Forum Replies Created
A well balanced view and portfolio Minimogul. I may have to stop chasing the fast track properties if I am going to grow my portfolio further. I certainly will have to look outside Vic as Land Tax is starting to became an issue.
Beancounter quick sums suggests the property you are looking at is returning approx 7.2 % gross, which is above the current lending rate. In the next few years when rates eventually go up, it is possible it may go from positive geared to neutral and possibly negative geared (All hypothetically speaking, not your individaul property).
What percentage of positive cashlow do most people look for? I have read a lot of posts from people purchasing in regional areas getting fairly high returns. As a norm properties close to the city and or near beaches tend to offer low returns although from what I have experienced much greater capital appreciation. I am more happy to have a lower yield neutral/slightly positive geared in the city/bayside beach areas where in the country I would look for a much higher yield (again hypothetical as I don’t own any country properties).
My long winded question/statement is what yield (percentage) do people tend to look for at the present time to be positive geared in the city and in the country?
Thanks for the advise everyone. Caddy 222, I like your idea of a risk management ledger. Although I do not have a formal blue print, I do have planned exits/solutions.
Fortunately touch wood, I have had no vacancies in the past 12 months. My properties are slightly different to the norm in that I have purchased them to subdivide and in part develop which will release the true value of the property. I have experience in this area and I am confident of the outcome.
Home Loan Guy you made a comment about being rent dependent and how some banks look at that. Surely most IP investors once they get beyond $500 K to 1 million in debt are rent dependent. My understanding of most IP investors today is that they are in debt to their eyeballs although they may have a good LVR. You also mentioned not exceeding 80% LVR, do you mean 80% across the board, ie my whole portfolio including my own home used a security or each individual IP?
Thanks again for the comments.
All good debt, no car loans and I pay my credit cards monthly. I guess my wotif worries stem from the fact that my debt service levels have now exceeded my employment income (rental income not counted), which in the past I have used as a fall back if things go pear shape. I have reserve funds if I need them I guess I just don’t like owing so much money, which is envitable in the IP game. Surely I am not the only one with these concerns.
Mensch,
Your example of GST payable, is it correct that you pay the full amount of GST on the sale ie one eleventh of the whole cost. I understood that the GST would only be on the difference between the original purchase price and the sale price. Not to mention exemptions like going concern and the margin scheme etc.
Thanks for your reply Mensch.
I own a couple of flats and an office and I am just about to purchase another investment property, when I read the article on trusts and reference to Steves book.
Do the books have to be specific to educating you on investing or can they be anecdotal stories from property investors ie this is the way we made our fortune etc.
Thanks again
