Opportunity -- Property -- After 20 yrs its here again

[againsthegrain]

back when he first became pm, on a few forums, tony abbott was prescribed the nickname "bony rabbit" which i did find humorous, and subsequently shortened it myself to bony rabs ...

So SA seems its still falling, cutting all the manufacturing jobs definitely not helping with any recovery

maybye jumped the gun a bit on this one eh?

https://indaily.com.au/news/2019/09/18/adelaide-house-sales-take-record-dive/

House sales in Adelaide have plunged to their lowest level in at least 17 years, with figures from the Australian Bureau of Statistics showing the sharpest decline on record.

 

[tech/a]

Opportunity screaming!

 

[leyy]

Been looking at some properties to invest myself given the opportunities available.

Thought i would run @tech/a calculations, wont be exact but should be relatively close, i have had to make a few assumptions.

General thoughts and observations
*cash flow positive (very important) from a serviceability point of view.
*good upside for capital growth.
*net return is low (without capital growth, market needs to be moving up to make money).

 

[leyy]

If you look at the return on invested capital it works out to be 4.39% with the upside of capital growth.

 

[tech/a]

Paid for it —— no loan no bank fees
In Super so less tax
Everything else pretty similar.

Potential for 30% over 10 years
Similar increase in Rent.

Better than Bank interest and I have enough
Exposed to the market.

 

[sptrawler]

Paid for it —— no loan no bank fees
In Super so less tax
Everything else pretty similar.

Potential for 30% over 10 years
Similar increase in Rent.

Better than Bank interest and I have enough
Exposed to the market.

I'm looking at the same idea Tech/A, I can pick up a 3x1 free standing unit for $200k, $250Pw min income, $60pw outgoings, in the super fund.
It would give a bit of diversity and steady cash flow, the owner wants to rent back indefinitely, so giving it serious consideration. The only down side IMO, as I age I hate the idea of getting back into rentals, can be more trouble than it's worth.

 

[tech/a]

Yes I’ve had probably 30 in my time managed all of them myself
I look after good Tennent and physically remove very bad ones.

Issues are temporary.
But not for everyone.
I personally like something with LAND that’s where the money is.
I’ve had units but they are hard to sell.
Attract a lower social group.

 

[Miner]

Doing tenders so flat out
Ill comment when I get my head out from under
the mountain of paper work.
Anyone got some codine!!

How is the status of your tenders submitted after two months? Still value for money to get you excited>

 

[sptrawler]

Yes I’ve had probably 30 in my time managed all of them myself
I look after good Tennent and physically remove very bad ones.

Issues are temporary.
But not for everyone.
I personally like something with LAND that’s where the money is.
I’ve had units but they are hard to sell.
Attract a lower social group.

Agree with you completely, but now I'm retired looking after a block of land and a house, as opposed to just a unit with minimal land is a toss up.
There is more money in the house and land, but there is less outlay for similar income and considerably less garden(hassle).
I as you, have always managed my own properties, as using property managers from my experience, is just throwing away money.
The other half says I have rocks in my head, shares are paying better, less hassle and trouble free.
So it isn't an easy decision, if it payed off I was lucky, if it is a lot of hassle it is "I told you so".
But the prices are getting ridiculously cheap IMO.

 

[tech/a]

Diversity SP

 

[tech/a]

How is the status of your tenders submitted after two months? Still value for money to get you excited>

After a dearth of Quality tenders there was a pleasant return to some decent ones coming across
my desk.
While we are talking with some of our principals we are yet to win anything of significance.
Nothing is being let.
I expect that a few will come out of those I have completed back then.

Everything in the Civil field is very very quiet.
Banks not releasing funds without knowing the last cent you've spent over the past 12 mths
and pledging your first born.

Its tough everywhere and we are securing anything we can to keep staff employed
Unfortunately I've had to let some go.

Producing more than we are securing.

 

[Miner]

After a dearth of Quality tenders there was a pleasant return to some decent ones coming across
my desk.
While we are talking with some of our principals we are yet to win anything of significance.
Nothing is being let.
I expect that a few will come out of those I have completed back then. (I sincerely wish, your wins will bring you back on ASF as well. Besides, we all are well-wishers of each other so our best wishes are with you)

Everything in the Civil field is very very quiet. (this is very confusing to me. Some specific contractors are kept on winning. Looking at the main road, they are just multiplying work keep some contractors very busy. I also find civil project managers on building circle are asking more but at the same time building in Australia is still subdued. Perth city side does not give the feeling there is a lack of works for some. Difficult to prove but there are lots of contracts going to whom I know and who am I- no competitive tender in many cases )
Banks not releasing funds without knowing the last cent you've spent over the past 12 mths
and pledging your first born. (that probably explains sporadic capital raising by some of the minnows. I have suffered from Sheffield Construction's $400 M project - they are just asking trick feed of capital and that has let the relevant EPC contractor somewhat dog and now under trading halt for a different reason. Small players are in desperate need to get fund when interest rate is low but banks are very unkind. Though not in business as some are, but this is affecting people on day jobs as well)

Its tough everywhere and we are securing anything we can to keep staff employed
Unfortunately I've had to let some go.

Producing more than we are securing.

thanks Tech. I do share some of the concerns. My note is on yours on the same subject.
God bless you to win your bids. I am sure you would be happier with 70% success rate in current market.

 

[Miner]

Agree with you completely, but now I'm retired looking after a block of land and a house, as opposed to just a unit with minimal land is a toss up.
There is more money in the house and land, but there is less outlay for similar income and considerably less garden(hassle).
I as you, have always managed my own properties, as using property managers from my experience, is just throwing away money.
The other half says I have rocks in my head, shares are paying better, less hassle and trouble free.
So it isn't an easy decision, if it payed off I was lucky, if it is a lot of hassle it is "I told you so".
But the prices are getting ridiculously cheap IMO.

Maybe you consider joining hands with Joe to stop him shutting this forum.

 

[aus_trader]

I look after good Tennent and physically remove very bad ones.

I like that comment, and can see the bogans being "physically" dragged out by the ear.

 

[qldfrog]

Hope you wil be ok @tech/a
Never easy to be in that position and always take a toll on the personal side, but i im sure you are doing as good as can be

 

[tech/a]

Hope you wil be ok @tech/a
Never easy to be in that position and always take a toll on the personal side, but I'm sure you are doing as good as can be

Thanks QF
I find the hard times the most rewarding (To reflect on) I certainly don't like the ups and downs in the building industry which
often leave good staff who (in the good times) have been with you for years left to fend with everyone else in a depressed market.
People who have done nothing but serve you well but we have to let go for the good of everyone else. Quite a few do return as
happened in 2009.

Tough times reduce your Complacency.
They make you revisit everything from Pricing to Efficiencies to Purchasing.
It magnifies weaknesses. I found quite a few.
Once rectified we managed to start securing contracts. All be it smaller domestics.
While not our primary market we do go there when expertise requires or the Market makes us.

Strangely while typing this one of our larger Clients call for our availability for a Subdivision.
The worm is starting to turn but very slowly.

 

[aus_trader]

Tough times reduce your Complacency.

Well said tech/a. It's a time to reflect on strengths and weaknesses.

I was looking at a few companies on the ASX today and the same thing could be said. Big re-structures and major cost cutting programs in place to reduce/remove exactly what you said "complacency".

 

[Johny5]

I look after good Tennent and physically remove very bad ones.

Yes I suppose if you have a few big mates (or as you have noted before a few mates in Blue) you can get rid of the bad tenants, but I have several friends that have lost out big time on bad tenants trashing the place, one friends rental was so badly trashed that the house was condemned, the tenant then took him to the tribunal for making them live in a condemned house, what a mess.

 

[Johny5]

But having said all that I also know a few that have made a fortune doing exactly what tech/a is doing, so keep on keeping on

 

[sptrawler]

Yes I suppose if you have a few big mates (or as you have noted before a few mates in Blue) you can get rid of the bad tenants, but I have several friends that have lost out big time on bad tenants trashing the place, one friends rental was so badly trashed that the house was condemned, the tenant then took him to the tribunal for making them live in a condemned house, what a mess.

Been there done that, the house was trashed so bad I had to demolish it, then sold the block. That was when the other half said, never again.