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  • Profile photo of jennymjennym
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    @jennym
    Join Date: 2005
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    August 27, 2007 - 11:35 pm

    I said we've had no debt for 30+ years, should have been 10+ years as we have owned our PPOR for about 10 or so years and not used the extra income on anything other than living expenses. Mind you, our repayments were only about $96 per month back then :-) We are on average incomes, ie $55K combined, enough to get us by for now even if we put a little into the IO loans. We were told about using the LOC for drawdown. I ran my own business for a while, no big deal, but I still have an ABN (not GST registered). I'm just not sure how we will pay for the loans once the LOC runs down if we can't do a no doc or lo doc loan to refinance unless the rents go up enough to cover them. Husband only has 5 years before retirement so we have a plan to increase our portfolio as much as we can before then.

    The Capital Growth looks good and if the rents do go up they should become neutral cash flow, however I want to make sure I have a plan B in place…… just in case! or Plan C…. sell…. and we don't want to do that.

    Jenny

    Profile photo of jennymjennym
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    @jennym
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    August 27, 2007 - 12:49 pm

    That was another issue that we hadn't decided on, whether to do a tax variation to increase the cash flow now, or claim it in one hit at the end of the year and put it back into the LOC for future draw downs. Guess it's six of one, half a dozen of the other whichever way we decide to go. I was looking at what would be the best, to use our own cash or OPMs ie the LOC. I'm still getting used to the idea of seeing the LOC growing bigger, as doing the debt thing after 30+ years of not having any is out of our comfort zone. However our properties are also gaining as well. Just a comfort thing I have to get used to, I guess.

    Profile photo of jennymjennym
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    @jennym
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    August 27, 2007 - 12:20 pm

    Hi Terry, I understood that this was the way of many investors who are perhaps cash flow restricted, and I'm not sure what you mean by interest on interest?

    Jenny

    Profile photo of jennymjennym
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    August 26, 2007 - 3:08 am

    Hi Nina, it's never too late and as you are only in your 40s you have plenty of time. We are way past that, my husband is 60, I'm 52 and we only started investing in IPs last year. Bought our first one 12 months ago and have just settled on our 2nd on Friday this time sharing with our eldest daughter.

    Admittedly we did have our own PPOR, but never in a million years thought we could use the equity to get into investing as we are on very low incomes and didn't want to get into debt….. God forbid…. you don't get into debt. We are baby boomers afterall. Well, so we thought!!! Now we know better. We have survived on low incomes for 30+ years and brought up 3 very beautiful children who are well on the way to investing for their future now.

    I started out reading all of Margaret Lomas' books, Think & Grow Rich and the Richest Man in Babylon are excellent for getting that mind working overtime, Peter Spann, Michael Yardney's How to become a property Millionaire in your Spare Time is also good. The Australian Investment Property magazine is also a good monthly investment.

    Read, read and keep reading.  You don't need to go to $2K+ investment seminars as there is a lot gained by going to some freebie startup ones (with the $2K promotion at the end) but you can pick up good tips and this forum and the Somersoft one are excellent too.

    All the best.

    Jenny

    Profile photo of jennymjennym
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    @jennym
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    August 13, 2005 - 7:15 am

    Thanks Mikala, Simon and Maria for your very important comments. I can see we still have some homework to do and namely getting a valuation on our own home to find out exactly what equity we have.

    We only have a couple of brokers in our city so I will endeavour to suss them both out. I believe we don’t have to go with a local broker either and as Mikala advised, to check out their commissions is a good idea. Dealing with brokers is also new to us.

    For our first IP we are looking at buying in our own home town until we feel comfortable with what we’re doing. It was probably annoying to the real estate agent, but today we went out and had a look at a couple of home opens, just to get a feel of what we need to look out for. I can now come back and reread some of the articles I’ve seen in the books and get a handle on asking better questions and looking into the nooks and crannies more closely.

    Negative gear, postive gear, cash flow, all new words to get our heads around and understand which way to go in our situation. Any advise in these areas is also greatly appreciated.

    Jenny.

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