I beleived buying property and working hard to pay them off was the way to create wealth. I have now read both of steves books and down some searches on this website and think i may have got it wrong. I own my PPOR which has performed well but i have a IP that i am loosing 150$ a week! Is this a crazy investment. I am currently putting all my income into reducing this higly geared property. In a good area but prices arn’t expeted to rise since there has been a boom for several years. what are your thoughts.[confused2]
If there will be no boom in that area cause its already happened, then sell it and buy two +CF properties.
regards,
George.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
I was thinking that would be the best to do have been looking on the web to see what it around
Keep doing what your doing.
Quality property always outperforms rural/regional ve+ property. Thats why it costs you extra.
Go read the books by Jan Somers and Peter Spann. They have been around longer than Steve McKnight.
Then make up your own mind. Dont change things just because you have read Steves latest books without reading Spann and Somers.
Geo – Have you read any Peter Spann or Jan Somers Books?
Hi Yack,
read Peter Spann’s – and agree with you. Quality is good to go for.
But it sounds like summer is suffering painfully from the $150 a week out of pocket so i suggested to sell it, cash in and purchase 2 +CF investments and be comfortable. If the out of pocket expense was not an issue, then I would suggest to definetely hold onto it.
regards,
geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
I have read both the NZ version and australian version of jan somers. It was very good and actually got me out there to buy this investment property. It is a good bayside area. I think maybe a mix of both would be great my next property will be Positive cashflow and i will work hard paying down my loan. this peter span book i have notice has come up a lot on this website will have to check it out.
Not suffering love my job just hate wasting money. And i want to be in the best finanical position that is possible for me. Thanks to you both for the advice[biggrin]
Can you tell me the name of peter spanns book i think i will go and check this out now?
How you could build a $10 million property portfolio in just 10 years.
Summer,
I had the same questions after reading Steves Books & having an IP that is costing me money.I have taken on the advice of a few in this forum including Yack to find & read Peter Spans books. I finished the 10 mil in 10yrs last night & thought it an excellent book & would recommend all have a read for a different perspective.
I am now intending to try & mix a bit of +CF with good location investments to stay as C/f neutral as possible & look for some solid long term growth.
One classic line for throwing a spanner in the works was that a friend of his reduced his contract offer each time a vendor came back with a counter offer – WHAT A CLASSIC
quality city properties dont ‘always’ outperform country areas. this is patently wrong. especially over the last 2 years. if you were to clarify time frames you may be rightmost of the time. but thats what investing is all about risk/reward and time in and out of the market…
my country property had doubled in values in 18 months and if i were to sell now that wld be better performing than most city properties. if i was to hold on another 20 years – who knows wch one then will be the better performer..
remeber alwso that quality is in the eye of the beholder. i have never met a good trader / investor who likes to generalise to often – this type of thinking causes you to follow the crowd
summer – be different – it can work!!!
<<<my country property had doubled in values in 18 months and if i were to sell now that wld be better performing than most city properties>>>
Yeah but that does not mean it will double again in 18 months. It also means it has a lot more space to fall over the next 18 months as interest rates start to tend upwards.
yack – if i sell now i make money…thats the point. you said ‘always’. youre wrong!
Thanks Yack and Geo i have just finished Peter Spann’s book how you could build 10 million property. Great read!! I suppose there is no right or wrong way in property investment some people prefering positive cashflow and some CG.(both would be good!) In Peters book he wasn’t paying off the properties just fixing the loans and paying the interest. What do you think about trying to pay down a loan on a Ip. I thought this was good before reading peters book as then you would eventually have more equity and then be able to serice more loans in the future.
Hi Summer,
initially youd want to have your IP on IO terms in order to secure the deposits for other properties. Later on, it’s best to repay the loans amount as quickly as possible so you pay less interest and your ROI increases.
Regards,
Geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Usually country properties are cheper and if they are in area that is reasonably stable usually reductions are going to be a lot less in % wise than more expensive property (who wants to buy a multi-million dollar house in a recession? Not that many people…).
Rgds.
Lucifer_auHi there geo and others.
Geo, please dont take this as me being argumentative but I query what you say about later on, repaying your loans asap. I’m not saying I dont agree with you, but have recently been thinking that the (extra) money you pay back on your loans could go towards deposits for more I/P’s. Sure, your debt levels are rising but so is your capital growth. Why not leave this world owing the banks, I’m sure your next of kin won’t mind getting stuck with your debt because they’re also going to get your assets.
What do you think.
Regards
MartyOriginally posted by geo:Hi Summer,
initially youd want to have your IP on IO terms in order to secure the deposits for other properties. Later on, it’s best to repay the loans amount as quickly as possible so you pay less interest and your ROI increases.
Regards,
Geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Hi Marty,
Sorry but i tend to disagree. I would initially not repay my principal to allow for extra chash to build for deposits but once I have enough +CF to live comfortably, I would immediately repay my principal for 2 reasons
i) I don’t like the banks taking my money
ii) I can increase my +CF exponentially which inturn allows for deposits.You see, by doing the above method, I win both ways, my properties are supplying +CF for deposits on other investments whilst also allowing me to repay my principal, thus increasing my +CF which in turn increases my cashflow for deposits. It’s the investing circle.
Regards,
Geo.I’ve found a way to help you save and earn whilst not selling or delivering any product. If interested, drop me an email or PM me to find out how
Summer,
I wouldn’t sell if its a nice property. It will cost you heaps more than the $150pw to sell.
Have you considered applying for a “PAYG Income Tax withholding variation”? This is a standard procedure for negitively geared property and will increase your cashflow.
Have you had a quantity surveyors report done so you can get max deductions ? This also will improve your cashflow.
You may be able to convert a $150pw loss to a close to neutral position.
MJK
I didn’t know about a quanity surveyor until i joined this site i will look into it thanks for the advice. I was just leaving it to my accountant (although he is very good.)
Just a question on paying down a loan on an Ip so you can then get more equity to service more IP loans.
I thought this was the best way……eg.
When i took out my last IP loan I chose a Prinicple and interesst loan… I chose this so i could build more equity and then eventually be able to take out more loans and buy more properties.
I borrowed my MAX but it is down to currently 45% debt(am thinking i can borrow more now in a IO loan) The problem with me is I have equity but they say that my income can’t service the debt. Which is why i was putting money into to reducing the principle of my IP so then i could service more debt. is this good?
I was thinking of approching the bank soon and applying for a Interest only loan on another IP I would just pay the interest of the new IP and then continue to put my remaining money in my first IP paying down the loan as much as possible.
What is everyones thoughts on that strategy. I own my own PROR. I would like to eventually have as many IP’s as possible![cap]
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