Im currently employed in the a high paying steady government job($90000 pa pre tax). Im looking at leaving the job by the end of next year and want to basically start living off +IP’s. I have 3 negative geared IP’s and my house. I bought these properties without any real strategy except maybe using them as a tax break which has worked quite well and got quite lucking with the Perth price boom. Most the houses have doubled in the last 5ish years. I estimate by the end of next year Ill be worth about $400000. Can anyone suggest the best way to make this money work for me ie Cash positve investment with a view to coninue to buy more property.
Hey Moorey, congrats on getting to where you are at. When you say that you will be worth 400,000. do you mean you will have that much equity? If so, i would highly suggest looking at some top end commercial property. Commercial Property Yields are still very good and even better if they pay outgoings. Just make sure you get a property that can easily be leased out if current tenants don’t renew their lease. The reason i suggest commercial is that you can only really lend 70%, which means you have to find a 30% deposit + costs. But if you have that much equity, the definately something to consider.
Matt R (Gold Coast)
Just been to Steves Masterclas in Melbourne, I thought the books were good but this was a whole new level. Well done to the team at PI.com especially Brent on organising the day. Now lets see what I learnt….
If you plan to stop working in 18 months how will you fund your debt? Since your Properties are negetively geared then you won’t be able to keep your properties as your cash flow will dry up. If you were to sell the negetively geared properties and access the capital gains you have made you will be able to start afresh and look at positively geared investments.
You may also run into the problem of getting loans if the bank sees you don’t have a job, it seems to be a rule that you may have a lot of money but no job, no loan. That is unless you are a proven investor!!I plan to sell 2 properties(these being my first 2) realising the profit of about $280000 before tax this year and look at selling my other IP later next year. I had thought about commercial property. It appears to have a lot of advantages. I went to one of Steves masterclasses about 4 months ago. It was a good eye opener and confirmed what I realised that I was a speculator rather than investor. Does anyone have any thougthts on borrowing against your primary home. Im not emotionally attached to it and would have no dramas selling to realise capital if it was financially benifial. I also trade forex and can see it could be very profitable to do it fulltime.
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