Firstly I would like to say that this is an absolutely fantasic site, the amount of information on this site is amazing![]
I would like to thank every one who has indirectly answered all my questions, by posting on the forum, just about all my questions have been answered by just reading the forum. It is wonderful to find a group of poeple who are willing to share their knowledge and experiences good and bad to people who they don’t know or only know from the forum, and only expect a return of sharing and courtesy.
My first question is for those people who buy IP’s to hold and rent out.
When calculating your expenses for the year, do you use a flat amount eg. $2000 a year or do you use a percentage of the yearly rent eg 5% and why do you use the method you do?
My second question is to the people that use LOC Loans.
I understand that every bodys situation is different, but are they an effective way of keeping everything together eg umberella effect with sub loan accounts branching off from the main account, and do you pay interest only or do you have all payments deffered for a certain amount of time or until you reach a set limit?
I do two things for ongoing costs, first I firm up all possible annual costs like current rates, insurance and then still allow 5% of rent as a buffer, either for maintenance or incidentals.