Status Updates From 30 Properties Before 30: Ho...

MANAGEMENT

Property managers; don’t micromanage them. Rather spend time finding another best deal
- handle rents, tenancy issues, maintenance, repairs/replacements, finances/records, insurances, rental increases

Tax deductions: claim with proof of payment
- loan interest, ALL rental related expenses (event agents), depreciation, quantity surveyor, accountant, bank charge, admin costs

The larger yr portfolio, the harder to get loans

Even if seller contacts you directly, try to negotiate through agent

Start close with final expectations so you can walk away easily too

If offer is accepted, organize pest &building inspection AND loans

After settlement, find tenants

Motivated sellers: Death divorce debt (or financial hardship) deadline distance disaster

Ask:
why is the vendor selling
Have they purchased another property
What settlement terms are preferred
How long have they owned it
Is it an investment or owner occupied
Is it tenanted
Have they had any offers
How long has it been on the market
Is the vendor testing the market

Process of buying a property

1. Your conveyancer
2. Offer process: give and take
- private sales: agent -> vendor
Try to be the first person to offer and set up negotiations so you have the last eight of reply with the agent. 48h limit on negotiation
- auctions: check laws if you can make offers before the auction date; sign immediately after the auction. Negotiate on settlement date

Cycle matters but holding onto it long-term would still give you profits

Factors that affect the property price
Location
supply/demand
interest rates
Economic outlook
Its market performance
Population/demographics
Size/facilities
Ex/internal aesthetics
Renovation potential

Low recent growth: avoid buying at peak
Low SOM
Low vacancy rate
High rental yield
Forecast demand/supply

Buyer agent 1.5-2% of price

Care about experiences of the professionals you are dealing with: accountants, bank, agents. Are they personally owning properties?

Fixed vs variable interest
Redraw facilities vs offset accounts
Principal+int vs interest only

Buying with trust / business name is different to obtain finance

Buying newish property at a good price would have advantages in depreciation tax

LONG-TERM GAIN MINDSET

Diversify across regions/tenants

For yr first 6 properties: under market value, capital growth, higher yields

End goals for next 10yr: to generate a passive income of $$, how many properties would you need?

And how long is the timeline to achieve it: 7-10yr recommended

Rent vesting recommended / joint venture not recommended

Strategies

Buy residential properties in a growth area that are under market value and have high yields (yield = borrowing capacity for the next).
= affordable metro properties in the outer/inner rings of major cities

You should not hope for going it up but know from day 1 that it is worth more

Compound growth with multiple properties + remember the triangle in the diagrams

“EQUITY GROWTH AND CASH FLOW”

NOT RECOMMENDED

Flipping houses, Build new, Buy-Subdivide-Sell, build Granny flats, Wrapping properties (wrapping interests), Commercial real estate (higher tax, more deposits)

Many fall in love with the idea of getting their hands dirty and building something from scratch. Unfortunately, when it’s complete, the numbers don’t add up.

Don’t chase short-term gain over long-term one.

Property vs stocks

Property will always be worth sth; never drops to zero

You can leverage easily with 5-10% of deposits and having it owned and you can use the equity for the next property. If if you have a mortgage someone is paying it for you = work smarter

Meanwhile passive income from stocks will be only 5-10% or have to put 1M to make 50-100k yearly

But maintenance fee and saving the first deposit

2nd rate agencies tend to post some inaccurate ads and it’s listed too low or high and that’s the opportunity

Many agents tend to upload new listings at night

Do whatever you can to boost yr income if yr serious about investing

Owners with financial issues or divorce issues -> might be in rush for selling

Don’t wait long to buy the next property

In real estate, how you look is extremely important

CMA,appraise properties, Full vs drive-by evaluation

better loan terms if LVR is <80%

Suburbs where price is lower than median but avg yields is above 7%

Make more sense to build portfolio from cash flow positive/neutral than negative gearing

If it’s interest only loan, onsider increasing rent during the period