Forum Replies Created
- Originally posted by freeman cooper:
Hi Guys,
Alright, I’ll be a smart ass again if thats ok.
Maybe we should pay these scientists stupid amounts of money to explore their theory.
I studied a bit of science and found that it seems to be the way these guys feed themselves. They come up with a theory, sensationalise it, get themselves in the media, give you some plausible explanations and ask for a grant.
Just like Darwin. After all the research still no evidence, just theory.Regards
scepticHi All,
On that note; read “State of Fear” by Michael Crichton. It’s a novel, but based on scientific evidence. Basically it is a story about Environmentalist companies which are formed by people purely for the purpose of making money – for themselves. They create an environmental issue, sensationalise it and market it to the world to attract financial support, then skim the proceeds.
It smacks of conspiracy theories but it may just be true. Scarey; but after living in L.A for the last 14 months and seeing on a daily basis what Corporate America is getting up to, it doesn’t surprise me in the least.
Remain alert and sceptical.
Cheers,
MarcOriginally posted by Dr.X:I did some courses at the REI in SA to get an agent’s license (need it for property management) one of the things they mentioned at one of the sales training courses is to always insist on a 10% deposit from the purchaser (although it is not written anywhere in the legislation).
The rationale behind it was that it is enough to cover the agents fees if the settlement does not go through.
Now we know where their priorities lie, does this actually shock anyone???
Investment Property Management
http://www.adprop.com.auNO!
By the way; I have had every agent I’ve ever tried to buy a property form tell me the minimum deposit was 10%.
When I tell them that my deposit will be $1000 and not a cent more they get rather miffed, but always accept it because a sale is a sale. Their priorities are their hip pocket.
Cheers,
MarcOriginally posted by dare_to_dream:Hi guys,
Foundation you seem to be very ridiculing of Simon quite unnecessary. He is simply giving him his opinion based on his personal experience. And in an unpredictable market the only thing you can do is base your opinions or your experience and previous history.
If you have a different opinion than you can tell the person that but that doesn’t mean you need to ridicule someone else for trying to help. You attitude is what turns people off investing! And i’m not talking about being what you think as “realistic”, i’m talking about giving people the worst case scenerios! Their are many ways of reaching the same outcome, everyones situation is different.
I am in the same position of Marlow, I have saved up almost enough for a deposit ($20,000) and now I need to know what is my best course of action. I’m thinking of moving back with my parents and buying an IP. However, that would be in Adelaide and I would prefere to invest in Queensland somewhere. Is Queenslands stamp duty and general purchasing costs a lot lower than most other states?
Cheers,
Paul[suave2]Hi Paul,
Check out stampoutstampduty.com.au to give you the different rates. Don’t let the stamp duty put you off. This is a cost of doing business, and if you are using your business brain to make decisions, this will factor into the figures and hopefully they will still stack up. As a greneral rule; allow 5-6% on top of purchase price (in any state) for all purchase costs and you won’t be too far out.
Buying in qld and living in Adelaide is not that scary. I recommend you find an area in qld, then research the hell out of it yourself to find out what is good value. You can buy without even seeing the property, but as this will be your first you really should go there, spend a month in the sun and pound the pavement. Beware of the two-tier marketing guys; get your own valuers, house inspectors and lawyers (another cost of doing business).
Cheers, MarcTo foundation;
one factor that never gets mentioned in the ‘where to invest’ argument is the fact that you can buy a property with vitually no (or little) money down.
Term Deposits you can’t do that. Shares you can’t do that. Managed Funds you can’t do that.
And the thing I love about property is you wake up in the morning and it’s still there – with shares/managed funds (think Emron, Worldcom) can you guarantee that? I think not. T.D’s are o.k – for the bank.
So when cash-on-cash returns are examined across the investment spectrum, investment property will always win.
eg; I put down $1000 (some money down) on a cheap I.P worth say; $60k (this can be done) and never put another cent into the property out of my own pocket, but fund the whole lot out of bank borrowed funds for 20 years ( the rent returns, tax write-offs make this a cashflow neutral property for me – I actually have a couple of these).
Historically, property doubles in value ever 7-10 years. So after 20 years my I.P is worth $240k. Let’s say it’s only worth $150k as there was a property crash in year 12. The largest ‘across the board’ crash recorded was 6%.
I sell my property after 20 years (I actually would never sell it), pay out my bank loan and make a net after tax profit of about $50k (it’s probably more, but let’s be conservative).
My cash-on-cash return per year for my $1000 is $2500 per year. That’s a return of 250% per year for 20 years.
Hmmm….. not bad.
And that’s not including other properties I may buy along the way using the equity in I.P no. 1 as a deposit (in other words – no money down).
Lets say ecomic times are tough, and the bank wants more deposit to protect themselves. I put down $10k as a deposit; my c-o-c is still a pitiful 25% per year. I’m crying now.
However, I do disagree with mortgage hunter here – I recommend debt reduction along the way as well to increase equity for further investing and/or protect yourself from ‘unforseen expenses’ that might occur.
Basic rule of investing – how much am I putting in, how much am I getting back and how soon do I get it.
My advice is to buy the cheap unit, and as soon as equity/savings permit, buy another either to live in or as another I.P. Either way, you are still better off than 90% of the population who do nothing.
Cheers, MarcHi All,
On accountants;
Unfortunately, these days timed and charged phone calls is becoming the norm. I have a great accountant, but I have made it my business to get educated on the tax laws for property investing (as boring as it is) so I can converse with him on his level. It helps that he is a property owner as well. This makes our conversations short, productive and the results are good. He is worth every expensive cent (and he is tax deductible).
If your accountant is not savvy on property then dump him/her and find one that is right now. You simply must have a good accountant if you are in the business of property investing. Your first question should be is “How many properties do you own?” If they say they prefer the shocks and scares and property never outperforms them, you know you are in the wrong building.
Cheers,
Marc.Be a U.S congressman. 2.5 days per week, no work actually done, earn $165k per year. That’s fairly passive.
Marc in L.AHi Dee Dee,
I am an investor in Melb and have been ‘in the game’ for about 6 years. I am not a financial advisor trawling the property websites looking for business.
I have made some good and bad decisions and am always learning, but it helps to have a like-minded team around you.
About 2 years ago my wife and I joined the DESTINY FINANCE team through reading the MARGARET LOMAS books on property investing (I have read a million books on this topic).
Before you go any further you should buy and read every one of Margaret’s books – she just won Business Woman of the Year. Her books will give you all the ‘nuts and bolts’ of property investing.
Destiny Finance Solutions are financial planners who advise on various ‘vehicles’, but their specialty is real estate which is what attracted us to them, and I have found Michael and Laurel Sloan at the Melb branch to be absolutely fantastic.
Thieir charges are a flat fee for a finance plan, or you can ‘get on board’ as a client and become part of a team with excellent support, and their software package for managing multiple (or single) Investment Properties is brilliant. They also make income out of loans they arrange for their clients.
They looked at our financial position (it was already good) and formulated a plan to go forward with. We signed on as a client, and in the first 12 months I was on the phone to Mike and Laurel almost every day. They are very obliging.
There were no hidden traps, or products they tried to sell us. They also will help you organise the right type of investment loan if you need it. We already had a good loan in place when we joined them, so we didn’t do anything straight away, until our fixed term period ended, then we restructured our loan through them.
There is a branch in Perth; look up Destiny Finance on the internet and you can get the branch details. As a client you become qualified to take advantage of all sorts of different services and discounts relating to property investment, tax, etc etc.
If you want some confirmation of what I have said as bona fide, ring Michael at Destiny in Fitzroy, Melbourne and ask him about ‘Marc who moved to Los Angeles’ as a client. He won’t give you details (I hope) but he should confirm I am a client and not a salesman on the forum.
Hope this helps,
Cheers, Marc.Hi Guys,
I am new to the forum and love it. I have been investing in property for 5 years now. It’s great, but as you all know it can be challenging at times too.
All this talk of where to invest is excellent. The more dicussion there is the better we are informed.
My view is that I don’t think that now is a great time to look at shares if you are in them for buy and hold (China and the commodities scenario notwithstanding). Just this morning the Wall Street stock exchange was holding it’s breath waiting for the market to hit another record high.
I am sure you can still make money, but you would want to be in and out relatively soon if you looking to buy right now. I think that financial advisors telling their clients to “buy and hold shares for the long term and diversify” and “work on dollar cost averaging” are at best uneducated and at worst negligent. They should be telling their clients to get educated – fast, and watch the market closely.
Warren Buffet said “I made a fortune from buying too late and selling too early”, but I bet he isn’t buying too much right now.
A very interesting read is the “Rich Dad’s Prophecy” by Robert Kiyosaki to put the share market in perspective; especially the next few years.
I like the other quote from Warren Buffet – “I buy my straw hats in the winter”. I think he will be waiting until after this current boom ends and the bear returns – as it always does.
This means that with the current climate of a contracting housing market in many parts of Australia, there will be a lot of cheaper properties coming on the market over the next 6-12 months. But there are few buyers, so I think it is nearly winter time!
Buy low and sell high; or better still – never sell and leverage the growth to buy more!
Never follow the crowd and walk the path less travelled.
The good news is that everyone on this forum is following the less travelled path – the majority of Australians don’t even know this site exists.
Cheers, and happy investing.
Marc[smiling]Hi Guys/Gals,
I am new to the site and forum and read with interest all the info on cash/savings rates. Very informative.
Personally, I have an I.N.G account, but haven’t contributed for some time (since property investing 5 years ago). I have a small cash reserve in the account which was there before the investments came along, and I haven’t touched it in 5 years.
My belief is that while I have a mortgage (investment loan on properties) at a higher interest rate than the savings rate (and they always are), every dollar I put into the savings account is one dollar (and then some) less I can pay into the investment loan to reduce that debt.
I realise that the interest on the investment loan is tax deductible, but with the savings account; after tax on the interest and inflation is considered, the net gain is almost nothing and meanwhile there is a lost opportunity to increase the equity across the investment portfolio.
As a result, I put every available cent into the investment loan, thus increasing the LVR and improves the equity percentage which the banks love.
Has anyone got some thoughts on this strategy? Is there a better way?
Cheers,
Marc[laughing]
