Forum Replies Created
Does being a mil in debt make me a millionairre? if so I think I will pass! Theoretically in a few years time I will be a millionaire and I will be doing the same as now – chipping away at a big assed collection of mortgages!
Wisdom of hindsight – wish I had invested in Kal 3 years ago instead of Robina – bank valuation just dropped 135K, now my debt is bigger than my asset! Oh well they say you only lose money when you sell so I guess I will own a little piece of Qld for a bloody long time now!
PS love the spirited debate!
Hmm food for thought, still its not a loss until sold at a loss! I was originally encouraged to seek a diverse portfolio with property in different states but there is alot to be saidd for sticking to the area one knows best, As a rent increase or capital growth is not likely in the short term I will sit back and focus on the benefits of negative gearing for a couple more years……..
Thanks for the feedback Derek. As nice as Perth is, I am 100% country boy and would seek a change of career before returning to metro service, Unless I do something really stupid I should have Govt housing for next 20 years!
No I dont have any non-deductable debt at all. While the govt is providing me with accomodation I am pouring all my efforts into IP. I dont think I will be purchasing another for 12-24 months but the long term plan is a portfolio of about 6. I am not 100% sure whether I will need to access the equity. Definitely not in the short term but in the next five years, probably.
I accept that I might miss out on future rate drops but when I can get almost 1% cheaper by fixing as compared to variable, thats over 10K per annum across my portfolio, which is significant. I would agree that it is easy to get too fixated on rates when we are talking 0.1 or 0.2% but the difference between fixed and variable is much greater than that and has significant impact on cash flow and lifestyle I provide to my family
Purchase price for cannington 415K, loan estimate depending on fees 360-365K
I am also considering whether I should bring all of my properties to one lender or keep them diverse – comments?
Cheers
Laury
I certainly dont have the experience of the previous forumites but selling would be a extremely backwards step. By the time all the commisions and taxes etc come out of a property sale you end up with a much smaller cheque that you anticipated. Restructure the loan to generate some extra cash flow and then smash that 40K debt coz that is whats holding you back. It might be worth approaching a broker to talk about re-structuring and what that will do to your finance capacity. There are some great opportunities around at the moment for investment and it would be a shame to miss the boat
The theory is that a broker will do all the running around for you and secure the best deal available, however if that was the case the majority of all brokers business would go to one bank in any given situation. It doesnt. Five brokers will give five different answers. I think that it really comes down to time. If you have the time to spend on the net interpeting websites and making phone calls then a broker is not maybe as useful as if you are time poor or not confident to do your own research.
Wow – what a tale of woe! I sympathise with anyone that tied up in this mess and I certainly will be extremely cautious if ever tempted to buy off a plan!
Here's a curve ball for you – get out of the city! Keep your property up there as an investment and have a look at some country towns – cheap housing good facilities – if you pick the right town, and always a high demand for vets! You will soon become part of the community and build a support network for your 2 person family and who knows you might even find you love the lifestyle!
Good luck with your decisions. I hope it all works out for you
Laury
"Also if they have had experience dealing with bad tenants and have had successful outcomes, as my houses are in Nollamara… i am expecting the possibility of having tenants that may wish to deviate from the rental agreement."
Hey just because the suburb had/has some less than desirable tenants in it doesnt mean you have to rent your property to them. With the rental market in Perth at the moment, make sure you pick and choose your tenants to get the right ones. Bottom line is they are your properties and your choice who lives there!
If I was buying a rental property – the less land the better. Less gardens to maintain or repair and ditto for paving etc.
If I was buying something to live in then it is a different story all together. I like my space. Look at your goals for the property and work from thereI always dreamed of owning a Range Rover, then I sat in one (oldish) and discovered that my XXL frame did not fit comfortably in it. I have short arms and deep pockets so spending big$$ on a new car will never happen. very happy with my 80 series cruiser and toyota Aurion (looks like grandads car, goes like a startled gazelle). Like many others on this thread if I could free up the cash to buy a new car I would spend it on something smarter….
Only motor vehicle I ever made a profit on- I bought a 1950ish international tractor with a seized motor for $50 and by judicious application of heat, oil and brute force got it running again – sold it for $950!
Man up or stay with TIC
Always liked someone who calls a spade a spade!
THanks NHGfor the links
I hope not!
Well I reckon you can take living in the city or burbs and stick it where the sun dont shine! I will buy my investment properties ther but give me a few good acres just a few KMs out of a nice country town where I can build the dream, spread my mess and have a bloody huge shed!!
What a collection of bad choices! Labour reeling from one cluster to the next, Tony running round in budgie smugglers, taking cheapshots at labour and not actually showing us whether he is capable of running a country, Bob the greenie picking up scraps of power and trying to hold the govt to ransom for his one eyed policies. Its such a bloody sad bunch at the moment I would almost vote for Pauline!
PISTORE wrote:Laury wrote:My assumption of neutral gearing is that after you have crunched all the numbers including depreciation etc Mr Taxman chooses not to take a cent off you but in reallity you have actually put a couple of dollars in your pocket. Please correct me if I am wrong!Essentially your right. It's about running the books at a balance. Remember, you don't make money from rent, you make money from growth. The rent is what enables you to cash flow the property long enough to make the growth.
EG: lets say you had 4 investment properties. 1 was Negatively geared and 3 were positively geared. If the numbers were done right, you could own all 4 of those properties 4 $0 out of your pocket every week.
After a while, your portfolio would by default become positively geared as the rents crept up, so, once it is, go and buy another property to off set the positive rent. You might have to buy 2 or 3 to try and balance it out, but if your capacity is there and your equity is there then there is no reason you could keep going until you had 100 properties.
Once you retire, sell 30 of them and then own the rest and get the rent from them then as an income.
Might sound good in theory, but works even better in practice.Sounds like a beautiful plan,now if only I can make it work……….
Thanks Kent
I like the idea of a systematic approach to finding the 'plums' . My current finance capacity is around $410K on latest assesment and my biggest issue is cash flow with a young family so I am really looking at cash flow neutral/positive with a high occupancy rate. Ideally I would love to obtain a property for a long term GROH lease but I dont think they pay quite as well as they used to. The other issue with that is finding the town needing houses at the right time and the right price – not to mention if I got transferred there I might have to live in it! I am also interested in the NRAS programme.
Freckle – got to admire a guy prepared to tell it like it is. I am looking at holding the property for a long term so while I acknowledge there is a boom bust cycle and our turn will probably come, people still need roofs over their heads- I just have to pick the place they want to live! Incidentally my wife completely agrees with you although she is working purely on gut feeling!
It does make you think about the US opportunity – they have already had their crash! but I am not really educated or confident enough to fully explore this option.
Keep the discussion coming guys – very enlightening!
Laury
Very happy with my unit in West Perth – wish I owned the whole building!
If I was buying just for me – 100 acres in Karri country somewhere in the South west of WA with good dams, good horse yards and some serious timber! Maybe if I buy enough units this will eventually become a reality!
Oh and a big shed……….
How do you eat an elephant?
……………………….one mouthful at a time.
The Freckle
Classic! but first I have to catch and cook the bugger!
