How are you everyone?
I am new to the forum and to the whole investing thing. i just turned 20 and i dont have a single property. My plan is to have some this year or asap. I have been reading a few books “get real, get rich” and ” 0 to 130 properties in 3.5 years.” and they seem to have to different points of view…
whats better negative gearing or Possitive cash flow…i do understand the difference; what i am not really sure about is which of the two allow a portafolio to grow quiker and bigger.
ps.
I have looked for properties that give a possitve cash flow and to this present time i have not seen one…i think my chances are to go for negative, even though i am a bit afraid. should i be?Please someone out there, let me hear your thoughts and ideas…thank you for your time.
Felipe Palacio
Hi Felipe,
The question has been hanging for a while now so I’ll open discussion.
There is no clear cut right or wrong answer as individuals have different circumstances that necessitate an individualised approach.
For me – growth is the key attribute that I chase.
Good research and considered decision making will assist me in achieving this aim. If I buy a growth based asset and I need to contribute some money on a regular basis all I need is to achieve growth greater than the amount I contribute and I consider myself in front.
Obviously higher income earners do have a tax scale advantage when it comes to negative gearing so this needs to be considered in any decision making process.
Other will advocate an cash is king approach and will make just reasons for this opinion.
Ultimately you need to determine what your end point is and which growth or income or combinations thereof will get you as quickly and as safey as possible.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi swifteagle,
and welcome aboard…. First, can I say there are literally HUNDREDS of ways to build wealth in property. I think it is worthwhile for you to consider where you are at, and what you need to “move on”.
Let me explain – if you are on a lower wage, with little chance of buying (and holding) without having the investment paying its own way, then “positive geared” is possibly the best way for you.
But, if you have a wage that has a lot of slack dollars that are screaming out for an investment (rather than buying “the latest flat screen TV with coffee-maker thrown in”) then negative geared might be better for you. (sorry Steve [exhappy]) Buying in “better” suburbs has its own reward – though maybe not immediately……
First off, though, I should say to spend some time EDUCATING yourself before launching – this forum has a wealth of information that will give you some useful ideas (and some of them will “ring bells” with you).
In the end, it’s gunna be YOUR decision, so go for a decision that suits YOU. For some, negative gearing is good – for some, positive gearing is good. Both work (imho)
Steve has a quote that makes a lot of sense – “success comes from doing things differently” I take this to mean “look for THE DIFFERENCE that I can make in any investment opportunity – e.g. can I convert this little 2 bdr cottage to a 3bdr house? Or, can this 3bdr with no garage be better suited as student accomodation (and can I make this happen?) Or, is this ugly, tired, shabby property able to be transformed with a couple of weekends work (and a barrel of paint)?
In the end, it’s up to you – what can you see? And what can you DO ??? Read a bit, swifteagle, and don’t be in too much of a hurry – you have a LOT of years on your side. Set a realistic goal relative to your age, then work to make it happen. Good luck,
Benny
Hi Felipe,
We try and go for those properties that exhibit both good histories of capital growth coupled with the ability to more than pay for themselves.
Why not have both ??
Do the beasts that you describe need to be mutually exclusive ??
Being an astute teen apprentice investor i would suggest watching “get rich or die tryin” that just came out in cinemas this week, it tells the tale of someone who is time poor, money poor and upgrades to a time poor money rich individual.
Positive cashflow is the way to go[biggrin]
Thanks…
Today i would like to thank those who have donated some of their time to guide those in need of help.
Thanks for your time and comments.Felipe Palacio
<No trawling for clients permitted> Derek
Positive Results | Educating Property Investors / We Find Houses
http://wefindhouses.com.au
Email Me | Phone MeHelping You To Invest With A Purpose To Finish With Successful Results
hi Swifteagle
I would go for capital growth over cash flow in the first instance and use the capital growth to buy a positive cash flow item ie comm to off set the short fall in the negatives repayments its called double investing it a chicken and an egg which to get first.
if you can negative gear and then latter use that equity to leverage off to the next level.
I must admit there are alot of other ways and if you read around a couple of post you will see that will fuel you a little quicker then thislook at positive development projects, no money down in an area with 20%+ growth.
but thats my .002here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]
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