Forum Replies Created
I would buy a couple of properties, but hay thats me…
Or you could invest it with omeone whos doing RE deals (i.e. cashflow deals not capital gain deals).
Rgds.
Lucifer_auMany people think they need a large lump sum to retire. This is false, all you need is the cashflow from either property, business or shares. I like property because it’s realtivly easy to understand, and you don’t need to use ssophisticated strategies like you do with options/futures/etc.
Check out the free ebook: http://www.theintrepidway.com/resources.htm
I think it would be helpful for you.
Rgds.
Lucifer_au“The Survey has now closed”
O’h well.
Rgds.
Lucifer_auI hate to say this but NAB is probably The worst of the big 4.
Their customer service stinks and so do their products.
There is nothing which would make me recommend them.I would move banks. There are much better ones (St George and ANZ are pretty good actually).
Rgds.
Lucifer_auI just want to say, that it is probably better to find a M’gt broker on the forum because they know about investing, where as most mortgage brokers really only know only about buying a family home.
Rgds.
Lucifer_auSteve actually got his start through “Owner Finacing” (or what is falsely termed a ‘wrap’).
He built this CF up and then diversified into other areas.
Rgds.
Lucifer_auMany people chose a wrap for a whole bunch of reasons.
In your example your assuming people can get bank finance (pensioners for example have to put down a 30% deposit, which would equal $90K in your example).
Other people can’t save for a deposit. For example people would have to save $30K (Not including stamp duty and other costs to buy the home) for a 10% deposit. Saving that much is difficult especially when the average wage is only $49K (which equals round $36K after tax).
If they tried to save them it would take say 3 years (at $10K per year (or 25% of their after tax income + they have to pay $10K worth of rent). So they would lose 50% of their income.
I did some rough calculations on mortgages in Sydney. If you took the Average house value ($560K) and the buyer took out a mortgage on the house of 80% that would mean the mortgage would be about $448,000. If the mortgage interest rate averages 7.5% over the life of the mortgae, and the mortgage runs for 25 years, the buyer would pay mortgage interest totalling about $545,200. That means he’s effectively paid over $1.1 million for his house excluding other mortgage fees, stamp duties, etc.
If property over the same time stays of about the same value (assuming a property crash and recovery) it means that the homeowner is paying about an extra $450,000. Now consider someone who rents for the same time period, starting at $300 / wk rent, scaling by an average inflation of 2% a year, the renter would pay about $499,500 in rent – which is all lost, like bank interest. Added to that would be the cost of moving every five years or so, say an extra five grand. Rounded optimistically in the renter’s favour, he pays about $500,000 rent in 25 years (squaring off other costs against the costs of owning a house) .
The difference between the mortgage repayments and the rent over the whole 25 years comes to about $493,000 which means that the asset value of the house would still mean that the homeowner has come out ahead.
Rgds.
Lucifer_auI use jaffasoft. Very Professional.
(fantastic for on the run too).
Rgds.
Lucifer_auWell your grammar will have to be better (j/k).
I think you could. But you’ve only bought one property. SiS (whos on this forum and very young) has bought more than 16 (from memory that is – Also there are of young prop. inv. that I know of who have an expanding property portfolios who are also on this forum).
If your target audience is teenager capitalists, probably not.
Yes if it is for teenagers wanting to get into their first home, yes (perhaps).
In the end what content are you going to provide?
Rgds.
Lucifer_auWhile prices might not drop, I think it will still be a very long time until property has another run like it did 02-04.
So prices to stay steady (or perhaps a slight decline) but little Capital Growth. So basically a flat market. In the short term the boom and bust scenario will stop any massive growth, and higher interest rates (medium term 06/07) will reduce demand (this will put a dampner on speculation I think).
Of course there always be some market that is going gang busters (it seems to be commercial office space, which apparently has high demand at the moment).
Of course we all could be completely wrong, but that’s the beauty of prediction!
Rgds.
Lucifer_auYes the market is slowing down and so are wraps to a degree. But in reality it is all about your makreting effort.
Rgds.
Lucifer_auI might also add, that if you spent $25K on repairs (over $3K per yr), you would make more than enough to pay for two $500K properties (@ 10% deposits) within 8 years, or lets say 5 places at $200K each.
Rgds.
Lucifer_auHow much ‘profit’ do you receive? $15,600
Property repairs? -$8,800How much do you have left? $6,800 (Cash)
Let’s say you negatively gear, and the same thing happens.
Net profit -$300 per week, so that equals -$15,600.
Property repairs equal -$8,800How much do you have left? -$24,400
Can you easily afford $24K (and were talking cash here, not phantom cash flow)?
You could of reduced property repairs with landlord insurance. So your repair bill could have been significantly reduced.
The way I’m looking at it – you’re still further ahead.
As for relying on Capital Gains, it’s nice but it can take a real long time for it too happen (just watch how long it will take before we have our next property boom – 8 years or so), Running the figures until the next boom:
Negatively Geared: -$124,800 (over 8 years)
Or
Positive Cashflow: +$124,800 (over 8 years (cold hard cash!))
I know which one I would rather have.
Rgds.
Lucifer_auJust a quick tip, there are lots of ways to reduce any tax you have to pay from RE. First you can use depreciation, any repairs, traveling to and from the property, meetings with advisors (accountant), seminar and books (on property), etc.
So as you can see you can reduce any taxes you have to pay quite significantly. You just need a good accountant.
I’m sure Julia from Bantacs would be able to help!Rgds.
Lucifer_auYou could always wrap to make properties CF+. In fact their are a couple of people doing it in Sydney of all places!
Rgds.
Lucifer_auMe managing properties???
It gets a bit hard when your nearest property is 2 hrs away BY PLANE!!!!
And really I don’t even know how a toilet works (you press a button and it flushes!). So I’ve got no idea how to fix one anyway…
So I will disagree with Mr T Reed. There are excellent Property managers out there – Otherwise I wouldn’t be here… I would be trying to fix a toilet…
I agree with Mini – John T Reed, works on fear.
As for the points he makes (on Dolf De Roos, I did not read the R.Kiyodsaki comments), some are valid (for a US book he probably should of called property instead of real estate, etc), but two things – 1) His primary goal I’m guessing is not to write books, its probably to invest in real estate. 2) Out of 150 page book he has managed to extract 50 sentences that he disagrees with. 50 sentences out of 150 pages (sorry it’s actually more like 160 pages…).
And many of the comments he makes are debateable, and can favour of Dolf De Roos,just as much as J.T Reed. For example, Dolf writes: Never put more than zero or very little down p. 151; Reed counters: Many successful investors always put 100% down. Well I think I’m doing okay because I’ve retired, and I have never put 100% down, I try to get away with the bare minimum (5%). I think any investor dislikes to tie up large slabs of cash, I know one investor who owns over 100 properties and she always puts down the bear minimum. Most investors want to put their cash down and get as much back as soon as it is possible, you don’t do that buy putting down 100%.
Or another debateable that could be in favour of Dolf De Roos. For example, Dolf writes: says plumbers and such will always work on your job first if you pay their bills the day you receive them. claims this is a “foolproof method†p. 120; Reed counters: In my experience, subcontractors expect to be paid when they complete the job—before they leave your property.
Well guess what, from the invoices I have received (and from a couple of friends who are tradies) every invoice with payment in 30 days. I know some don’t, but I know alot who do (I worked with a property maintenance guy when I was young (painting, demolishing stuff, etc) – and it was 30 day terms). My property maintenance guy said on a couple of occasions “do a good job on this, because we get paid as soon as we finish this oneâ€.You could go on and on, but whats the point… It simply wastes peoples time.
(For more check out MiniMogul’s post).
You could show similar ‘problems’ in any book (War and Peace included!).I think what I most dislike about John T Reed, is how he puts others down to sell his own (multiple) products.
And this is how pathetic it gets with John T Reeds B.S. detector.
13. No index -GuiltySo Dolf De Roos doesn’t include an index and some how that means Dolf somehow is a B.S. artist?
Well there is a book called ‘The Millionaire Next Door’ and there is no index in that book. Well I guess T.Stanley (Ph.D) & W.Danko (PhD) must be B.S. artist too (if we go by John T Reeds “testâ€). The book is a statistical analysis on America’s millionaires.
As for J.T Reed being the saint he proclaims to be, I leave you with the title of one his books: ‘How to Buy Real Estate for Little or No Money Down’.
Now My B.S. detector is going off!Rgds.
Lucifer_auGet a good broker (TerryW is good, as are others on this forum). I don’t suggest you go straight to a bank, as really in my opinon a mortgage broker will get you just as good a deal (and you don’t even have to pay for them!).
Rgds.
Luicfer_au“but the reality is these books contain fictional and unsubstantiated stories, experiences and methodologies which can be misleading.”
And unfortantly I have become independantly wealthy from them…
Rgds.
Lucifer_auI would stay clear of inner city appartments thts for sure!
Esp. with a huge influx of appartments comming on to the market.
Rgds.
Lucifer_auBy the way the Student loans work great in NZ – Here in Aust. we have HECS, etc so it’s harder to get these loans.
Rgds.
Lucifer_au