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kay henry
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May 7, 2004 - 11:10 am
Gatsby,
Not sure *where* to get it from, but I thought I’d let you in on a little anecdote. One of my colleague’s daughters went to get income protection insurance and disclosed that she had some depression issues. She got knocked back from that form of insurance and was VERY upset (and no doubt embarrassed). Food for thought.
kay henry
kay henry
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May 7, 2004 - 8:50 am
Lifex )
To answer a couple of your Q’s, firstly, you said:
“if, after paying off your 5 props you are making $300 a week cash. That then becomes a positive cashflow scenario. So I think we are agreeing pos. cashflow may be better once you want to retire.”
Lifex, this is what I have always seen property to be about- money for retirement, and perhaps enough money to one day own my own home. It has always been my aim to pay off properties. I won;t see them, when paid off, as “pozz geared”. I only use that term about purchse price and rental yield. So my properties will never be pozz geared, in my mind, because the purchase prices were too high for 10.4% rental yield. However, it is *possible* that my rents will increase over 30 years (retirement age) so they may well become pozz geared- who knows?
You also asked me about my plan to pay the props off. Well, as I said- wages, rents, tax returns, possibly long service leave payments, and definitely, superannuation paid on retirement. I also intend on buying more IP’s and still trying to manage my LVR, so that I am not stuck. It’s not a magical strategy, LifeX- and I haven’t really thought it out- I guess it will just occur organically
kay henry
kay henry
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May 7, 2004 - 8:05 am
Jo,
FatTony has made 8 posts. For all I know, he might be a new investor also. I was commenting on your use of the word “loser”. I don’t like that word, and I thouht it was unnecessary in this context. If you don’t think it’s harsh, ok.
A new investor is not necessarily an idit (Pisces, *mwah*) A new investor is a new person to property investing is all. If I went onto a share site and came across that heading, I would read it as I’d read all other headings. People have different perspectives on these things. Some may think the market is buoyant, others may htink it’s crashing. There’s lots to debate about the topic, instead of just calling the author a “loser”.
kay henry
kay henry
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May 7, 2004 - 7:58 am
FatTony,
Here’s an article about the price of units- there’s been some fall in some areas, but it seems like the “end of the boom (as Costello has officially called it), rather than an absolute “crash”.
http://smh.com.au/articles/2004/05/06/1083635285152.html
A question would be “how do you define a crash?”. Is it a blah % decrease in blah % of suburbs? It’s hard to know if we’re crashing unless we know how to define it!
kay henry
kay henry
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May 7, 2004 - 7:47 am
That’s a bit harsh Jo.
AusProp, interesting that you’ve mentioneed this. It’s note *merely* the demographic that has changed (although it has with an ageing population, so that has changed too). I also think the shift to apartment living and less emphasis on the 1/4 acre block style of living, will really have some influence on the market. There is so much talk of the oversupplied unit market, but people’s lifestyles have changed, and unit living has become a viable alternative (perhaps particularly for older people who don’t feel able to maintain a yard etc anymore).
Yes, land value is a fundamental, I think. And yet, so are lifestyle changes in the way people live. Think about it- the concept of units/apartments/villas/townhouses has only been around for about 40 years. I can always almost guage a population of a place if there’s units there. Really small towns only have houses- at slightly bigger, there are units in existence. (Yeah, I know, people will say this is a space thing, but it’s not entirely).
Now there are all these retirement villages for older people- looking after their needs- this didn’t exist too many decades ago, as families kind of looked after their own, or older people moved to nursing homes when they were really sick.
Younger people who enjoy apartment living now (and the gyms and cafes and pools) might, when they’re in their 80’s, find more need for other lifestyle aspects (massage rooms etc). Wyho knows? It’s hard to know what older people’s needs will be in 50 years time. But apartment livers are going to get older and I wonder how their needs will change, and if they’ll be wishing to move back to houses with gardens when they’ve lived in units with courtyards and balconies.
kay henry
kay henry
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May 7, 2004 - 7:32 am
Rags, you could put down 100k deposit but that doesn’t mean your property would be pozz geared at 40% return. What you’ve described is “cash on cash return” which is an arbitrary measure of nothing in my book, because one could put down any level of deposit- you could pay 100% of the property and receive no taxable benefits at all, but most of us are doing it for the debt, not to just pay uber-deposits.
Work out your return on full payment price and rental return. This property doesn’t fit into the 11 second thing (cute!) but it still seems like a good buy to me
kay henry
kay henry
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May 6, 2004 - 12:46 pm
Being really basic here… LifeX, from what you were saying, it sounds like you feel neg gearing provides no income! If the point (for me) is to pay off my props over my lifetime (using, for example, rents, long service leave pay, supperannuation), then I will be earning rents too in my retirement- why sell? So if your 15 CF+ props give you (for example) 100 per week (using 2004 figures here) and my 5 neg props give me 300 a week … and this is in our retirement… then you are receiving $1500 a week in YOUR retirement, and i am receiving $1500 a week in MY retirement. Why do I have to sell to release money? I would be receiving the same rents as you. If you wanted to buy something in retirement, and needed some bigger cash, you’d have to sell an IP also.
I have a VERY different idea of neg gearing than some people do. It isn’t all about doom and gloom and gnawing and grinding of teeth in the Valley of Tears. Whilst you may get a higher *percentage* yield, it is likely that a neg geared property might also be achieving an equal (likely greater) dollar yield. Your 15 props = my 5 props. What could be simpler?
kay henry
kay henry
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May 6, 2004 - 12:05 pm
Emzy- don;t gt me wrong. I don;t buy RE thinking “wonder how appallingly this one will do in rental return. Oops too high a yield- better not buy it” hehe. I guess I am just saying, it is “wise” in my opinion, to look at CG for *any* property we buy. Not *just* rental yield. For those who are seriously into CF+, I am sure they’ve also been hoping that their props would rise in CG.
I bought 2 props lat year- one in august and one in December- and their prices have achieved considerable CG, based upon bank valuations (what can I tell you? I’m stoked!) And that was on the tail end of the boom, Emzy, so CG can probably always be had, of you buy in the right location (emerging areas- not necessarily booming ones) and if the property is in reasonable condition or has some kind of special features.
kay henry
kay henry
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May 6, 2004 - 9:00 am
There’s not hate that I can see, CD. Idon’t actually feel hate ever – it’s not constructive.
CD said:
“If Mark wants to sign his thread as he does that’s great”
Yes, that’s what We’ve ALL been saying…
kay henry
kay henry
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May 6, 2004 - 8:02 am
No thank you.
And you ARE advertising. Your constant reference to god is an advertisement. As everyone said, you can advertise as you like, as long as you keep it at the bottom of your posts- like the spotters do. That’s the advertising rule on this Forum.
Jo here, aka Monopoly, asked a question, and some of us respnded to it, Marc. Had I have known it was going to become a god thread, I would have steered well clear away.
kay henry
kay henry
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May 6, 2004 - 7:29 am
Marc,
We’re not here to give you “permission” on how you end off your posts- why ask us for it? we’re just a bunch of posters like you are. As for me, I don’t care whether you have god under your name or the devil- they both have about the same level of interest to me. But it’s fairly obvious that
*you* need to advertise- I don’t think anyone cares near as much about what you have under your nick as you do, Marc.
kay henry
kay henry
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May 6, 2004 - 6:41 am
Yes, scanning the obituaries is a charming way of finding properties. Ring the bereaved and cut the small talk. Just say, “Hello Mrs Blah? I hear your husband died. Must be lonely living there for you now. Tell you what- I’ll buy the house from you and help you out… What’s that? Oh, cut the crocodile tears, will you? This will be win/win for both of us!”
kay henry
kay henry
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May 6, 2004 - 5:37 am
mcwong- fair enough question, I reckon :o) Asking how one fills in the gap of neg gearing if one loses one’s job… well, it depends on if you feel like investing is about using your own moey, or reying on other people’s… If I lose my job, mc, then I would get another one! If I got run over by a bus, then I would be dead. I am not meaning to be insincere about the bus. Seriously, I do think if one is an investor, and relies on wages to assist that investing, then if something goes wrong with the job, one just gets another one. I mentioned the bus because, if people say a job might be lost, well, we might be run over by a bus too. I just don’t get the focus on losing one’s job- there are jobs to be had and jobs to be done, and- for me- I know i have to keep earning, to keep playing RE- you don’t get something for nothing in this world, and you can;t keep playing in RE with no job (if you are an average working class type, like me).
If you have pozz CF, and you lose your job, you are still relying on tenants to pay for your mortgage. I don’t see the difference in risk. If you lose your tenants and you can’t get more- AND you have a job- you can still pay your CF+ prop off by using your wages. If you have financial difficulty- whether you have neg or pozz geared property- you are in trouble. No tenant for pozz geared = your property has no gears at all.
kay henry
kay henry
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May 6, 2004 - 4:08 am
Jo,
It all depends on a number of things. I know you have mentioned that the price of the CF+ is less, but how much less? How expensive is the CG property? How many repairs (if any) would the CF+ property require?
I do know I like the less stamp duty costs of cheaper properties, plus the smaller interest. I wa recently about to purchase a growth property, but pulled out of it due to some caution I felt. Now I have a pre-approval for a decent amount but am seriously thinking of buying a few cheaper properties for the price of that more expensive property.
Sorry I can’t be definitive in my answer. If we are looking at a “sterotype” of neg/geared (CG) or CF+ (pozz growth) and the CG is say 400k and the CF+ is 50k, it is a hard call because neither would suit me. I am more in the middle- 150k-250, and properties with some unique qualities, is more suited to what I’m looking for. These props would have a neg yield of hopefully around 7% (or up or down a percentage point) and would have some possibilities for growth. So I’m afraid, as a postmodernist, I’m not good with narrow binaries )
hehe- I hope someone can answer you better than I have!
kay henry
kay henry
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May 5, 2004 - 1:37 pm
AusProp, my friend… you said:
“most people are on this website as they want to obtain this sort of wealth.”
Glad you said “most”. :o)
Personally, I have no interest in that amount of money. I will be pleased with whatever happens in my life and whatever I have. It’s fun to be zen [goatee]
You know, Props… what I would do if I had heaps and heaps of money? I would pay whatever it cost to whomever, to take that yellow head of yours and stop that tongue waggling around. Do you know it does my head in every time I see it? [blink] Other than that, you might know that I enjoy your posts
How will you folks feel if you don’t make these tens of millions in life? Will you feel disappointed? I hope not.
kay henry
kay henry
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May 5, 2004 - 7:31 am
hehe Monopoly
If you read some of my other posts on being an investor, you’d probably know that my post was slightly ironic. I am not hugely phased by any of the taxation or IR rate changes we all have to face. It’s just all part of the landscape of being an investor.
Having said that- who only owes 100k? If you imagine a 1% IR increase (we’ve just had that) and your mortgage is 300k, then that’s $60 a week rise in repayments. It does all add up
kay henry
kay henry
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May 5, 2004 - 4:48 am
Marc,
You can continue to use whatever signature you wish. Some people sign with a business link, or other advertisement. People are free to use any signature.
kay henry
kay henry
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May 5, 2004 - 2:40 am
Thanks Simon for posting that It was pretty obvious they weren’t gonna change this month. time for us to start panicking about june now
kay henry
kay henry
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May 5, 2004 - 2:16 am
westan,
There are blatant advertisements all over the place on here- it just depends on which forum member posts them…
My problem with 1HotValuer’s post was that I am wondering what authority he is allowed to “sell” such information. I have never heard of such a thing. I think it’s an integirty issue.
1HotValuer- what is the authority you have to sell this information?
kay henry
kay henry
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May 4, 2004 - 1:20 pm
SamnGav,
You are living your own life and creating your own conditions. Steve McKnight bought property some time ago, before CF+ property was as fashionable as it is now. It might be wiser to develop your own plan, instread of attempting to replicate someone else’s success under different RE conditions.
Samngav, if you buy well enough, you can indeed create a new deposit in a short period of time. If you buy in an emerging area, there is a possibility you will get some kindd of CG on your purchase. Just because you buy CF+, you wouldn;t be presuming NO CG, would you? I bought a property at Xmas, and just got a bank valuation done today and it’s gone up by half my annual wage! That’s certainly enough for another deposit, samngav. So don’t lose hope. You can still buy well in today’s market and achieve CG enough within a few months for a new deposit. That’s IF you buy the right property (whatever that is!)
kay henry