Forum Replies Created
There is nothing wrong with negative gearing provided you can afford the cash loss per week. In fact, after having made 1-2m in property within 6 years I would say it is a key strategy. Problem is, with all the cashflow loss, how do you support it?? Wrapping is one way, but you lose your long term wealth by giving away freehold. Provided you realise that you will be fine. Positive cashflow/wrap to cover the loss on the ‘prestige’ neg gearing things you own seems to be the thing that everyone gets to eventually. So….you own a couple of neg gearing things…no problem at all. Work out a way (and wrapping is one) to get a passive income to cover that loss. There ends your cashflow problem!
I would suggest you firstly buy a very cheap property and hold it in your own name. In todays market you will make quick capital growth, which you can then play with later. You need flexibility and assets to effectively wrap property. Initially 10% of purchase price, but you do get some of this back. You need to qualify for a loan initially, and stupidly it is harder to get finance for wrapping then anything else! Wrapping is also not super straight forward, and things do go wrong. You need to have some financial muscle (not a lot) in order to effectively deal with any issues that arise. Have a look in Tasmania, or country areas for 30-50k properties with very good rental return, I think this will be your best bet – until you have runs on the board, so to speak! Another point is that when looked at as a business, wrapping generates pretty poor returns. It is safe, but very capital intensive. Possibly a cheap business (<5k) would suit your circumstances better.
That doesn’t make sense at all. Unless they think the threat of jail is more of a deterrent than a mere repo! I didn’t actually know that product existed. What sort of L/V is required on stat dec income loans? What evidence do they require?
Edited by – [email protected] on 26/05/2002 08:40:17 AM
Steve,
Firstly GREAT site. VERY pleased you are inputting honest, truthful and accurate case studies. PLEASE keep it up! Now your property. I would have bought several of them if I could, and used them as buy and holds, which kills wrapping return anyday (very capital intensive business) provided you keep 2 years plus. I would also like to know why UK – if you were as me, I doubt it was just a pleasure trip! Those lovely pounds! I wrapped your tapes to a friend of mine there a few years ago……..Edited by – [email protected] on 25/05/2002 8:56:44 PM
