest rate rises, OR, investors/owners are ready to upgrade and are flogging off stock to open up cash for upgrading. For months, hardly any activity and now, it's all on all of a sudden. I hope this scenario is not being repeated around Australia, as I see it as detrimental to future prices. What I do like though, is how neat these places are inside, it's quality lower end stock.

Ingham, while being a very different market is doing a similar thing. Lots of lower end stock available, quality a bit low but acceptable, but there is also a small section of expensive, overpriced houses that are being listed. This gives me hope.

So yes, while the long term does indeed look rosy for investors/home owners, currently I wonder whether the interest rate rises we are heading towards are keeping prices low. Oh well, back to my ponderings....

Real Estate, Hot Chick, Crap Music...

2009-08-22T08:07:00.003+10:00

Selling property is akin to selling chicken. Just dress it up, make it tasty and BAM, it will be sold (KFC has been doing it for years and I believe, so has Ray White).

SO it comes as no surprise that a new apartment block in Melbourne, very originally called "Melburnian", has created a short video to sell these nice new units. Here is the video:

Nice place, hot chick, absolutely atrocious, rip out my eardrums, crappy background music.

But yeah, nice chick....

Twister Wrap, ops, I mean Market Wrap for mid August.

2009-08-16T08:08:00.005+10:00

Welcome Ladies and Gentlemen!!! Welcome to Friday Fight Night!!! In the red corner tonight we have The Investors. They have come off a loss in their last round, suffering a defeat by technical knockout from the Global Financial Crisis, but they come prepared and battle-hardened ready for this bout. Property Investors have had a 30-2 win/loss up until recently and the latest loss came as a bit of a surprise. There were good signs early on with dropping interest rates, but they took a beating towards the end of the bout.

In the blue corner, we have The Media, with a current winning streak of 4 straight fights, first with a points decision against Un-affordability, then the second round shock knockout with the Global Financial Crisis. The First Home Buyers Boom was a low key affair easy win and just recently, the Turmoil In The Market was disposed of with a few low punches below the belt.

LET'S GET REEEADY TO RUUUUUMMMMMMBBLLLEEEE!

This bout will definitely be one to watch Ladies and Gentlemen. The media has now picked up on the potential for a lot of recent buyers to end up in financial turmoil with the inevitable raising of the interest rates by the RBA in the next two years or so. This will spook a lot of buyers and investors, it's definitely spooked me a little bit at the moment. However, the big question is, how will this constant barrage of negative doom and gloom news from the media impact on current house prices? Just when confidence was returning, once again here we are, getting cut down, letting us know of potential potholes in the road ahead.

It's funny how the media has reacted. They swing very quickly these days between positive, confidence inspiring news, and the doom and gloom negativity. I suppose it's what sells newspapers and gets website clicks, but the question is, how much truth is there to all of this sensationalised market coverage? I will leave that up to your imagination, but what I will say, is that the property market will be in turmoil for a good while yet and the media will continue to let us know about it, you know, just to keep us on the edge of our seats...

I've been banging on about this for ages....

2009-08-12T17:24:00.002+10:00

This blog post is extraordinary!!! Wow, it's like my eyes have just opened. Are you telling me, that I need to buy property to become a property investor??? Whoooar...groundbreaking. :) Well done...Mr Common Sense has prevailed again!!!

I call a pile of shit!

2009-08-11T21:31:00.003+10:00

This blog article is a bunch of crap. Not the article itself, but the "professor" making stupid statements. Seriously, "...he puts the increase in median house prices over the past two months was likely due to a reduction in listings creating competition rather than an increase in buyers..."

Ha ha ha...that's like saying, share prices have dropped because there are less shares to buy. Wow, makes me think I could be a professor too....

Something interesting for us all...

2009-08-09T09:58:00.005+10:00

If you're like me, you like KFC. But if you're also like me, you will also like numbers. This may be handy for some of you:

Except for that one Sydney suburb for units, this shows how difficult it is to acquire positive geared IPs in inner rings of the major three...

For all of the capitals, click here.

Dammit!!!

2009-08-09T08:41:00.006+10:00

The media has found cheap houses. Queenstown, in Tasmania, has long been my dream investment town and now it appears the prices will begin to climb again.

Yes, it is miserably cold, rainy and I would have to assume, very low socio economic, but then so is England. Still, this sleepy little town on the somewhat remote west coast of Tasmania provides some of the cheapest investment properties you can buy in a town. It has all the facilities, it's on the major tourist route for the apple isle, and the town will not disappear, it simply can't with that numerous residential properties there, a new hospital etc. etc. This town is my next target for investing. Maybe, just maybe, I can begin a movement to make this little town a gem.

North Brisbane bargains have me worried...

2009-08-07T17:07:00.003+10:00

For a while now, I have kept a keen eye on the North-Western Brisbane corridor. You know the one, starting at The Gap, heading towards Ennogra, up towards Ferny Hills and Ferny Grove, and leading into the mountainous backdrop, what I like to call motorcycle heaven. But I'm not here to talk about bikes (although I would love to blog about my love affair with my Ducati, but that's for another time), I am here, sitting in a slight panic at seeing property such as this.

It;s listed for 399K, has had over 2000 views at realestate.com.au and is still not selling.

This is alarming. On a more personal note, it's very alarming for me. Yes, it has a very steep driveway, it needs updates here and there and it is weatherboard. But by now, in the current market, this should have been snapped up for around $380K-ish, someone should be ripping up the old steps at the front and making it into an excellent rental or PPOR. But no, this is not the case. In fact, there are numerous examples of absolute middle market bargains right now. Houses in this price range are taking a bit of a hit, and it's evident here.

I own a house in this corridor and it's valued more than this one, but the market stalemate means my equity is not growing. My hard earned cash is going to the bank for no other reason than to wait for the price or rental income to go up. So yeah, I'm slightly worried. Some of you may be thinking, just sell with that mentality, but I'm going to hang in there. It's the same feeling when I bought my first house in 2004. Flat prices after the boom in the Logan area. House prices were going nowhere for quite a while. BUT, I stuck it out then and will do it again here. The only way is up...or across. Hopefully up.

A quality agent...

2009-08-05T21:07:00.002+10:00

Back a while ago, in 2007 to be exact, I met the epitome of awesomeness that is a real estate agent. His name was Ian Knight and the agency was RE/MAX Toowoomba. Since my interaction with Ian and the team, I have never even come close to experiencing professionalism like I did back all those years ago (well, in fact it was only in 2007, but, hey, it's a lifetime ago). The funny thing was you see, is that the sale didn't even go through, but that brief afternoon has stayed with me for a while. No bullshit, no mucking around, working for the buyer and the seller, true real estateism. Unfortunately, there are very very ugly agents out there, and I don't mean the colour of their lippy, or the shitty power dress or 100 dollar suit. I'm talking about the stupid unnecessary mind games, the "I'll just ring the seller" shit, that is totally pointless and utterly fake. The crappy sales pitches, the bullshitting queens and kings that unfortunately make up the majority of the real estate world.

Just in case you are wondering, I am certain Ian and his team would have no idea I am writing this, as, like I said, it was just a brief afternoon where business was done. So I say congratulations, let's hope there are more Ians out there, giving RE a good name, instead of the shit kicking, bullcrap we so often have to put up with.

Have you had a quality experience with an agent? Let us know...

The Brisbane Property Market...July Comments.

2009-07-28T20:18:00.003+10:00

Well, after months and months of continued searching, I am finally seeing a bit of movement in the Brisbane property market. It's not a huge wave, in fact it's probably more of a ripple, but at least it's there. This will have wide ramifications for the property market, especially the outlying first home owner suburbs. Bargains are still to be had.....500-600K will buy you a nice place near the city, and virtually a castle on the outskirts.

It appears a lot of people are saying Sydney is due to begin the new boom, but I see no reason why Brisbane can't be the city that drives the next boom, or mini boom at least. The indicators are clear, outer suburbs are being bought, inner suburbs are still relatively flat (my feeling based on my research) and this is going to result in an outer ring push which will increase inner ring prices. Usually, as I am led to believe, it's the inner ring that goes first, followed by the ripple outwards, but Mr Rudd's FHB boost has changed the scenery.

Melbourne seems to be on everyone's lips, a lot of chat on SS about it's suburbs. While Melbourne is indeed an attractive market, it is still way over priced compared to Brisbane or Adelaide. All of these markets need to cool first, in the next three months, and then KAPPPOOW, it should all take off again...I think starting with Brisbane.

Google Real Estate = GOLD = mini review

2009-07-27T23:49:00.004+10:00

Google Real Estate is an awesome new product from Google that I have had a little time to play with and I can safely say that you will like it a lot.... It has been done before, but this website brings together the less obscure RE sites and should challenge RE.com.au for usability. It was a little slow for me, but overall, there is added functionality that I have not seen on other sites before. For example, if you scroll to a new location on the map, it will re-calibrate and give you properties in that area, which, in my books, is awesome. There are bargains that you don't see on the major two, which is also handy. For example, I just found beach side land for $200,000ish!!!! Gold! Shame I can't afford it right now.

As with most of Google's products, this one can still be improved, so let's hope there is a little team of monkeys somewhere working on improving this even further (PS. I love all Google monkeys, ops I mean employees, you're doing a great job). I would like to see the properties being able to be sorted by price etc. on the left hand side. The map could differentiate between houses, units, land with different colours, etc. etc. etc. Are you listening google?I have heaps more ideas too. I'll come and work for you for under $100,000 AUD. :)

Have fun with it everyone, I did...

New look....

2009-07-26T11:46:00.003+10:00

Hello all,

Well, I was getting a little bored of the old "thin" style, so I did a bit of research and have now widened the part that you are reading now AND changes the template colours. What do you think? I quite like this design, I am working on a new header graphic. Any ideas/feedback welcomed...

In other news, I am getting excited about moving into our new PPOR, but by golly, there is a lot of work to do first. Luckily, KFC is not too far away for those well earned procrastination times. The garden is looking inviting too, with those weeds looking scared at the thought of being yanked out of their homes, and the plants I can tell, are just oozing with anticipation at having their feet covered in newspaper and mulch. Can't wait....