Forum Replies Created
Could it be called Negative Geared with Positive Cashflow????
How To Create An Income For Life by Margaret Lomas goes into this in great detail.
Ally
ENJOLady,
I have been pondering this question lately, and have decided to just go ahead and ask. What exactly is ENJO?
Someone was telling me about a brilliant new cleaning system called ENJO sold via Party Plan?
Are you affiliated?
Ally
MJKMJK
I am struggling to get my first +ve cashflow property. The thought of needing another 49 makes me shudder.
I have just finished reading Jan Somer’s Building Wealth in Changing Times, having ready her first book, Building Wealth through Investment Property some time ago. She manages to make negative gearing sound OK. You only need say 12 properties, because you are relying more on capital growth. So if it costs you $50 per week out of your own pocket, to my way of thinking, that is forced savings. Better that than takeaway food, and junk for the kids. As years go on, they will gradually turn positive.
Confused.
Ally
MJKMJK
I am fairly new at this, but what I have gathered from the pro’s by visiting forums, is that is not advisable to cross collateralise if you can help it. I was advised to use my LOC for my PPOR for deposit only (+costs) and then take a separate stand alone mortgage. However, I don’t see that it has to be with another institution. Why complicate things, unless you can get a better deal elsewhere. Just a separate loan. I will split my LOC into a personal portion and an investment portion for tax purposes. I hope I have understood this correctly.
Anyone else with more experience?
Ally
Hello 111111 (is that enought 1’s?)
I am also interested in the Cairns area, but am slightly put off by the distance factor – I am from Sydney.
There has been recent discussion about purchasing in Cairns on the msn property investment group forum. Have you seen it? Worth a read.
If I am to spend $500 on airfare (x 2 for partner) I want to be pretty sure I can do a deal up there.
Where are you from, and are you planning on visiting the area before you buy?
Ally
Thanks guys for your input. I am attracted to Logan because of the infrastructure and the positioning of it, between Brisbane and Gold Coast. Plus it is a capital city. I think I would feel more comfortable investing in a capital city, even if it wasn’t a fantastic yield, because I feel more sure of capital growth. I suppose each to their own, but I just can’t warm to the country towns idea.
I also believe that if you have already read about it, or heard about it you are probably too late. I think I will investigate the area more.
Thanks
AllyBeing a Sydneysider and looking for +ve cashflow is difficult, I feel. I have found one property in Cairns that passes the 11 second test, but it is not exactly a matter of jumping in the car … I have found other +ve cashflow ie: Brisbane, but that depends on depreciation to make it +ve. On this site I have seen little mention of the depreciation factor. Does Steve advocate only +ve cashflow before depreciation is taken into account? Having said that it seems alot of the properties he may have acquired are older, hence little depreciation. I was using the Margaret Lomas strategy and her software to test +ve cashflow. I must admit I was estimating depreciation when I found some +ve properties. Anyone else have any comments on the effects of claiming depreciation? Any other Sydneysiders feeling the frustration?
Ally
I am considering Brisbane also. Not knowing the city I went to a bookstore and bought a couple of maps of the city. They show major roads, rail, shops, hospitals, uni’s etc etc. It has helped somewhat, especially since I knew nil about which suburb was where. I then went to realestate.com.au and began my search. Hopefully you can get some maps in Singapore, or ask a relative to post them over.
Regards
AllyHi Bruce
I may take your advice and begin a thread to see if my gut instinct is right, and jump right in with both feet, or if I should wait until the time is right.
I appreciate you taking the time to reply. The accountant, who was recommended to us, doesn’t even own their own home, but prefers to rent? He also recommended to my newlywed cousin to save more and not purchase their first home with only a 10% deposit, despite their good incomes. I think living in Sydney you need to get into the market as soon as you can. His advice is that it will soon become a buyer’s market, especially if interest rates go up, and some peope find themselves in over their head.
More food for thought.
Ally
Dear Donald
We purchase our PPOR in Kellyville last April for $470,000. In November the house behind us sold for $600K and now a house down the road is for sale for $650K. I had a sticky beak and all I can say is ours has to be worth around $550k. They say the market is slowing, but I can’t see any sign of that in the Hills. We sold our home in Kings Langley for what we thought was a great price, but now it is not unusual to see homes there for %500K+ and anything under $350K – forget it.
I think Kellyville does have infrastructure problems, although since Woolworths opened late last year me and my neighbours are so pleased not to have to travel so far. New schools being built also. Don’t forget there are plans for Mungerie Park which will be huge. When Windsor Rd is upgraded and the railway installed, the sky will be the limit!
With Kellyville there are also lots of estates and some parts are more desirable than others. Also, part of it is in Blacktown shire – called Kellyville Ridge, although they are still getting great prices. I believe it is a great place to live, and there is potential huge capital growth, however you wouldn’t find any +ve cashflow investment properties around here.
The RE Agent selling the prop down the road tells me that the people who buy in Kellyville are those that can’t afford Castle Hill! I guess that’s us.
Hope this info is useful.
AllyThanks Mike, for giving me some confidence. We saw an accountant who said he would prefer to see us pay off $100K from our PPOR loan before we buy an IP and his suggestion was to spend say $500K in the inner city area of Sydney? I was really down after seeing him, but I think now he was a very conservative person, and possibly not the best accountant to use when we purchase our first IP. Why am I saying conservative – $500K loan for one property !!! That seems in total conflict to all advice I have read on this forum.
Ally
Hello Tails
I was interested to hear your Uncle’s story. However there is one point, and that is the starting point, that really worries me. He advised to pay off your PPOR fully first? If I do that I will be here till doomsday. My partner earns a great salary, but on the downside we have a substantial mortgage. If we can service a loan for an IP why not start now? Do you think his method was too conservative for todays era? Isn’t it a case of the sooner you start the better? Any investment debt is not bad debt? If you have a +ve cashflow property, surely this will help pay off your PPOR quicker? Does anyone agree?
Ally[
]Hi all,
Regarding what Mike Robinson said about the city cousins … I am one of those city cousins from Sydney. You do become conditioned to the outlandish prices commanded here, so when you go to realestate.com.au for example and can find whole houses on decent blocks of land for $100,000 you can’t quite believe it. You think they must be falling down, or beside a railway line or something. I am suspicious by nature. Secondly, you are then surprised someone will pay upwards of $150 or more a week to live there. Why don’t they just buy it themselves! (Hypothetical question – I know why some people need to/desire to) rent.
I will try not to be so skeptical about country properties. My Dad lives in Dubbo and has done very well out of an IP he had there for the last 10 years. Living proof.
Hi there Gracie
I am a new member to this forum, although I have long been a visitor to this and other forums regarding Property Investing. I live in Sydney and am looking to get into +ve cashflow IP’s. As you will know the major stumbling block is that there is nowhere in Sydney (that I know of) where this is possible, therefore I am forced to look outside my own area ie: QLD. I am nervous about purchasing so far from home, and think it would take a week out of annual leave to visit the possible areas and inspect suitable properties. Although I do know some people purchase solely based on the numbers and a property inspection, I feel at least in the beginning I would like to see the property and get a feel for the area? Do you or any others feel the same frustration?
For example, I found some +ve cashflow in Forest Lake, Brisbane, but then read a warning on one of the forums about this suburb and a possible glut of rental properties?
Is anyone else on my wavelength? I feel I also need someone to bounce ideas off, as my husband is happy to provide the funds, if I do all the footwork!!!
I hope I’m not the only one ‘out there’ to feel eager but scared.
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