Forum Replies Created
Hi Mini, could i please jump on and get your lawyer’s details? I hope to get something there when i go over next month and i have everything in place that you recommend!
Please send your lawyer details to feral’at’ekno.comCheers,
AlisonI agree – walk with your feet.
Agencies are valued as a business by their rent roll; so by taking your property off them and reducing their rent roll, you have devalued their business.
Queensland is like another country with the mindset a lot of the locals have – usually more conservative and provincial in their outlook.
I reckon they’re great people even though they refer to us southerners as “Mexicans” because we come from south of the border [
]The 11 second rule/solution is calculating whether a property has a gross yield of 10.4% or more.
Hi Kym,
1) No, neg gearing is NOT a bad idea per se.
This website is biased towards +ive cashflow, so you may find some replies will be biased towards this. If you want to get some excellent info at a more diverse forum, check out Jan Somers at:http://www.somersoft.com/forums/
Somersoft is Australia’s largest forum and has a lot of industry experts who visit the board to give excellent advice. Some also moderate on the board including accountants, quantity surveyors, professional renovators, neg gearers, pos gearers, wrappers, flippers, real estate agents, developers – you name it.
The MSN forum is also more diverse but has less members. It can be found here:http://groups.msn.com/PropertyInvestment/messageboard.msnw
With neg gearing, the higher your marginal tax rate, the more benefits you will get. As some have said, neg gearing is usually done with properties that will achieve high cap gains. Because rents haven’t kept up with property prices, yields are lower which means you may have to neg gear unless you can put up a decent deposit.
Properties that are cashflow +ive are usually found in rural areas with minimal/nil cap gains. You also must remember that if you want to increase your wealth (assets minus liabilities), you’re better off investing in property that has high cap gains.
If you want cashflow, invest in these rural areas and you may get a return of about $1k – $2k per annum – which you have to pay tax on.2) cashflow properties are easy to find. Do a search on http://www.realestate.com.au for properties under $100k and you’ll find loads.
3) Anything with a gross yield of about 10% or more will be positive.
Good news if you’re in Melbourne and want to attend Steve Navra’s seminar.
I am delighted to inform you that the next course is scheduled for Saturday 12 & Sunday 13 July, at the Rydges Riverwalk Hotel, 649 Bridge Road, Richmond VIC 3121.
The course runs from 9am to 5pm on both days, and catering and parking are included in the price of $286.
Reply here for details on how to make a booking.
Read the bible:
“More Wealth from Residential Property” by Jan Somers.
This is the book that started it all and has the best info around. Written by a Queenslander for Australian conditions, Jan tells you how to invest in property and retire from it.
It is particularly good for the newbie investor.
Also have a look at:
http://www.somersoft.com/forums/Sounds like this article?
http://www.jenman.com.au/NewsArticles1.php?id=1This thread will be deleted soon because it goes against what Steve is trying to sell, but i’ll post it here again for those who may not have seen it. I posted a thread about it a week ago, but it was promptly deleted so you may not get to see this at all…oh well. So much for a “forum” to exchange ideas and opinions.
Have a look at this link for a story of someone getting ripped off by a wrapper:
http://www.jenman.com.au/NewsStories1.php?id=37“Some wrappers are now teaching the secrets of their success – for a hefty fee. And so we now have the spectrum of naïve investors encouraged to enter into unethical and exploitive schemes.”
http://www.jenman.com.au/NewsArticles1.php?id=11I’m not saying i disagree with Steve charging thousands of dollars to people who aren’t informed about investing, so please don’t come down on me about that.
I agree he has to make a living, and that running seminars is a better money spinner than vendor financing at a 3% margin… i’d be doing the same if i had the courage.
Hybrid trusts are the best option for people who wish to negative gear as you cannot get these benefits through a discretionary trust.
This is a dodgy part of St Kilda and you could do better for your money. It’s an extension of Grey St which is where a lot of Natasha’s streetwalk, and has lots of old blocks of units.
I think St Kilda is a great part of Melbourne and is a classic example of a suburb that has come full circle from a place that used to be where the rich went for a seaside experience, to going downhill in the 1960’s and 1970’s. It has come back into favour again because of it’s excellent location and lifestyle. You have the beach next door, excellent public transport (trams, buses and trains), Albert Park nearby and the city about 4-5 km away.
St Kilda West is a much better area that borders Middle Park and is bounded by Fitzroy St, Beaconsfield Parade (the beach) and Canterbury Rd.
Leafy streets and lots of period homes have made this area sought after with strong cap gains.
I’d be looking around this area for something better quality and potential for good growth in the long term.Hi,
In the strict sense of the word, wealth to me is defined as assets minus liabilities.
However, financial independence is the key term and it is the ability to choose whether you want to work or not. It is the freedom to pursue your interests and hobbies without worrying about how to pay for the bills and groceries.
Ideally, i’d like about $1,500k a week in the hand to achieve my lifestyle of freedom and choice.
This will hopefully allow me to eat out 4-5 times a week, maintain a decent car and motorbike, and 3-4 overseas holidays a year.
To get an income like this, i’ll need unencumbered assets of about $3m returning 5% per annum… something that is realistically achievable.
If you’re after growth, you’d be better off investing in an inner city house as BDM suggests. You can get a decent period house for about AUD$500k in some of these areas that will show excellent growth if your view is medium to long term.
Remember that land appreciates and buildings depreciate.It’s very highly unlikely that you’ll achieve any strong gains buying units OTP and then reselling as you’ve done in Spain. There is a property boom going on in Spain at the moment and i’ve heard prices in Barcelona have gone crazy in the past 2 years. Don’t expect to repeat this experience down under.
As a foreigner you may also be subject to the FIRB which may limit your choices.
I have to agree with G-MAN007, and would steer clear of these country towns with little chance for cap gains. To get a decent income you’d need about 30+ of these properties! Imagine the headaches with property management and the tax you’ll be paying.
I prefer unrealised gains that are compounding and aren’t subject to tax (CGT) unless they are sold. This is achieved through growth and is the basis for true wealth.Wealth comes from capital gains, not cashflow. True wealth is often defined as assets that exceed liabilities – and is achieved by capital gains. Cashflow is all about taxable income.
I’d rather have 5 tenants than 10 any day. The tenants you attract in low end properties will often treat your property as “low end” and the rent will also reflect that, often being paid by tenants on Centrelink benefits.
You need to look at the net yield.
Forget about the 11 second solution which is simply a 10.4% gross yield.Divide the annual rent by the purchase price and multiply by 100 to get the gross yield.
To calculate the net yield, deduct the outgoings from your rent figure.You need to consider the big picture and not get bogged down on whether it’s exactly a 10.4% gross yield.
Consider the opportunities for cap gains as well as adding value to the property, and always make sure it’s well located so as to attract tenants and minimize your vacancy rate.
Any property within 5km-10km of the CBD will show good cap gains if held for a term of at least 5 years.
Remember that real wealth is all about equity and NOT cashflow.
Hi Ishta,
I think that’s a great return at 9.6%, and i’m sure you’ll find it IS cashflow +ive if you do your sums again.I’d also go with Interest Only finance, try and add value to the property, and then increase the rent by $10-$20 pw after 12 months.
Hi Andrew,
I’ve also read a LOT of property investing books and i also agree that Jan Somers has written the “bible” on investing in property for Australia.I’m sure Sooshie would also agree? [
]… unless she can name another great book that sums it all up so succinctly.I also think about 25% is OK to allow for rental income expenses. In fact it can be much lower depending on maintenance, outgoings and vacancies.
]
]… unless she can name another great book that sums it all up so succinctly.
