Forum Replies Created
I get what y’all mean and thanks for commenting :o)
I am into paying off my properties as fast as I can. It makes me feel safer in case properties *do* reduce in their value. But what can I tell you? I have no cash! Some of us put it all into our mortgages. This is a strategy used by many, I’m sure. Now you’re telling me to put 5k into my mortgage and 5k into a savings account at the same time? Sorry- cannot do :o)
If property prices reduce, they will probably reduce across the board. There will, of course, be exceptions. If my values reduce, but I have paid off my properties 3 times more quickly than required, I’ll be happy.
Remember good debt and bad debt? Well, I’m up for getting into good debt- as much as I can afford, and then paying it off so I’m not in too much financial stress. Then, if I need to, I have redraw- “cash” if you will, for a rainy day
Not really very radical strategies. It just works for me.
kay henry
ricky :o)
Buying your own PPOR can be much more exxy than IP’s, depending on what you are looking for in each. Often, we want to live in much more glamourpuss places for a home of our own, whereas for an IP, I wouldn’t live in 2 out of 3 of my IP’s. But if I bought my own home, where I live, it would cost me twice to three times the amount my IP’s cost me. So I could have 6-9 IP’s for the same price as a PPOR (I live in sydney).
Like MiniMogul, I rent. I’m not completely happy with that, but the more I learn, the more I realise that for many of us haven’t been in the RE game long, a PPOR is a dream down the track.
May babyboomers own their own home. Many gen-Xers don’t. IP’s are a way to own my own home. Through investment, I can do it. To save a deposit to buy my own home, and then pay it off myself, well, I just can’t do that right now- in ten years, I may be able to
kay henry
Dear Paul… yum- 150K *licks chops*
As for me, I am over checking out the uber-cheapy ones. I don’t wanna buy myself some trouble and stress myself outthinking i have to buy a new oven, and new everything else for the place. Also, because I am not the renovator-type, I want a fairly lomo (low maintenance) place that I can not tend to too much.
Hence, I’ve decided I want apartments built after 1985 (for the depreciation allowances available) and I want then under 200k. I reckon I’d still go with SE qld for a while, as I think the area is gonna still go mad.
3 post-1985 apartments please [
]kay henry
Bill: [
]Enjo: [
]kay henry
yes- thanks to everyone! What an interesting post
More please!kay henry
westan,
I don’t think your 9.5 sounds conceited- I think you’ve done remarkably well- fantastically well, and yet you retain your humility and seem very grounded- good for you
)As for me, I gave myself 8/10- not because I’m arrogant, deluded or uppity- but because I am pleased with what I’ve done. It seems like most of us here came from humble beginnings- it’s interesting that in a post on the taxation system, so many people were calling the poor lazy, stupid and wasteful, but in fact, many of us are from not privileged backgrounds and we might remember where we came from. When you don’t have much when you’re young, to get something from nothing is an achievement.
Some people might have 100 properties and give themselves a 2/10. For some, it might never be enough, but I think it’s good to be satisfied and proud of oneself- whatever one has achieved- because it isn’t easy for many of us.
kay henry
C2, Thanks for your reply :o)
I do believe equity is like cash. So alike, in fact, that it *is* cash
)As a person who rarely has a cent in my bank account, I rely on equity to realise future financial freedom. To me, there’s not much difference in saving 20K or paying off a mortgage quickly and having the 20k in equity. I put all my money into my mortgage, and can’t imagine using that money to sit in an account as a “deposit”. Paying off a mortgage quickly reduces interest and reduces the time of repayment of the loan.
It’s comme ci comme ca for me. For others, they might want the cash in a savings account.
I am wondering how many others are like me- single income, no kids (a SINK) who don’t have much cash, but that doesn’t impede them from buying an IP. (Dovie, I hope you don’t feel this question hogs your initial question- it’s really the same as you’ve asked, and I’m sure a lot of us are in a similar position).
kay henry
Dovie, I’ll chuck in an alternative perspective here.
Investment is *risk* and if you wait to pay off your home, you won’t be investing for many years to come. But before you can probably make any changes anyway, you need to know what your house is *really* worth. Did you get a market appraisal from a real estate? (These are often inflated because the RE wants you to sell with them) or are you speaking of a bank valuation? The bank will value your home based upon past sales etc. To determine your equity, you will need to know true value- or the value your bank gives you, whichever is the latter
)You haven’t said how much you have paid off your loan in repayments over the year. If you’ve paid off extra, that’s even more equity for you!
And now here’s the kay henry opinion: :o)
As a non-homeowner myself, but knowing if I ever want my own home, I have to take some risks, and that means borrowing on my IP’s. For you, it’s borrowing on your home to get an IP, for me it’s borrowing on an IP to get a home- same story really- just done differently.
If you do have 100k equity, you could get a cheapy IP (it’s usually the cheapies anyway that achieve the pozz cashflow) and you’ll have two houses instead of one, with not much more risk on your loan.
I do not have the “sit for two years and do nothing” mentality. I believe there are always good properties to be found- in any climate. But the exxy, off the plan B-grade apartments are a disaster, in my opinion- in any climate. I think my attitude to buying now or whenever, is because I started property investment late in life, and there are only so many years one can work and buy.
Also, cash is a thing of the past- equity is cash just waiting for a purpose. Equity is the new cash
I have no doubt the others that have answered you are more experienced than myself. Ultimately though, it’s up to you- it’s your money, your plans and your research (please read more than one book!!) that will determine your actions.
kay henry
westan,
I did a bit of research on BH a few months ago. The population has been about halved- from 40,000 to 20,000 over the last few years. 20,000 is still a reasonable population.
A new local mine has opened up there very recently. There are something like 30 art galleries in the town, making it something of a potential cultural centre. Pro Hart and his son are artists there, if that means anything to anyone
)One thing about these kind of “retro” towns is that there is really no new building there, which means over-supply can’t occur. But of course it might already exist given that the population halved!
Anyone can look up a map of broken hill (go to google.com and type in “map broken hill” and check out whether a potential IP is in the area of the mines or in the township. I tend to remember oxide street- from the url of this posting- is in the township.
kay henry
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