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What you drive and what your tenant drives?

Discussion in 'Investor Psychology' started by legallyblonde, 6th Jul, 2015.

  1. legallyblonde

    legallyblonde Well-Known Member

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    I drive a '98 Corolla which cost $4,900 three years ago with low k's.

    I was surprised when I held my first open home for IP1 that every single potential tenant drove a nicer/newer car than me!

    Is anybody else in this same boat? My current tenants car is a Toyota and looks like a very late model.
     
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  2. wylie

    wylie Moderator Staff Member

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    We didn't buy a "new" car until about 12 years ago and it was a demo model, so not quite "brand new" but much better than the run of cars we had when we were building up assets and/or a one income family with three little kids.

    So... yes, the tenants always had better cars than us. What I found interesting also was that as we bought old queenslanders, we would do the initial work that was cheap, ie.rip up horrid carpet. I recall very well one house we couldn't afford a floor sand, so we recoated what had been the original "japanned" finish. We bought clear estapol product and tinted it black and coated the floor. It looked so much better but we knew we would pay for it at the other end when we could afford to have it done professionally. He clogged up so many sanding sheets that it did cost us more than it should, but we had no choice back then but to do the cheap version.

    I also recall that same house, being in the living room in paint spattered clothes, finishing off the painting and a potential tenant coming through the open house and looking at me like I was a fly under glass :D.

    As the houses got better between tenants, as we put in nicer kitchens and bathrooms, I had to dress up a bit more for fear they would think they were renting from ferals :p.
     
  3. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    My landlord changes between a beat up old van and a newish Merc, depending on maintenance or just inspection.

    I have a 2011 Citroen DS3.

    New car prices have come down. Used car prices have come down. Company cars are relatively common.

    I think you are pretty shallow if you are trying to get sense of self satisfaction based on reverse snobbery.
     
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  4. legallyblonde

    legallyblonde Well-Known Member

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    Not at all... It is just something that I have been thinking about given all of the media attention surrounding my generation not being able to afford houses... Just a discussion around what people choose to spend money on. To me... When you are starting out you should drive the cheapest most reliable car available and save for home ownership (assuming that is something you are wanting).
     
  5. freyja

    freyja Well-Known Member

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    I have no idea what my tenant drives. Maybe my PM would have an idea though...
     
  6. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Replacing my car would cost me under $2k. I don't know if any of my tenants drive, but 1 month of any of their rent is worth more than my car.
     
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  7. legallyblonde

    legallyblonde Well-Known Member

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    I admit I parked my car up the road (because it is 'old') and I asked my mum to park her Lexus behind it (too new)!!! I don't want to look too rich or too poor! I admit that I wore my work clothes to the inspection to make sure I looked professional (I was 24)! Thankfully my tenants are younger than me! So it makes them good 'training tenants'... Steep learning curve ;)
     
  8. D.T.

    D.T. Adelaide Property Manager Business Member

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    Who cares?
     
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  9. legallyblonde

    legallyblonde Well-Known Member

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    I hear that property managers take note of tenants cars to see how they look e.g. if it looks well cared for or overly beaten up!

    Love it!!!
    Me?? I am just curious... As discussed above I find the debate around 'poor tenants unable to afford homes' interesting.
     
  10. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    I judge myself on my own success. Not constantly peering around to see what someone else may or may not be doing.

    The "tenant with a shiny BMW" might well have been me - I bought one for 5k, spent 2k fixing it up, spent a weekend detailing it, sold it for 12k 2 years later. The person with the beat up old bomb might have 20mill in assets. The person with a near new Commodore V8 may have it as a company car. The P plater with a new Corolla might have been given it by parents who wanted to see their kid in a safe car.

    There are so many variables it's a bit of a worthless exercise, unless you want to make generalisations to justify your own path. But you (I'm talking the generic you, not the singular you) have to run your own race, set your own goals. Not just measure yourself against an imagined norm.
     
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  11. legallyblonde

    legallyblonde Well-Known Member

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    I fully agree that you never know someones story and that you should reserve judgement. I was just so surprised that every single person who came to the open home had a significantly nicer car than me! Hehe if I get the job I want I will be car free in the future so the point will be moot ;)
     
  12. Bayview

    Bayview Well-Known Member

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    We have two cars - one is an '09 Kluger for family use.
    The other is a '92 Mada Bravo 4 door ute - came with the workshop when I bought the business, and it's what I drive around in. It needs a new exhaust and a new driver front window winder assembly, and has a whine in the diff.

    No idea what the tenants drive - our IP is in W.A.
     
  13. WattleIdo

    WattleIdo renovating Premium Member

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    No offence meant - but it wouldn't be hard to have a nicer car than you. Standards have improved a lot over the last decade or two. What was considered road-worthy 10 or 20 years ago just wouldn't make it through an inspection these days.
    Really - no offence. I drove bombs for years and years. My Mazda3 (boring) is the oldest one - and very dirty. Good on you for getting into property so early though. And good on you for not getting an exy car. Still too young for it to have the desired effect anyway. ;) Lucky you.
     
  14. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    Yeah, 5k will get you a lot newer, nicer can than it would 3 years ago.

    New cars are more affordable now, companies have been doing 0% finance offers on them - hell, my dad, who has never financed a car before, got a new Renault Megane for 18k on 0% finance, which meant that the money that would have otherwise have gone on a replacement car has now been spread over 3 years and the money earmarked for a car has been invested instead.

    I think you're mad (depending on income, a big if) to tie up 5-10k in cash in a depreciating asset when you can finance at it very low rates, and instead use that cash to further invest.
     
  15. Bayview

    Bayview Well-Known Member

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    I cannot think of any reason why someone woiuld volunteer to do this...unless they were mentally challenged.

    On that note - and this is a true story so help me god - we had a customer who needed a new radiator in his '92 Fairlane - Yes; 1992. Same year as my piece of crap Mazda.

    To call his Fairlane a bomb is being kind....the rust holds it together.

    So, we do the job (and he tried to haggle us to death over the likely cost to do it) and when he gets the bill he throws a fit, because there was a bottle of coolant in the boot which we didn't use...we used 1.5litres of our own...we are talking about $12 worth....coulda saved him $10

    We have experienced this bloke before - he is a mingy, tight-arsed "steptoe" character; provided his own oil and filter one time, and stuff like this, buys the cheapest-arsed tyres for the car, never gets it serviced when it should be, and so on....

    He grows plants at his house and sells them from home - has them displayed on the front porch, and lives in the "war-torn" section of our swamp, he's at least 65 years old and still building pergolas in folks' houses.

    He then goes into this massive monologue tantrum about how he is worth so much money - and you won't believe this but it is totally true - he says he's worth $20 million!!...got all these factories and so forth, and all his money is tied up.

    Yeah, right; of course it is.

    So, by now he has upset me with his ********, and I said straight out to him; "So, tell me; if you are worth $20mill, how come you are driving around in this old bomb of a car, and crying over $10 bucks worth of coolant?"

    I felt really good to say that, but of course; he will never be back, and will tell 400 of his closest friends what an a-hole I am. :)
     
    Last edited: 6th Jul, 2015
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  16. AndrewTDP

    AndrewTDP Urban Planning Consultant Business Member

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    I agree 100% with that.

    I know a couple of people like that. Refuse to eat out, take a thermos of coffee everywhere.

    Money just for having money sitting around is kind of pointless really. It's not a competition. You don't get a medal if you die with over 20mil in the bank just sitting there doing nothing.
     
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  17. legallyblonde

    legallyblonde Well-Known Member

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    Hehe..... I am not a car person what so ever... I could not care less about what I drive as long as it is reliable! I dream about the day that I can live somewhere with a higher walkability score!

    I totally agree that if I had a 5k budget to buy a car today I would get a lot more bang for my buck! BUT cars are apparently a little more expensive down here than on the 'mainland' (according to my dad who cares a little more about cars than myself)... Supply and demand... cars hold their value a little longer down here (apparently).

    I concur.. There is no point being the richest person in the graveyard!!
     
  18. drg86

    drg86 Well-Known Member

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    I have just bought my first new car, after the engine in my 'cheapie' Subaru blew the head gasket I decided to get something with warranty. In my 13 years of driving I've always picked up second hand cars, many times I've made money on them by small fix up jobs or just buying for the right dollars so I've had a pretty good experience on what most consider a depreciating asset. New cars have become cheaper and I admit to being a car person. I didn't think I would buy new but with the EOFY deals new was cheaper than second hand for the model I wanted o_O

    So before this my tenants did have better cars than me, young girls with new hatchbacks probably bought by parents. I was rocking around in a $1500 Ford Laser earlier this year.

    With property investing banks tend to like seeing that extra 20 or 30k sitting in savings/offset for loan applications so I think many landlords would have had their cheap cars over the years.:cool:
     
  19. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I can recommend a mechanic in Dromona if you need someone :D
     
  20. willair

    willair Well-Known Member Premium Member

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    There was a joke on the old site, every time I fill the car up it doubles in value..