I have decided to start an investment journey over the next 12 months and keep a diary of what happens here on this web site.
I have never done this before so I am not sure how things will go – only time will tell.
My goal is to achieve $100 per week in new passive income by this day next year (9th January 2007).
This income can come directly from property, or it can come from cash profits realised from property.
This goal may not seam like much to some but to me it is big enough – so here’s to the next 12 months.
I’ll keep you informed as I go.
Sandy.
Hi Sandy,
Sounds like a great idea and I am looking forward to reading your ongoing diary.
Regards, Wylie
NIce post
If your doing this for accountability. Tell us How much money you are starting with (Thats money you physically have in the bank)
And any Equity you already have.
Why
Cause if you already got 104,000 dollars cash. You could bank it at 5% for a 100 dollar a week return.I look forward to hearing of your future success and journey.
-Thomas
“More Time To Snowboard”
Good luck to you Sandy, it’s great that you’ve set a goal.
Kind regards,
Smart CookieATM HSBC Bank is offering 5.6% Interest for a 3month Term Deposit. I would suggest some Share trading but it is very hard to call share trading passive income. I find I have to spend quite a bit of time, especially with the speccies. All the best.
I have zero $ in the bank. In fact I owe some money on the credit card.
However I do own my home outright and I am thinking of downsizing the home. Drastic step I know given that I can borrow against the equity – but I am in an expensive home and I may be able to find one that is quite good enough and really free up some actual real money. I expect that this first $100 per week of passive income will not be the last.
My plan is to come away from the entire transaction with at least $50K in cash freed up after all costs were paid (including realestate agents, and taxes.)
If I would free up less than $50K then I would not bother.
I have been looking around my area but like many areas today there are no available posiive cash flow properties today. They will need to be made. The best return is 5% – so I am putting my creative thinking hat on but have not found anything yet.
In addition I really do believe that there may be more opportunities in the share market today because the huge babyboomer generation is at at investment life cycle stage and we can see there is no easy money now in real estate so they have to put their wealth somewhere – share market is the logical place.
However having said that I am not really interested in shares so I will be remaining in property and moving forward in this market.
With a quieter market the buyer now has time to really sort the good from the bad properties.
Sandy
Scoped out the market today and found there is a shortage of certain types of rental properties in a certain area.
I am thinking of sourcing a large company that needs the rental and asking what they would like and then proceeding to build based on their needs if they are prepared to sign a long term lease in advance.
Then possibly proceeding if the numbers are still ok even after their lease period.
Anyone done that before?
Originally posted by Blue Ship:However I do own my home outright and I am thinking of downsizing the home. Drastic step I know given that I can borrow against the equity – but I am in an expensive home and I may be able to find one that is quite good enough and really free up some actual real money.
Hi Sandy,
Good luck on the pursuit of your goals but the reasoning behind this comment has got me a little puzzled – I appreciate that I am a little simple sometimes but……
You indicate that you own your house outright and yet you say that you could free up some cash by selling this property.
I assume by this you mean that you will have cash to put down as deposits. I wonder if you have considered the amount you lose in agent’s fees and stamp duty on the new property. I would also say that (in generally terms) a quality property in a quality locality will usually out perform a ‘downsized’ option. In effect this means you could also be giving up future growth (and investible equity) as well as the amount you lose on agents fees and stamp duty.
Might be worth thinking this through.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958I agree with Derek. However If your prepard to downsize then I would consider selling and renting.
How much equity do you have and how much is it returning in this current market?Considering you live in it. It is more then likely dead money not returning anything.
ie. If you own 400K you could
-bank it at 5.6%.
-Reap a retun of 430.76 a week.
-You keep $100
– Pay rent of 330.76Point being there is ample opportunity to better 5.6% out there.
Say you doubled it.
If you own 400K
-Invest at 11.2% return
– Reap a return of 861.53 aweek
-you keep 530.77
-Pay rent of 330.76.Just food for thought…..
-Thomas
“More Time To Snowboard”
Derek and Thomas thanks for replies.
Yes I have thought about all the costs involved and the initial plan was to have $50K left over for investment after all costs including agents, taxes etc. I think it is a possibility depending on how desperate the seller is for the other property but a remote one at this stage so I I’ll keep a bit of an eye out but not hold my breath.
Thomas, I was thinking along those lines but I was going to use the excess $ to invest at this stage as they would not be enough to live off yet. $50K would be the most I would be able to be left with in the downsize. And yes I had been thinking about it anyway.
You probably need to know that I am on a low income. I earn $1,100 a month and don’t plan to obtain further employment in 2006. (Lots more time to invest!).
Planning to start finding out today if there is a possiblity to get the lease agreed to before the investment property was ‘created’. I feel I have to look at this option because the rental returns are so low that it is hard to get an established property to return anywhere near a decent return.
Sandy
Will be attending auctions soon of the type of property I’m seeking to see what the market is prepared to pay in today’s climate.
In addition I’ve found that there is a shortage of quality rental stock but having crunched some numbers I’ve found that it is the costs that really need to be carefully looked at to make the real estate viable (obvious I know but so much more important today than 1 or 2 years ago).
Providing quality housing may be a goer and I am contacting various suppliers to find out if I can do this at a profit.
Sorry the information is so vague but given that I don’t know who is reading this site there is only so much I can disclose as I go. I guess that is going to be the biggest problem in this commitment to keep a diary on this web site – how to tell all and still not lose advantage.
In addition, I think the goal of $100 new passive income each week is actually bigger than I initially thought (obviously have much to learn) because I am effectively talking about creating about $100,000 new value or new cash.
Oh well, nothing like a challenge to get you going in the morning!
Sandy
Enjoy the process and the journey… it will be tough, but there are people out there who have done it, so it is definitely achievable!
Thanks for the supportive words ecatt.[hair2]
I’ve had a look at blocks of land and have spoken to some builders.
I’ve done the numbers and have found that it may be a possibility to borrow the full amount against the value of my home (scary already) build a house on a vacant block and sell within 8 months and keep the difference.risks:
uncertain market
all the $ risk is on me
may not get the house ‘product’ right which will erode profit. etc etcBut I think is could be a possibility if I can get the land at the right price. So see how I go.
The profit will not be huge but given that I won’t be putting any of my own capital in, then it will be ok provided I watch the costs carefully.
I’ve also started to think about my strengths and weaknesses so I can at least start with what works for me and expand from there. As Steve says, start with yourcore knowledge and expand from there.
In addition I’m not looking at this whole property thing as ‘property’ because for some reason it seams daunting to me – big dollars involved, fancy terminology etc all strange to me.
So I’m looking at this whole thing from a different perspective. When I was working full time I worked as a product manager.
For those who have not heard of this job before it involves looking after a product(s) and analysing opportunities, creating product -including analysing costs and revenues), preparing a product release, releasing it to market and then review of results to assist with next time.
Given all this was easy for me, I am now looking at this property thing as just more product releases.
I’m looking at what the market wants, reviewing potential revenues and costs, creating a product (type of housing), selling (or renting if appropriate) and then review.
Looks like selling my own home to free up cash is not worth the effort – that’s fine more time and energy to put into investing.
And ecatt, I think you’re right if others out there have done it – then I can be one of them too.
Sandy
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