i recently bought a property (before knowing about this site, or the 11 sec rule). I haven’t read the book but have applied the 11 sec rule now. this has shown me that my property is far from being cash flow positive. in fact, i have to multiply the number by 2000 to get anywhere near the purchase price. do i sell and reinvest the money elsewhere? or do i keep the ppty and sell it in a year to get capital gain? any suggestions anyone?Why don’t you post some more detail here and see what the forum members can advise.
Don’t be too hasty to sell.
I hope it all works out,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985yes afgangirl as “Simon says” (i’m sure i’ve heard that before somewhere?) more detail is needed for instance where is the property.
regards westanhi
well the property is in Berwick, Victoria. The Price is 290k and the projected rental income is around 280-300. its double storey, 4 b/rooms plus a study. great views. close to primary school, secondary school, monash university, hospital, freeway entrance, shopping centres, chisholm college. its getting settled on monday. property next door sold for 330k so i thought i’m getting a bargain at 290k. but now i’m not so sure. [?]g’day afgangirl
my advice is
– wait for atleast one year before reconsidering. the transaction costs will kill u uless you can sell for atleast a 15pct premium on what you bought it for.
hold on for 1 year so you will pay less cgt. berwick is going through the roof at the moment- its a real growth corridor so if you can handle the cashflow hang in there and watch the prices rise a little more – i think!!
also yr return look to be abt 5 pct wch in truth is higher than most suburbs in melbourne.
i wouldn’t live and die by the 11 sec advice. It sounds like you are headed in the right direction. If you want to stay in metro Melbourne for IP’s it’s virutally impossible to get an 11 sec property unless you are looking at commercial properties.
If you can get $290 a week on a property that you paid $280k for it’s better than what a lot of other investors are getting in returns in Melbourne. And Berwick been a growth area may soon mean your property grows in equity which can then finance your next purcahse.
I find that the 11 sec rule is more about earnings than capital growth. It depends what your strategy is, but I wouldn’t buy an 11 sec property in an area that I didn’thought was stalling in price. I would go for the non-11 sec property in a growth area. But then my strategy is long term growth in capital using the revenue to subsidise the mortgage, not so much about cash in my pocket today. however, my age and earnings position allows me to take this position.
We will all have different views on this. And no matter how many property books you read, the authors will have different views too.
that gives me a better idea.
i think i’ll hold on to it.
thanx for the advice.
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