Hi
I’ve just finished reading your book Steve – thankyou for sharing your knowledge – it truly has opened my eyes!! I never did fully understand what the benefit was of negative gearing as I thought there was something wrong with the whole structure, its great to find that someone has not only adopted the same philosophy but turned it into something that’s tangable and usable. Thankyou so much!!! My wife (whom I married in Feb this year) have decided that this is the best way to secure our financial future and we’re going to start as soon as we’re back from the UK.
Just a couple of quick qn’s, it was mentioned that when you’re investing that renting would be the best option for us vs owning. Why is this exactly?
Also I am wanting to buy in Brisbane at least now to be able to get into a market that is very quickly becoming harder and harder to get into. For this reason, is it OK to go half way on the ’11 second rule’ ie buy a property that is returning 180pw on a 130pw investment based on the fact that its in a strong capital growth area?
Cheers,
Phil[
]Hi Phil and welcome to the forum, and the world of investing.
The 11 second solution is just a filter that Steve uses to weed out the unprofitable houses, or just to cut down the number that he looks at. You’ve got to remember that his aim was to buy many, quickly, and so they all had to pay for themselves quite well from day one. Plus, it was an excellent market for rental when he started.
I think the deals are there still, but you’ve got to know what you want. If you want capital gain, as opposed to cashflow (which is what Steve wanted), then you might be willing to take a lesser rental now. If you don’t have too many properties, negative gearing can become positive cashflow if there’s enough depreciation, and so it won’t cost you anything.
You and your wife need to sit down, and map out your plan (as Steve and Dave did – I’m guessing the wives had a little input too[?]), and then formulate your strategy from there.
I know if you ask Billfromoz, he will say not to buy now, but to wait a couple of years.
Cheers
MelThanks Melbear,
Why would he say to wait a few years? Wouldn’t it be better to get into the market while its relatively affordable?
A life lived in fear is a life half lived!
Phil
I suggest you do a bit of reading of the posts over the last few weeks. Bill is adamant that we are at the end of the ‘6 year bull market’, and that prices will drop by up to 30% – I think. Instead of giving you his ‘message’ I do suggest you read recent posts.
Or email him, he’s a really helpful guy, and he is happy to help anybody out. He’s extremely experienced (ex Real Estate Agency owner), and he leaves his email in every post.
Cheers
Mel
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