Any Landlords/renters for some info please.

[jaydee]

I live in a quiet cul d sac and own my house with my family.

Theres a set of units next door and the one right next to us is up for sale.

Thinking of buying it, be a great start for my teenage kids later. Would rent it out for the time being.

Question is, is it too close to home? I must admit I'm a bit of a busy body and keep an eye on things as I'm pretty security conscious. I think this might lead to problems for me having my tennants too close.

Any comments please, from renters or Landlords with a perspective on it.

[AC]

Originally Posted by jaydee

Question is, is it too close to home? I must admit I'm a bit of a busy body and keep an eye on things as I'm pretty security conscious. I think this might lead to problems for me having my tennants too close.

I think you answered your own question. ;)

[gz1]

Agree with AC.
Unless you can appoint an agent to look after and force yourself to stay distant you will end up with problems.

[fiery]

You have kind of answered your own question really but then on the other hand with what happens in some rentals maybe wouldn't be such a bad idea to be close.
You would have to just make sure not to intrude on their privacy as they are entitled to not be harassed by the 'landlord'.

You honestly would just need to ensure you understood what is and isn't acceptable in a rental property and abide by those rules, so maybe some digging into that before you consider any further whether to purchase or not.

Good luck if you decide to go ahead and purchase the unit.

[TE50pilot]

If you buy it them put the renting of it in the hands of an agent then they don't have to know you own it. The fees are tax deductable and they can arrange for things to be repaired as needed. The agent is supposed to contact you before repairs are made so you can arrange it yourself again without their knowledge of you owning it.
Unless you really know the tenants well don't let them know you own it because they can hassle you to fix things and complain about things.
I have a house rented next door and I am on good terms with tenants but Ihave known and worked with them for years though. Just remember to charge the right rent or close to it and don't feel sorry for them for doing so. If they are really good tenants you may wish to charge a bit lower than market to keep them for a long period.
Hope that helps a bit.

[Smoke Pursuit]

Too close to home.

Out of sight, out of mind...

We have several rentals and im just refurbing one out the moment, breaks my heart having to rent it out after doing it up, but its all for future growth / tax purposes...

I couldn't have one next door to me tho, id be up them all the time!

[Thornie]

Originally Posted by LSTerritoryGhia

Too close to home.

Out of sight, out of mind...

Haha i agree mines about 2500km away, and real estate looks after it for me.

[ebxr8240]

Wouldn't worry me.. It's a Unit after all...

[drew`SEVNT5]

Id love to help you...


but, seeing as I can't get a rental for love nor money, I can't


Seemingly Landlords in inner east Melbourne don't want to risk 2 x 23y.old guys for some strange reason

[SeXC]

Originally Posted by drew`SEVNT5

Id love to help you...


but, seeing as I can't get a rental for love nor money, I can't


Seemingly Landlords in inner east Melbourne don't want to risk 2 x 23y.old guys for some strange reason

sorry to hijack thread, but introduce your mate as your boyfriend and act camp. Worked for me and a mate at 19

[Jesk]

Originally Posted by drew`SEVNT5

Id love to help you...


but, seeing as I can't get a rental for love nor money, I can't


Seemingly Landlords in inner east Melbourne don't want to risk 2 x 23y.old guys for some strange reason

Originally Posted by SeXC

sorry to hijack thread, but introduce your mate as your boyfriend and act camp. Worked for me and a mate at 19

that sounds like an excellent idea cos even I know just as a single 22 year old I get sideways glances from the landlords I talked with, another suggestion would be to appear more family friendly, ie: my grandparents helped with the initial looking at the place cos I was working 15 hours a day at the time.

But back on topic the place I live in is right next door to my landlord's elderly parents and we don't talk too much but the proximity helps with maintenence of the property cos his father does almost everything and I'm willing to give a hand with the heavy stuff.

So I reckon close could work pretty well if you have the right attitude

[drew`SEVNT5]

Originally Posted by SeXC

sorry to hijack thread, but introduce your mate as your boyfriend and act camp. Worked for me and a mate at 19

Hrmz....


An idea, don't know if we could......(wait for it)......PULL IT OFF!


*boodumptish!*


But, seriously......stop being so hard, rental market! Its not like we are hardly ever home(I work bloody long hours, and the other guy works 3 jobs!)

[gcg2503]

My properties are all within a 1km radius of one another.

But if you go ahead with the purchase do not let the tenants know where you live. Dont let them know how many you own as it can come back to haunt you....

Good luck with it all and I like your thinking with setting up the kids

[TURBOTAXI]

I have local property that is rented, property in Sydney (4 hours away) and QLG (8 and 20 Hours away) the local ones are good because if there is a problem I am able to show up. (saves lots of $$$)

QLD is a bit more of a challenge. As is sydney.

It comes down to good tenant selection and a good agent.

[The Yeti]

IMHO investment proportys should be a good car trip away at best preferably a plane trip, I'm also a busy body and this is why my closest property is 3hrs away

another tip and it took me a while and thats dont get emotionaly attacehd to the house, its an investment like any other, the tennants WILL treat it like some one else owns it (becasue they do) dont let it get to you, buy it rent it maintain it as required, no more no less.

[Peuty]

I have a bad enought time with my landlord being a few suburbs away, let alone next door.

[Powdered Toast Man]

I can't really add much more than what everyone else has already said but I live next door to my landlord. Apart from the over the back fence checks (his house is over my back fence, plus the surrounding 5 or so properties) and the fact he walks past every day on his way to and from work (he's a local GP) I dont have any problems with him.

Really I probably should talk to him more often as my house is a dump and is falling apart. I think there are only 2 doors in the whole house with complete and/or working door handles lol.

And to all those landlords reading this with disgust; before you judge me, the house really is a dump. It's in much better condition now as compared to when I first moved in. It should probably be condemned, and I'm not being sarcastic! Doors don't close properly or dont latch. The back security door can't be opened and neither can the laundry window because half the house is constantly sinking on the rotten stumps so it is twisted. Plaster on the walls and ceiling are cracked because of the constant movement, kitchen cupboard doors wont close etc. There is a gas leak under the living room floor. But eh, it was cheap rent for a few years.

[ms700]

If you could handle all nighter parties being there, and wouldnt care if you heard bottles getting broken, go right ahead.

But if the thought of them rocking till dawn worries you, and seeing dodgy people walking in to said party with a carton on their shoulder, it might be best to let it slide.

[jaydee]

Cheers everyone, some good points to take on board.

I'll give it careful consideration and if I do go ahead I will definitely get an agent as suggested and try and keep arms length.

[sneaky]

a friend of mine owned a rental across the road from his house. seemed to work for him. he had an agent look after the dealings with the tenants. but because he was right near the property he could keep an eye on things, check the tenants looked after it, etc.

[Yellow_Festiva]

I would buy it if possible.

The future scope for further development is greatly increased as you can use your block to add the the units.

If they are a block of units, it would be easier for you as there isnt much to damage externally if they are brick construction. Generally maintenance is less as they dont have fancy gardens etc.

The fact that your next door can pose its problems... but I see more positives than negatives.

DO NOT attempt to manage the property yourself. The size of the property, as well as your vicinity to it will end in tears. An agent is a paid representative and worth the 5-7% they are going to charge.

I'm talking from experience. Good luch with the transaction.

Also, talk to a savy accountant, who may be able to structure the purchase in such a way to benefit you tax wise, seeing as it will be held for your kids rather than yourself.

[FTe342]

Definately don't do it. I had an inv ppty in the backyard after I did a dual occ development and then subdivided. The tenant trashed the place under my nose not so much thru malicious damage but by just not cleaning it. In the end I had to threaten disconnection of the water and power to get her out after the agents instructions fell on deaf ears. I have since sold it to get some mental relaxation.

This unit will be like a noose around your neck when it should be at arms length. The kids won't want to be next door to you anyway when the time comes. And why do you want all your eggs in one basket? Spread the risk. If values in your suburb dive then both your ppties suffer.

I would buy a free standing house over a unit any day for capital growth and lower ongoing costs. The strata levies may be tax deductable but with tax rates so low these days the tax benfits are minimal. You don't get a $ back for every $ you outlay, only a proportion depending on your taxable income after rent income is added.

Identify an area where capital growth is yet to happen and build or buy a brand new ppty so you can maximise depreciation deductions for the biggest tax benfit. Depreciation is not an actual expense of pocket (so you don't phyically pay anything lie you do for rates, ins, strata levies) but you get massive tax deductions. You need a Quantity Surveyors Report to fully exploit this benefit and you will get no challenge from the ATO if you have it. Also, with a new ppty you won't be putting you hand in your pocket for at least 5 yrs for repairs/maintenance. New ppty also tends to attract a better style of tenant.

I'd like to arrange your inv ppty finance for you but the law in WA prevents anyone other than WA licensed lenders/brokers from doing this

If you haven't already get a hold of some books by Jan Somers like "Building Wealth thru Inv Ppty" and some others she wrote

[jaydee]

Wow Shaynet, some points I hadn't considered, thanks.
Yes I'll be doing research before I make the plunge.
At this point it doesn't look like the rent will cover the repayments by quite a bit and we can't afford to carry the difference at the moment.
I'll do some more checking with our financial planner.

[FTe342]

Originally Posted by jaydee

Wow Shaynet, some points I hadn't considered, thanks.
Yes I'll be doing research before I make the plunge.
At this point it doesn't look like the rent will cover the repayments by quite a bit and we can't afford to carry the difference at the moment.
I'll do some more checking with our financial planner.

You can, or get your acct to, lodge a tax variation appn with the ATO so you get less tax deducted from your pay (whether weekly, F/n or mthly) which means that you get more net pay to help pay the mtg (with the rent).

A FP will probably try to convince you to buy shares since he won't make anything out you buying a ppty!

Don't know anything about the market over there but with the interest rate rises the market has practically ground to a halt here (I am between Syd & N'castle) and I expect it to get worse as I believe there will be more rate rises. Whether this filters to around the country remains to be seen but I wouldn't be buying ppty just for the moment as I believe the market hasn't bottomed out by a long way - lots of mtgee sales to come.

PS - the only shares I would be buying are blue chip mining

[TURBOTAXI]

Originally Posted by shaynet

You can, or get your acct to, lodge a tax variation appn with the ATO so you get less tax deducted from your pay (whether weekly, F/n or mthly) which means that you get more net pay to help pay the mtg (with the rent).

A FP will probably try to convince you to buy shares since he won't make anything out you buying a ppty!

Don't know anything about the market over there but with the interest rate rises the market has practically ground to a halt here (I am between Syd & N'castle) and I expect it to get worse as I believe there will be more rate rises. Whether this filters to around the country remains to be seen but I wouldn't be buying ppty just for the moment as I believe the market hasn't bottomed out by a long way - lots of mtgee sales to come.

PS - the only shares I would be buying are blue chip mining

The tax varation is called a 221D.
I dont use a financial planner.
More pain to come
Bargains for the cashed up.

[gcg2503]

Originally Posted by TURBOTAXI

The tax varation is called a 221D.
I dont use a financial planner.
More pain to come
Bargains for the cashed up.

Ah the beloved section 221D variation of income tax instalments

Havent lodged or even thought of those since I left the Chartered Accounting industry back in 2000...

Definitely more pain to come

I would be holding off any investment property purchases over the next few months definitely. Very good point

Wonder how those people are going , the ones referred to in those investment seminars, "I bought 38 properties on my teacher's salary...etc" will fare given the current interest rate levels and projected future rises...

[FTe342]

Originally Posted by gcg2503

Ah the beloved section 221D variation of income tax instalments

Havent lodged or even thought of those since I left the Chartered Accounting industry back in 2000...

Definitely more pain to come

I would be holding off any investment property purchases over the next few months definitely. Very good point

Wonder how those people are going , the ones referred to in those investment seminars, "I bought 38 properties on my teacher's salary...etc" will fare given the current interest rate levels and projected future rises...

Unless they borrowed on fixed rates they will be hurting real bad. But I wouldn't recommend borrowing on fixed rate ATM - its too late, take a basic variable and wait for the rates to drop in the current climate

[FTe342]

Originally Posted by TURBOTAXI

The tax varation is called a 221D.
I dont use a financial planner.
More pain to come
Bargains for the cashed up.

It hasn't been called a Section 221D for a few years now - has a new name but I haven't bothered to find out what it is - although many in the industry still refer to it as a 221D

[sbutler]

Originally Posted by jaydee

I live in a quiet cul d sac and own my house with my family.

Theres a set of units next door and the one right next to us is up for sale.

Thinking of buying it, be a great start for my teenage kids later. Would rent it out for the time being.

Question is, is it too close to home? I must admit I'm a bit of a busy body and keep an eye on things as I'm pretty security conscious. I think this might lead to problems for me having my tennants too close.

Any comments please, from renters or Landlords with a perspective on it.

Ok I'll let you in on my investment propety saga.

First, these are the things I have learnt in the 7 years of being a landlord of 4 propetys.

1. Manage the place yourself.
2. Get a realestate to find you some good tennets. [They know who's Ok & who isnt] & for a small fee they do all the background checks, lease agreements, CRAs & what not.

3. Meet with the tennets before you let them in. If they turn up in a
HQ with 2 pitbulls in the back & 3 snotty nosed kids. Say goodbuy.

4. When you have decided on the tennets, pay the estate agent his fee for doing his work.

5. Read them the riot act from the get go. I have told all my tennets how it is.
If they **** with me they will be getting a visit they would really not like.
There will be no tennets tribunal, no negoatations, no excuses. Their stuff will be thrown out on the street & the lock changed.
This will let them know were they stand.
Direct debit their rent.[no letting them give it to you, or bank tranfer]
This is your propety & you keep an eye on it!

The only trouble I have ever had was when I owned units 700Ks away. I couldnt keep an eye on them & had to have a estste agent. It was a nightmare.

One tennet was late with there rent, the agent could never find them at home.WHY? because they worked the same hours the agent did!
This went on for about 2 months, i had a friend go out & have a look. The place was empty & I was out 2 months rent.
So the closer you are to you the joint is the better!

What shaynet said is true. GET a Quantity Surveyors Report!!!
Great advice & do it.

I was lucky, I locked my loans in when rates were down, again great advice from shaynet!

Take shaynet's advice its priceless.

IMO if the price is right, [its a buyers market ATM] so haggle. Go for it.
Manage them yourself.
Check out potentional tennets that have been forwarded by the agent.
Give them the rundown on what will happen if there is any trouble.
Do them a deal.
Get slightly less than the current rent, but get good tennets. It works both ways. They appresiate the slight saving in rent, & you'll appresiate the good tennets..If after 6 months everything is going well, try to get the tennets to lock in for another 12 months. You want to keep good tennets for as long as you can.

Sit back & let the market go up & down, because in the end, you will win.
Rememeber all the times in the past you've said or heard?
[I could have bought that 5 years ago for X amount & now it worth double that]
That never changes. My friends said it to me & ive said it to my myself.

Buy in the bust [now] even though the rates are up, they have been a lot higher! So if your gonna do it, dont stuff around! Rents are on the rise too.
Take shaynets advice & Good luck.
These are just my experance's & opinions If they help you great, if it dosent, no harm done.

[jaydee]

Cheers sbutler, some good advice.