Dear Steve[
],We are currently reading your book, and have done the ‘Rich Dad Poor Dad’ series over. We have 2 questions:
1:-
Given that a property can have a very attractive CoCR but not fit with the 11-Second-Rule, when do you consider a property to be positively geared?: (1) If it covers the interest repayments (2) If it covers the P & I repayments (3) If it covers the interest repayments, insurance, rates, and management fees (4) If it covers the P & I repayments, insurance, rates, and management fees.2:-
Is it really possible to buy positive cashflow properties in a booming market as we currently have? We live in Toowoomba and are finding it very difficult to find any properties that fit the 11-Second-Rule. We are now looking at possibly buying in a rural area just outside Toowoomba with approx 6000-10000 population. Property prices here don’t seem to have jumped yet.We value any opinions on these subjects.
P.S. The book is well structured – easy to read, diagrams – well done.
Hi
I consider a proeprty to be positive cashflow when the income exceeds all expenses. Positive geared is when it might be negatively geared but then positve after depreciation and tax benefits are counted.
Any property can be made cashflow positive by wrapping it. doens’t matter where it is.
You could also change a negative cashlfow into positive by converting a room into antoher bedroom for example or renting each room out separately to students (for example).
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Lovin Life,
Welcome to the forum.
I’ll try to answer for Steve, ‘cos I’ve heard he’s very busy at the moment.
Steve would only buy a property if it leaves positve $$$ after all costs, ie.. mgmt fees, insurance, rates, etc…
IT IS still possible to buy properties that meet the 11 sec solution. It is much harder though. I have just settled on one, $53,000 rented @ $115pw, in VG Cond. Don’t give up. Basically I think you need to decide on an area, and constantly contact the RE Agents every few days. They all seem to have big lists of potential buyers. Nothing much good is appearing on realestate.com anymore.
You do have to look further afield. My purchase was in a Victorian town of about 7500 people, but with good industry and employment.
Good luck,
Del
Hi, I have located a couple of properties in my town that are potential positive cash flow. Both priced around $50k and renting for $110+ per week. Our population is only 2500 but we have 100% employment and a steady growth from a large diversity of rural industries. Rental are hard to find (for a tenant) and the price rises are only just sneaking into town.
I do not have the finance to jump on these so I’m offering to make the connection for any interested parties in return for a finders fee if the deal goes through.
Interested?
I’m happy to supply more info/photos etc on request.
Email me *****************Sorry Gianni. For the sake of being controversial no advertising on the forum. Even if it is in good faith.
Enjoy
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