Oops – thanks Doogs. Re not trusting ATO – surely if you’ve taken and acted on their advice you should have some level of confidence, or am I just being naive?

Mel

Sadly I find his stuff largely sensationalistic, not informative or as you point out, accurate!

He did a property investing article about 4 weeks ago that had me hopping mad, he had almost no facts to offer, just used every emotional tug he could to insinuate that property had no merit at all (story along the lines of: couple buys investment property stretching budget to limit, wife falls pregnant and has difficulties, couple defaults and their financial plans are “in tatters”, end of story) – basically he expouses the “come and see me and I will look after you via managed funds, everything else is too dangerous and should be avoided” routine just a little too much.

He has the ability to be so inspiring, and a lot of people follow his advice, just wish it was more educational and less sensational. []

Mel

Good advice Cremin – sounds like the agents keen to do the old one-two upsell shuffle. Don’t knock it on the head though, but be suspicious about why he’d want to sell you that one instead of taking sale commission on yours – if it’s a genuinely good option then there should be investors crawling all over it and keen to pay a premium.

Cheers,
Mel

Hi Alf,

I think you’re answering your own question and if your guts are churning then yep selling now near the top of the market sounds like a good option.

Not sure but is your total debt $244500+$8000+$80,000 = $332,500 over total assets $280,000+$220,000 = $500,000. Your current loan on the townhouse being interest only and just neutral does not look promising as you say, and leaves no room to move – recommend you see a broker about that high fixed rate – how long is it fixed for, seems exhorbinant!! You’d save almost $2,000 per year dropping to a 6.5% product.

If you can’t improve your loan cost position then selling the townhouse at $280,000 would return about $20K after loans costs and get you out of a fixed ‘neutral’ geared investment, I’d sell.

Look forward to hearing others spin. Good luck, enjoying your informative posts!

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Mel

Hi,

I don’t think it’s that complicated – it just gives you a roughly 10% return which SHOULD be enough in most cases to be sufficiently cash flow positive to cover debt interest and other costs, thereby ensuring it’s an asset, not a liability!

Welcome aboard []

Happy investing,
Mel

It’s a good point – maybe a short-term/higher-return development would be better given that LOC interest rates are high for long term lends, but v v cheap for short term.

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Mel

Oops just checked latest and yes they appear to all be around 6.1% now – same theory applies though.

Mel

Howdy,

Was just using Steve’s example of ways to reward tenants other than cash. Think vouchers to nurseries as he suggests are fantastic, but for Michael’s target maybe to Myers or the like may be more appreciated, and I think it should be linked to keeping the place in good order too, it’s a partnership afterall.

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Mel

Hello Deb, rider of a Kelly!

I think JV’s sound great too – we are with a couple of new groups at the moment. I think you’re Bris based? So are we and looking in that area too. Would love to hear from you on [email protected]. Hopefully a Brisbane meeting will materialise in the not too distant future too.

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Mel

Doh! There goes the beachfront apartment.

Thanks Kelly for your info, always helps!

Michael if that’s your strategy have you thought about contacting Centrelink and St Vinnies and places like that where people in need tend to hang out. For starters they’ll tell you where these guys live ie where rents are fairly cheap to begin with, and you can organise to be paid directly by Centrelink (as rent assistance esp. to pensioners and non-working single mums etc.) and then the difference of the fortnightly welfare payment goes to the recipient. This way you are sure to get your rent and if you wanted to ‘refund’ 20% of the rent you could maybe do it via vouchers, services etc instead of cash – although this heads into tax-world and beyond the realms of my knowledge – Kelly? Lovely plan Michael, go for it!!

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Mel

Wow everyone is quick today, or I’m slow ….
Welcome aboard newbie, I’m actually a professional mortgage broker and amateur trying to catch up in the property investor stakes and learning heaps! I think Kelly is your CGT guru but yes there are pitfalls for your plan, namely ability to cover all buy and sell costs AND cop CGT at your marginal rate on full value increase – most successful fix and flicks do it in under two months, ie v v slick, to minimise holding costs, probably as a company to only pay 30% tax. Kelly??