Rob,
Was that 100% finance for $500000 shares with no strings attached?

Scary indeed.

Lifexperience

Hi Snowgum.

If you are using 20% cash deposit (are you?). Then you are using $83,600 + $20,900(closing costs).

total $104,500 CASH IN.

So at say 70% vacancies, you are looking at an income of:
70% * $120 * 5 * 52 = $21840 p.a.
Expenses of:
$9500 + $21736($334400loan @ 6.5% IO) = $31236pa

$9396pa loss per annum. Before tax refund
True loss at 48.5% tax bracket = $4885.92pa….I hope it IS a good area like you say.

*******YOU WOULD BE MAKING A 4.67% REAL ANNUAL CASH LOSS ON $104500**********

So if you did say an extra cash injection of say $7500 per unit for renos, you would get a return of $20pw = $1040p.a on this. Allowing for 70% vacancies, you get about $728 pa per unit 9.7% return on the money injected for renos is pretty good.

total cash in = $104500 + ($7500*5) = $142000
annual cash flow loss = $9396 -($728 * 5)= $5756pa
After tax loss(48.5%) = $2993.12

********YOU WOULD THEN BE MAKING A 2.1%pa LOSS ON $142000***************
(fingers crossed for capital gains again!)

OR IF you can strata and sell in 12 months. (no renos)..you could sell the lot for $550000.

Profit of $550000 – ($418000 + $20900)= $111100profit – (strata process costs {$10000?} and holding costs for 12 months{$4885.92? actually this would not be included in CGT calc, rather it would be offset against income. Neither here nor there really} and selling costs{$30000?})

At cap gains (discounted) of 25%, you make $49660.56 on $104500.

*******YOU MAKE ABOUT 47.5% after tax profit on your $104500******.

No renos, I would go for the strata baby.

NOTE: I havent allowed for depreciation in my calcs.

Lifexperience

In my experience,

you would probably get a “purchase subject to major structural defects” expiry within 14 days from offer.

I have found you have to be really lucky/smooth to get a “subject to purchasers satisfaction of building inspection report”

Very Big difference!!!!!!!!!!

It is also very unusual (smooth), to get vendor to make repairs prior to settlement unless you paid too much to start with.

I would suggest that you very clearly state the possible problems you may have that would prevent you purchasing property.

Ie; if you were borrowing 100% of the sale price, you could state that the deposit would be by means of a deposit bond only within 21 days and subject to 100% finance being available at settlement.(this is a very cheeky offer)

cheers

Lifexperience

oh, and my electricity bills for a 3 bedroom house with students was $1200 for 3 months over winter.

I also made the mistake of living two hours away from the properties………i lost a lot of time and money travelling.

Lifexperience

hello, hello.
It is a very overall perspective taken when you attempt to comprehend the effect of one generation on the next (or previous) in our country or even on the world scale….humbling as you consider that you are but drop in the ocean as to the continuance of mankind.

Personally I view other generations as acting as a matter of circumstance and environment.

. I personally have always looked at the older generation and asked them how their lives have panned out and what critical decisions formed their end result. I always ask what they would have done differently with hindsight.I think that the same rules generally still apply to all gens.

I think that the effect one gen has on the next is largely guided by the governments and medias influence on the country. Which is sort of guided by that particular countries needs.

Currently I see an population with the demographics consisting of mainly older people. To regain balance, we need more younger people as it is the 20 – 65 year olds that contribute the most tax into the system which is what our country is built on.

Breed more, immigrate workers, become an american state, start more wars, build robot workers are a few of the easy ways our government could steer our country to ensure they have lots of money to wisely spend on the development of our country…….

…….as the majority of aussies would never dare risk their new car and plasma TV to attempt to change (destabilise) our current political system for the better, little johnny H. will be in charge.

I think that on a personal level, that within every generation individuals currently have the opportunity to be whatever they wan’t to be, Irrespective of inter-gen issues……we are lucky in that regard.

Whenever I look at the bigger picture, I always notice that there seems to be a stark contrast between how good we have it here compared to a lot of other countries that are suffering from civil war, famine, disease, over-population……

I wonder if the people in such countries are able to consider the direct effect of generation decisions on their lives…….hmmm

Lifexperience

Crashy,
allow me to enlighten you as to why the posts made were not just humurous but have a lot of merit.

You wrote

Crashy, I beleive that you posted with the best of intentions and are basically a good person.

As are most people (yes, investors) on this forum. (most of the people on this forum are trying to build themselves a better life so as they can spend more time with family and friends, they have not had the luxury afforded to them of having had a lot of money)

However, I feel that being righteous, jumping to conclusions and passing judgements on people you do not know could mean that you may have missed the spirit of christmas.

You came from a rich family that you say were tightwads….and so i understand where you are coming from and why you don’t see the funny side.

I came from a poorer family who spent too much, and as a result saw a lot less of my family. Which is why I find a lot of the posts humurous…..I am also sick and twisted, but thats another story.

I hope that you do have a laugh this christmas, at the jokes you find funny of course.

Best wishes to you.[biggrin]

Lifexperience

council rates valuation is my guess…the lower they think it’s worth, the better you are off as you will pay less rates and stuff.

Lifexperience

Thanks heaps foston

Lifexperience

I know that feeling Spanky….

……..like when you are makin” luuurve to your partner and accidentally ring your mum without knowing…..”oh, baby, oh baby, oooooh babeeeee…”

ouch!

Lifexperience

In Excell, use the PMT function

PMT =(rate,Nper,Pv,Fv,type)
rate = interest rate / payments for year
Nper = total number of repayments for life of loan
Pv = Loan amount value
Fv = Future Value
type = logic value, pay at end of loan = 0, beginning = 1

So, if you had a 6.5%, $100000 loan paid monthly and interest calculated monthly over 25 years and you want to work out the monthly payment(PMT), then you put the following into your excell fields.

rate = 6%/12 = 0.005
Nper = 25 * 12 = 300
Pv = 100,000
Fv = 0
type = 0 (usually)

PMT = -$644 per month (notice the minus sign to indicate it is a cash outflow.

I only just learnt this the other day, But I think this gives a basic overview.

Do a search with excell help on PMT.

Lifexperience