Kay, I’m still battling to follow your logic.

Are you saying you stash excess funds into one IP at a time, THEN you use the equity for the next one, only once paid off?

7 years is a very long time between investments.

I also put excess capital into my loans, but only to draw on it when I find the next IP, not to pay off.

Glenn

I think you put your finger on it, Kay.

This is exactly why I only lasted 8 months as a PM. I tried really hard, but dealing with the “public” and being between owners and tenants – both complaining, was tough. Good experience gained though.

The tenants felt the rent was too high, the place needed renovation, paid late. The owners needed their…[Read more]

Sorry Kay, I’m trying hard to wrap my head around your approach, but it is really hard for me.

Paying IPs off is a snails approach to growth, but certainly less risky. You do this because you want to own your property outright?

While you use the banks money, don’t let the obligation of repayment give you sleepless nights. The bank only loaned…[Read more]

I’m interested in hearing the general opinion on this issue of poor PMs in general. Being on foreign shores, I’m intrigued that in the first world economy of Oz there seems to be a problem with PMs, or am I mistaken because we only hear of the complaints.

I have my own poor PM problems here and it is a case of the better the devil you know. I was…[Read more]

Hi Dingles

I just have to jump in here too. This is one of my points of view in a debate under another thread! See https://www.propertyinvesting.com/forum/topic/10276.html

In the forum +veCF is loosely used and is a relative term where the deposit can range from 0 to 100% to achieve +veCF. However, this compares apples with lemons for analysis…[Read more]

Hi Everyone and Kay

I’m back online after a trip investigating other folks IPs in the Eastern Cape of South Africa (B&B, Self catering, property market etc) with my family. Isn’t this property investment business great – a holiday turns into a clandestine business trip which is also tax deductible and my wife only briefly rolled her eyes.

I…[Read more]

Rob

In note your indignation at my 11% interest rate.

I’m in Namibia, Southern Africa, where the environment is a “leetle” different to yours, hence the strange foreign customs on interest rates.

However, I am of the opinion that there is a basic relationship to the overall investing scheme of things. Our rates are like this:
Interest:…[Read more]

Hi guys
I’m in the firing line….. which is to be expected. Thanks for all the comments, some replies:

Firstly, you would be mad to get a loan over 20 years. This creates too much of a burden. Second, why would you make P&I payments?
A longer term improves the cashflow situation. As the tenants are paying it off, I’m smiling. Unfortunately I am…[Read more]

Hey, want to buy a farm in Africa……? No hi-tech here either.

Seriously though, you can get a piece of desert beachfront view, 3 bedroom, 2 bathroom, garage for about $160,000 with about a 20% return from rental. Your risk is the exchange rate which has been a roller coaster the last few years, but right now with the world in turmoil, we seem…[Read more]

OK, brace yourselves, here it is…..

Much has been written about the value of positive cashflow (+CF), or positive gearing on an investment property. Cashflow, however, is subject to the time value of money, so looking at initial CF is a short-sighted view. The deposit payment made by a purchaser on an investment property is often ignored in the…[Read more]

Hi LifeX et al

I think we agree that the objective is to limit deposits.

What I am getting at, is that +ve, -ve and COCR are “short-term” quick methods that provide some indication, but do not really provide a reliable longer term view of any IP.

Also, +ve or -ve as thrown around on this forum seems to be a relative term. If an IP is +ve with…[Read more]

Hi Steve

Originally posted by SteveMcKnight:
Hi,

Just remember that depreciation is tax deferral, not tax saving.

In my opinion, technically tax deferred is tax saved because of the time value of money.[wink2]

Glenn

I’m still flogging this donkey:

Can I consider a property investment cf+ at what deposit level?
0%, 10%, 20%, 30%…… at 100% everything is cf+. So where is the cut-off point?

Is there a definition out there?

If I can find an IP with 0% down AND it is +ve CF from day 1, then (in terms of what I am reading all over the forum) I am a wise…[Read more]

Hi Mcwong

I agree with Kay. Life, business and investing is risky. Successful investing is about managing your risk.

If you’re looking for the basic rules to wealth creation (and avoiding the excuses) read “The Richest Man In Babylon”.

Glenn

Hi Fern

Sounds like a good little “passive” business you’re doing there, and you even have the space to develop more.

I’m amazed that web advertising alone has got you this far. We’ve been doing smalls advertising mainly, most locals don’t really rely on the web (yet).

Our advantage is we have relatively cheap labour for cleaning, so it is…[Read more]

Thanks for the useful contributions to this (flogged to death ongoing) topic.

Russ, anything close to the sea cf+ I have not discovered yet – so it is good to hear about it. Will just have to try harder.

My one question remains though.

Can I consider a property investment cf+ at what deposit level?
0%, 10%, 20%, 30%…… at 100% everything is…[Read more]

Hi Pisces

Points taken, which is why we’re considering relocation options. Still a tough choice. You’re right about living in a dream world. When one is on the inside the downhill slide is gradual and we adapt to the changing circumstances – more electric fences, higher walls etc.

However, in the land of the blind, the one-eyed is king. We’re in…[Read more]

From the above I’m interpreting the general trend to be:

+ve Cashflow IPs generally don’t show much capital growth.
-ve Cashflow IPs have brighter prospects of capital growth

I’m still in the dark as to WHEN one can define a deal (ito % money down) as +ve or -ve….? If I put down 100% it is bound to be +ve, but not much leverage there.

Anyone…[Read more]

I have had a request for more info on IRR. I am going to “doctor up” a spreadsheet that I have used might explain better how one could use it.

If anyone is interested, mail me and I’ll send it to you once I have knocked off the rough edges – no guarantees that I don’t have any major flaws in the spreadsheet, and it will not have a structure…[Read more]

Hi Pisces

So far so good here. We are linked to the RSA Rand on a 1=1 basis with our Namibian Dollar, and have freedom to transfer as we wish to RSA. We are in a common customs union with RSA, Botswana, Lesotho and Swaziland, so rules about foreign transfers are similar.

However, we live in fear of our country going the way of Zimbabwe because…[Read more]