HI Chris

Everyone’s situation is different, you would have lots more to consider than just the “1% rule”, that’s for sure. Have you read investing books? Lomas, McKnight, etc? and scroll through the forums here as well and you will find heaps of info, different scenarios and people who are generous with giving advice/sharing their point of view.

Hey Phorsha
If it’s any comfort, i am aware that property managers in Perth/bunbury area are a lot more expensive than what we were used to paying here (in and around Brisbane). We were surprised too, and tried to find a better deal, but didn’t really get anywhere with it. It was a family member’s property, I did the bookkeeping for the property.

GOM, or anyone(?)
As you mentioned SQM above, have you used their “home discount reports”? Just wondering if it is of value if one is researching an area?

Thanks

Hey, if i could find a PG property that wasn’t mining town, we i would definitely buy it in my name, or do a trust. Just not confident enough to buy in those areas at the moment.

You have started to pay off your capital on your IP’s? Good for you if you already own your own PPOR outright. We are still working on ours, so our investment loan is interest only.

You are right, It is better for the depreciation the newer the better, but it doesn’t have to be brand new to get a good depr, I believe a renovated place would also get you a good claim, and there are probably other considerations or variables.

The thing is, for us, better to have CF+ than nothing at all. Not interesed in a big negative gear as it will handcuff us for future borrowing.

The other thing is yes, you do have to think longer term and what your goals are. Putting just in the higher earner’s name means you have to think about what that will mean when and if you go to sell – ie you make a Capital Gain and you will pay more tax then ( also the more deprciation you claim, the lower your cost base to reduce your Capital gain). And as you said when it turns around and becomes positive gear, you have considerations there. Most of the ones we are investigating look like they are several years off a true PG.

So there are many variables for sure, to consider and I think our strategy will develop as we go along.

I believe that technically, positive gearing is when the income is greater than the expense(implies you have borrowed, when you use the term gearing). The income is taxed. If you make a substantial cash deposit, you would likely have this situation.

Positive Cash Flow or CF+ as it is referred to sometimes, is when your rental income plus your tax breaks(maximising your depreciation) is greater than all your outgoings. A high tax bracket and a relatively new, or renovated property may help to make this feasible.

does this help?

DD, Thanks for that, we are real DIY people, but sometimes that translates into some things taking a REALLY long time to do, or worse, not getting done at all.!

ok, there are 2 Punchbowls in NSW, 2196 (sydney) 2460 (hunter and north coast area). I aasume you mean the 2196, but thought I’d better ask.

GOM
You must be pretty experienced with what to look for, and you have areas that you are comfortable with. Or do you buy all sorts of properties in all sorts of different areas? Do you invest fultime, and for how many years have you been doing this? I am interested, because i want to learn myself, and not have to use buyers agents etc. Though I do wonder if i should use one, to get the ball rolling in investing. We have had 2 IP’s and looking at 3rd purchase (seems like it was easier a few years ago, everything made money then!!). Always reading and taking in information, gather information from this site and others, books, magazines, a couple of small seminars. Tried to go with one buyers group, mentor type thing, won’t give any names, but they didn’t seem to know much more than I did, so that seemed a waste.

thanks

interesting, yes, know those areas well.

i see on your blog that you have the NSW Population projections – interesting info there.

I’m going to look for the similar Data for QLD. it seems to be there at oesr.qld.gov.au.