Infinite Wealth, house and land ?

Investoradam how did you go about purchasing your second property in Brisbane? You do it alone or did you get the guidance from a third party? I take it that was house and land package with your indication with the property due to be finished ?

 

Shogun thanks for the link but I’m not looking for a property that old because Maintenace cost will be considerably high due to the age of the dwelling. Also I want to build a vast asset base to produce good equity before buying a property to subdivide and then I will have the funds to sustain that kind of dwelling and the deposit to develope and subdivide the land.

 

Maintenance cost on this will be high, not the one in that link .




I think you need to challenge what you know about RE investing, then learn a whole new set of principles.

 

I am new to investing and I’m looking to learn and absorb as much information as possible. If I purchased a property like this, what kind of maintenance cost would I be looking at to maintain this dwelling ?
The dwelling is 43 years old there could be a number of issues with this property but would only know on further inspection.

 

What you dont understand is the issues new properties have. How do you know that the roof doesnt leak? In a new house you have to wait till it rains. In an older house if there is no damp or water damage you can be pretty sure it doesnt leak.

Cosmetic issues like old paint is cheap to fix. Bad foundations or waterproofing, on the other hand......

 

At under $600 a m2 it is a well priced block with a free house. I am not saying buy this one but just an example of what I have learnt off here to look for.

I would be more worried about building issues and warranty problems with a "cheap" developer built house.

I paid $150 to have a spout replaced above a bath because I was away, yet I replaced a shower head for $20

Google suggests allow 1% of property value per year. Depending if you pay for work or diy I can see that number over a long period of time. $1000+ hot water systems tend to fail past 10 years etc. Same with older air cons. Minor plumbing issues is common for me, the occasional door or window lock. Minor electrical issues replace RCD or smoke detector both $100 to $150 each

 

Didnt catch you early enough before getting brainwashed by spruikers. (Sigh)

 

Trainee personal question how Long have you been investing if you don’t mind me asking?

Looks like I have my principles all wrong could you please give me some direction to correct these wrongs? i.e. books to read, podcasts to listen, investment magazines etc

A lot of research i’m doing is contradicting, investors saying new dwellings are the way forward for tax purposes and maintenance cost its the best strategy. Then I read to buy established property under market median value with potential gentrification is the better strategy ? But everybody has the own preferred opinion.

 

You headed in one direction after talking to a marketing guy and now doubt yourself because of an anonymous internet forum. Think about that. You think its contradicting because you are treating all sources equally.

You have to decide for yourself whether you agree with the following. All are opinions and nothing is advice.

Land appreciates, buildings depreciate.

New house: more depreciation (you pay for it in the price) but lower repairs. Higher risk of structural problems you cant see, low land content in price, if new estate lots of competition.

Old house: less depreciation and higher repairs but lower chance of build issues. More chance of future value in development etc. think selling to a developer.

Infinite exceptions to the above. Some areas only have units. In a rising market otp and house and land can be great. Gentrification might not happen. Old houses can have real structural problems.

Its your money.

 

Assuming new dwellings have no maintenance issues ( unlikely) , what you need to realise is youll be paying a premium for new stock, often a big one. Much more than the general maintenance of older dwellings . I have many established ips and i generally only have the odd small thing to fix. Occasionally you get the more expensive issue but its not everyday. Besides that , there are a list of other reasons . Do more research . Also you mentioned tax. You never want tax benefits to guide/determine what you buy. Ever.

And yes you're right . Everybody and his dog out there has an opinion but very few are able to build large portfolios .

Also right now you're a spruiker/otp agent/developer's dream and on their wish list for xmas.

You need to have a much broader perspective before you formulate a plan imo.

Buy Yardney, Lomas, Do books. Expand your overall knowledge. Give yourself at least 3 months .

 

@TheNewGuy just an observation if I may. I am a older retired person on this site who has owned a few properties in the past and still own a few but no longer see myself as an active investor. When listening to people you are talking to remember to understand their motivation. Do they have any? In particular are they selling you something? The people on this site give free real life personal experiences, theirs is not advice. I wish I could have had access to a group like this when my investment journey started many years ago. I wish you well in what ever you choose.

 

Sackie Thank you for your advice. I’m glad I’ve come to this forum and asked the questions I have. I won’t be sigining anything from infinite wealth. When I made the decision to start investing in real estate I never thought of buying off the plan. But after an infinte wealth seminar and a few follow up meeting, they nearly had me with all depreciation tax saving benefits low maintenance cost. So glad they haven’t head back in the books to broaden my perspective.

 

Saved in time

 

Yeah I did the basic house and land package due to low on going maintenance costs!
I’m originally from Brisbane and know the lay out rather well. But also spoke with so called property gurus

The property came with a 16 week guarantee build time & so far on schedule!

As time consuming as it may seem, just read up,listen to pod casts and chat to as many gurus as you can! Some are genuine and almost are full of crap!
IMO those one stop shops with the same plan for all are the last places you should be going to

 

@TheNewGuy Let me be a cautionary tale for you (sort of). About 10 years ago I bought two newish properties (the spruikers used to refer to them in those days as "dripping with depreciation"). Not that I found them through a spruiker.
Because I thought they were all I could afford to hold, not having a high salary, I hoped that eventually they would have capital growth. Now yes, they finally have, but old hands here will know what I mean when I say they're in Melton West and Mildura, and on blocks about 350 sqm.
On the one hand, without the negative gearing I couldn't really have held any property at all, and therefore I certainly have gained about $100k in equity in each of them without paying any of the principal down. I was sending my daughter to a $20k pa school at the time.
Now that I'm on this forum (learning, learning) I do often wish I had tried that bit harder at the time of purchase to find the perfect property. I had read every Lomas book and I knew the importance of identifying a property that had both CG and cash flow. I just gave up on finding both together.

And settled for the cash flow. That has meant I have never at any time had to consider selling my properties. But because I am now 60, I may not be getting any more properties. So I think I wish I had been on here earlier and got these people's advice on particular properties, and got more motivated to get CG ones. If you've read til here you deserve a medal and I can't even remember what point I set out to make!
Best of luck - you're certainly starting out well.

 

You should run real estate seminars

 

Thanks to everyone on this feed for your information. I’m going to keep in mind all the information I have read and start by doing more research and reading. Then start my search for an established property in a good location with the potential of good capital growth in a shorter time then buying a off the plan property miles away from the CBD.

 

As others have pointed out there is no need to build a vast asset base to produce good equity or to even wait to buy a property to subdivide.
Gone as the days of being able to have vast asset bases due to lending changes anyway.
Providing your first development isn't a 10 storey, 40 apartment block then there is no reason why you can make your first foray into investing be a very simple development. It is riskier than a normal IP but probably less risky than buying in Alkimos

Some good authors to add to the reading list
Ron Forleee
Margaret Lomas
Ben Kingsley
Steve McKnight

They will all have different takes on the right answer and many books are out of date as soon as they are printed but the idea is to make you think about the different options and decide which might be best for you. In such fast moving/changing banking policy times many books about buying fast and hard are now a pipe dream for many.

 

What a 180 from your first post and hugely in the right direction now .