I think it all depends on your goals. If you want to take a holiday in a few years then terry’s example makes perfect sense. If you want to purchase another IP then paying off some of the principle can’t be a bad thing because then you will have equity to purchase your next property. Whether it’s cash or equity is amounts to the same thing. Having equity means you can borrow 100% plus fees if necessary and claim a tax deduction on the new loan. Having cash means you borrow less fo rthe new property but at the end of the day your total debt will be the same.

Am I wrong?

Hi David,

My wife and I sound similar to yourselves, we built a house in Sheidow Park in 2004 when we were both 24. Lucky for us we’d bought the land 2 years earlier and it had increased in value nicely by the time we moved in. We also now own an IP in Elizabeth, not the best area but we’ve got good tenants and are in the process of sub dividing the land which should enable us to purchase another property later this year.

Which ever way you decide to go, my advice would be not to rush into anything but definitely do something. The longer you wait the higher prices will be and/or affordablility will go down making it harder for you to enter the market IMHO.

My wife and I have just enrolled in the next RESULTs program and can’t wait to learn from our mentor and everyone else who participates. These forums and talking to anyone and everyone you can are a fantastic way to learn and get feedback on your ideas.

Good luck on your journey.
Mike

Hi All,

Did anyone see the news story earlier this week about the Aussie investor who got seriously burnt in buffalo? He bought a property off eBay, sight unseen, for $11k (or there abouts) which is amazing. Even more amazing (or not as the case may be) it turned out to be in the worst house in one of the worst streets in buffalo and was an absolute dump, the previous owner had just painted the outside.

Previous advice on doing your homework would be well heeded and if you’re going to make the move o/s do it properly and visit your country of choice.

I think the closing comment from the reporter were “If it looks too good to be true, it probably is”

Cheers
Mike

Hi Dave,

it’s not easy starting out but you’re young and eager so there is lots of hope for you. I’m suprised you haven’t been able to find any ads where they quote the sale price and rental amount. 5113 (postcode) is an area north of Adelaide that has a very high percentage of rental properties (opposed to owner occupiers).

It’s not the best place in the world but you will find plenty of ads with the rental yield shown. Trust me when I say they won’t meet the 11 second solution and I’m not saying it’s a good place to invest but you may have suburb or post code near you that also has a high rental market. These areas are the ones that are more likely to advertise the rental yield as well as sale price.

So try searching 5113 or somewhere you know and maybe you’ll have better luck.

Happy searching
Mike

Hi Andy,

with my FI I don’t have to change products if I want to fix the rate, they just do it. The only time it costs is if more money is required (or you want to from fixed back to variable).

I would think you could get a 3 yr fixed rate (my lender’s is 6.65% at the moment) very close to the variable you are on now so the comparison rate should be the same (unless I’m missing somthing).

As to whether you should do it? As others have said it’s a decision you and your wife need to make, in your circumstance it probably makes some sense but that’s just IMHO.

Good Luck
Mike

Hi MM,

I asked that very question on another thread, seems I’m not the only impatient one!

A few people said to expect it on Thursday, but as they say – patience is a virtue.

Cheers
Mike

Hi Barbara,

you may have missed the boat on the Virtual Kickstart program (possibly one the admin guys can confirm) but it’s a series of emails with resources provide by Steve. Mainly downloading info of DVD’s of Steve presenting his advice, very valuable stuff. The “homework” people mention is about completing the templates that accompany the DVD’s, in the last instance the viability of a purchase made by Steve and Dave. We’re yet to receive the answers so we’re all keen to see if we were right!

If it’s not too late I definitely recommend signing up, otherwise keep your eye out for the next course..

Cheers
Mike

Hey Ronald,

a little off the map (my wife’s in Sydney thu work so I have to fill the time!), but my parents live in Agnes Water. Things have just gone crazy there over the last 3 or so years (maybe longer), they run a resort (www.edgeonbeaches1770.com.au if anyone is interested) but bought a block of land in late 2002 which more than doubled in value before they sold it in mid 2005.

I only wish I was in a position 3 years ago to buy in their complex because people are cashing in now by selling their units at more than double what they paid. The frustrating part for my parents is that the new owners don’t complain as much as the ld ones about the returns (go firgure!).

As for Gladstone, I hear it’s nice this time of year………[biggrin]

Cheers
Mike

Hi Matt,

After reading Steve’s books (if you have) I’m not sure how you could be in favour of a negatively geared buy and hold strategy, although we are not here to cast aspersions.

I would tend to agree with the first two post in regards to increasing your equity (or profit) in some way, although Julie makes a good point about using both of your FHOG’s.

We recently bought a house on a corner block in Adelaide’s northern suburbs for $102k which we are in the process of subdividing and hope to sell the resulting block for about $50k (approx $35k profit). I think this was a reasonably rare find and am sure that Melbourne prices are higher than Adelaide but I just want to get you thinking about your options.

Cheers
Mike

Speaking of Steve, I completed and returned the templates last week but am yet to receive another installment. I have in the mean time changed my email so can anyone advise if they have received further communication (other than the reno DVD which I did get)? If others have received further emails then I’ll have to get onto the gang.

Cheers
Mike[exhappy]