Qwerty,

Very interesting. The median’s I posted are for a Northern Beaches postcode too. Maybe its just an area that got majorly overheated?

As I’m still looking at the area as an investment opportunity I’d welcome people’s thoughts…

Cheers,
Michael.

Benny,

Thanks for the Aussie Valuer reference, I like it. A nice free little snapshot of selected postcodes. Shame the rental yield isn’t averaged for the last 5 years, if it was I could calculate the “Rental Reality” based on Steve Navra’s approach and get my optimum buy price.

But great little site anyway.

Thanks,
Michael

And unsurprisingly Jan Somers and Peter Spann and Robert Kiyosaki don’t elicit special treatment.

No such thing as a free lunch…

I still say great initiative! But I was always one for thinking outside of the square…

Spanky,

Don’t know what you’re on about, it sounds straight up to me.

I’ve got a plan, whataya think?

I haven’t borrowed that sort of capital before so will need to go low doc/no doc to the seals. They might put up some tuna if I go mortgage insurance.

I then take my tuna to the bears and put it up for purchase at a very reasonble price. I’m thinking wrap here. So, if I now find another bunch of bears who are a bit hard up I can flog it to them for a few bonus tuna and make a spread each month that will literally feed my family.

Little risk the way I see it. I’d need a subject to clause in the purchase contract in case I can’t find those hard up bears, otherwise I’m sitting pretty.

And if the bears default on their vendor finance repayments I can always sick the seals on them.

Whataya reckon?
Michael.

He he. It seems ironic that THIS post is the one that tips my quota in to “Established Forum Contributor” territory don’t you think…

FireCaeser,

The market conditions have changed since Steve wrote his first book. I think even he would now advocate caution before applying some of the principles outlined in that book. His second book (see links in my first post above) is more up to the minute, and might be a prudent read before you progress down a particular investment path.

Read the “Investor Strategies” section on the left hand side of the forum here. It will explain the fundamental differences between a “buy and hold” and a “+ve cash flow” approach to real estate investment.

Before you act you should be aware of the pros and cons of each approach and then select the one that best suits your personal circumstances. Once you understand this you can then formulate a plan and ask for assistance from the forumites in executing your plan.

Please give us an idea of your personal circumstances and your justification for selecting the investment plan you have as a first step. We can then discuss the wisdom of your approach and then aid you in its execution.

Cheers,
Michael.

Don’t I look like the goose now that Qwerty’s post beat me by 8 seconds [biggrin]

Now that was an interesting read. Quite long, but well worth the effort. It was interesting to see the two different approaches to borrowing that are now in play. There’s the “borrow now, pay later, to fund consumption” guys and then there’s the “good debt to fund retirement” guys. No real surprises there, except that the former are so heavily represented.

The best part of the article is the wrap up at the end, but there’s an interesting bit in the middle which mentions the good debt group having the highest level of personal wellbeing. No surprise to me really… [biggrin]

Great post, thanks for the link.

Cheers,
Michael.

Geo,

I think Yack’s question was broader than just where to look. I think he was questioning the wisdom of looking further afield to chase positive cash flow. He’s questioning the methodology, not its execution.

I too would not be looking further afield at the moment. I think the ripple effect that rural housing has experienced has passed. Spann describes it like dropping a pebble in a pond. City prices go up so people look further afield to get the yield they want. Of course, the equity growth follows this as people chase these types of house. But once the ripple has passed its time to look back to the centre for the next pebble.

I’d be sticking close to big city centres and waiting for yields to increase and then buy on the lead indicator of the pending market growth. Then let the CG return the big bucks and let the rents catch up once the market softens again.

But hey, its horses for courses, and if you want to make 30 bucks on a $20K investment, don’t let me talk you outta it.

Cheers,
Michael.

Guys,

LifeX suggested this approach to me in another thread, but it was proved not to work. The understanding is that the ATO looks at the purpose of the loan. So, if she were to further mortgage her IPs to pay down her PPOR then the purpose of the increased mortgage is to pay off the PPOR and is therefore non-deductible.

However, Terry raises a good point of selling to the trust. By separating the trust from the individual there might be away to get around this little hurdle.

Happy to take any recommendations on this one as I have $100K equity in IPs and a mortgage of $180K on my PPOR. I’d love to turn that equity in to a deductible loan and reduce my non-deductibles by the same amount.

Cheers,
Michael.

Hi Guys,

Has anyone purchased the “Best Growth Metro” report for NSW from Residex? I was thinking of buying this one to limit my search to a few key suburbs that were nearby but wanted some feedback on its usefulness before I put up for the $165.

Thanks,
Michael.

Phil,

In answer to your “why now” question, I propose the following… Maybe its a case of the Baby Boomers sitting on their PPORs and realising all this capital gain. They may have been one of the lucky ones and splashed out on a single investment property, you know a unit somewhere as a nice little retirement nest egg.

Now the market comes along and whataya know, they’ve got all this equity. But instead of staying true to the “retirement nest egg” mentality, they see some bloke on tellie with a new boat saying “equity mate” and Eureka! Now we can have our retirement nest egg, but redraw our equity to fund our excessive lifestyle. Off to the boat show for the new trailer sailer and now that I think of it that means I’ll need the new Nissan Patrol to towe the thing… Oh, and if I’m getting a new car I probably should build a double garage to house it. What the heck, if I’m going to council I might as well shove another level on top too…

Well, you get the picture.

I think equity and easy finance is funding a consumer society. Its a real shame that the real estate market has paid big dividends recently for the BBs in the market, but they’re so into consumerism that they’ll draw it out and blow it.

Ah well, there’s always the Gen Xs to fund their retirement and hospital bills with higher PAYG tax rates.

Sorry, I’m a Gen X and might be showing a little bit of a one eyed approach to this post. [biggrin]

Cheers,
Michael.