Forum Replies Created
Robert,
Can you refinance with Residex, or is it new loans only. I still owe $180K on my PPOR which is the only loan I have at the moment as I cashed in the IP to pay down the PPOR. The house and land cost me $650K so I guess owing only $180K is a pretty good position to be in, current valuation circa $800K.
I’d love to refinance to interest only, but I think the 5 year lock in might stuff me up as I want to discharge my mortgage in about 2 years and am paying P&I.
I think you know who I’m with, Gateway CU on 6.5% standard variable with no fees (except $2 to join the CU) and a full offset account.
Cheers,
Michael.Jenny,
You can still get the odd bargain in Dubbo itself too. This little gem crossed my path today…
Its a real cheapie, but with a lick of paint you could probably get the rent well up from $80 a week. Asking price of $25K is a great buy, but she’s under contract.
They are out there still, you just need to keep your eyes open and be ready to act.
Cheers,
Michael.Steve,
I think they’re great, as I said in the first thread on them when they first appeared.
But, can I suggest that you adjust your template so that you include a space character before and after the word you want to link from? i.e. “[]map[]” instead of “map”. In this way you won’t get all the weird links where the word forms a syllable of another completely unrelated word such as “booking flights” or “homaphobic” etc.
Also, please allow them to show up in the preview pane. It would make editing before posting that much easier.
Cheers,
Michael.Rich,
Welcome! And you’ll find the forumites here really friendly (for the most part [biggrin]) and happy to help.
My 2c would say definately hang on to it if its CF +ve, since its not costing you anything. This assumes its a good investment and will show some CG. If the profit after tax plus CG is likely to be less thann your mortgage interest rate then there’s a case for selling it and paying down the mortgage. But before you do that read my post on life’s little lessons…
I’ll let others talk structure for you, but there’s a few threads on that topic already if you do a search. Trusts seem to be the go and get the book from Gatherumgoss (sp?) “Trust Magic” for the low-down. The threads that mention it have links to his site.
Welcome again,
Michael.I wanted to watch it, but didn’t realise when it was on. Shame I missed it, I’ll try and catch it next week.
Cheers,
Michael.Guys,
Just read this thread for the first time. If there are still a few likeminded souls out there that haven’t been dissuaded by accusations of elitism, then I for one would definately be interested in a mechanism for meeting outside of the forum.
I am Sydney-based and 34 and very keen to develop a positive, energetic network of like-minded property investors.
Robert, if nothing comes of this thread, and PropertyGurus comments on the PI.com community meeting monthly already, then just PM me and we’ll take it from there. I’m hoping to tap into that community if its open to new participants, but if not I’m happy to kick a new one off if a suitable quorum of individuals materialises.
Great idea, and one I’ve been tossing around for a while now.
Cheers,
Michael.Richmond,
Mid-300s? Wow, that is starting to come back. I’m watching postcodes around my area and they are coming off the boil. But I too think they’ve got some more to come off yet.
Patience is a virtue, I know. But if there’s one thing I’m not good at its “doing nothing”. I hate sitting on my hands so to speak.
I guess if I look at it as “active analysis and preparation” then I am actually doing something, just not the execution bit until I like what the analysis is showing me.
Cheers,
Michael.Yack,
I personally have now learnt the resilience lesson! [biggrin] I’m ready to invest for the long term on a neutral, maybe even slightly negative CF balance and sit tight. Unfortunately, now that I’ve learnt the lesson, the market is not ripe for me to get back in. I’ve got to sit on the fence and wait for the worm to turn.
I guess it does take a cycle to learn the lessons though. But, I am so ready for the next cycle to begin!
I guess I’ve now got to learn that other lesson, patience…
Cheers,
Michael.Jake,
You’ve got the right stuff, I can tell. And with a string of mentors helping you out, you’re sure to go far. You’re already ahead of most of us. I’ve never had a mentor and have had to figure it all out the hard way. I’m 34 and nowhere near where I expected to be by this age, but there’s still time for me to get it right with what I know now. If only the internet existed when I was your age I would be a millionaire by now! [biggrin]
Cheers,
Michael.Hi all,
As always this is a question of circumstances. But based on the information given I’d suggest the plan B approach of +ve geared portfolio followed by PPOR. I recommend this based on the “struggling” line in the purchase PPOR first approach. To me this means it would take ksb7 a long time to purchase and own outright their PPOR. In this case delayed gratification is warranted.
However, there is a lot of benefits to owning your own PPOR including:
No more rent, which can be a huge expense.
Tax free capital gain.
Borrowing power through equity.
etc.I have bought my PPOR and will own it in 2 years time. The interest on the loan is LESS THAN the rent I used to pay on my run-down unit. So for me the numbers were simple. Why should I pay rent for a crappy place to a landlord when I can pay less interest to a bank for a better place? And get all the benefits of owning the property and the CG that comes with it…
But my circumstances were different I suspect. I had a huge deposit and paid cash for the land. So, in a way this was my “delayed gratification”. I didn’t buy until I was in a financial position where it made sense to do so. I managed to save over $300K for the deposit, but did this without a single +ve geared property. I did it the hard way with a balanced portfolio and a single -ve geared unit. In the end I got there though, but it took a while.
I agree with Robert that your PPOR should be considered a liability (takes money out of your pocket) and not an asset (puts money in your pocket). However, it may not necessarily be your biggest expense, for me rent was bigger in the end.
Run the numbers, do the math and the answer should be obvious.
Cheers,
Michael.Nice Post.
White Knight too….
I like the description, and it does sort of ring true as well.
Cheers,
Michael.Robert,
Nice post. I’m 35, so borderline I guess, but all the stuff in your post rings true.
Its a shame the world has changed as much as it has from those days. Its little wonder Australia is rapidly catching up with the US with our obesity epidemic. Bring back go-karts and back yard cricket I say! (But, I guess you’d need a backyard to play backyard cricket and most new houses don’t have big enough ones…)
Cheers,
Michael.Johan,
Welcome, noticed it was your first post so thought I’d pitch in with some help…
The question of whether it is still worth pursuing if it is slightly -ve is one of your investment strategy. If you envisage positive CG then a slightly -ve cash flow should be offset by CG and still deliver a positive return. Not everyone is into negative gearing though, and if this is the case for youruself then you’ll need to look elsewhere for your +ve CF. They are out there.
I personally prefer a slightly -ve geared / neutral portfolio because I look to make my gains in the big smoke over the mid/long term where CG is solid.
If you want some specific answers on the property you’re looking at then post some details and I’m sure a nice person on this forum will post some constructive feedback on the merits of your specific opportunity.
Cheers,
Michael.PS, Nope haven’t invested in Townsville.
Lumwood,
There’s been a few threads on this topic so do a search and you should find some answers with links. The short of it is though that they’re not for free. Aussie Mortgage Market has a free postcode analysis which shows median prices by bracket for the last 5 years as well as rental yields. Its not updated that regularly, but is good for a free service. The ones you pay for give you a lot more depth. Most seem to source the info from Residex.
Cheers,
Michael.DanandFi,
he he, yeah for the title, just hover over the link in your own post… [biggrin]
Cheers,
Michael.Steph,
Nope, I’m not a lawyer, the wife is the only one in this household. You’d be surprised how many Michael Whytes there are, even with that spelling!
C@34, I second Steph and say Good on You! My wife and I have already talked about taking my father in to our place when my mum passes on. He’ll outlive her by thirty odd years based on family histories. He’s unreal and they have both done so much for us. I wouldn’t contemplate putting him in a home unless that’s what he preferred, but I reckon he’d rather live with us any day.
Great stuff,
Michael.Oldchick,
Welcome! I’m sure you’ll get quite a few replies to your question so I might start the ball rolling with my humble 2c…
You’re doing the right thing and clearing your debts is the obvious way to get started. Get yourself bad debt free and then use that spare cash flow to build a little deposit. This will help with your borrowing capacity.
REI is a great way to build wealth, so your partner is on to something here. But its not as easy as it may seem at first glance. There’s a lot of pitfalls for the uneducated and imptuous. While you’re clearing your debts you should start reading up on the topic. Spread your reading across +ve CF and -ve CF so you get both sides of the coin. Then you can decide which approach suits you best. Steve for +ve CF is the obvious choice, and maybe Peter Spann for -ve.
Of course, check back here regularly and read all of the threads…
If you want some specific information then you’ll need to post some more specific stuff about your current situation. ie. How much bad debt do you have? How much is your combined income? What is your current thinking on what you’d like to buy first off? How much equity do you require and by when? etc.
With this sort of info, you’re bound to get more specific responses on how to get there.
Cheers,
Michael.Robert,
Good points. That’s why I use AAPR though, and not nominal rates. I think most investors now understand how the fees and charges can ratchet up the costs over the term of the loan and need to be factored in to the total.
I think there is definately a role for brokers though. I’ve contacted one on this forum myself already. But I don’t think there role is to source the cheapest loan, that’s just the icing on the cake. I see there role as follows:
To maximise my borrowing capacity, and thereby my leverage. I need to know what mechanisms I can put in place to maximise my borrowings. Do I need mortgage insurance. Or can I do other things to max my borrowings. eg. By increasing my cash flow and thereby my servicability. Is my portfolio too -ve geared, and do I need to come back to neutral/+ve. etc etc.
Basically, the brokers role in my team is my money source. His job is to get me as much as he can at the best rate he can. When i need cash I go to the broker. I rely on him to tell me how I need to structure to max my borrowings.
Just my 2c,
Michael.And to get there is no small feat. Peter Spann made $10M in 10 years, but his leapfrogging technique meant this was all encumbered. Now to make $10M unencumbered he’d have to sit on that for 10 years until it doubled in value to $20M, 50% encumbered. Then you’d have your $10M in equity to retire on, but that’s a 20 year plan. I think I want my $10 mill a bit faster than that… [biggrin]
Cheers,
Michael.Tait,
Sit tight. You’ve put the word out now and I know there’s a few Bird Doggers that frequent this forum. I mentioned an interest and got 2 PMs within a few days. If you can’t wait then you can look DD up in the members section and PM him/her yourself direct.
You’ve done the right thing by asking the question. Now let them come to you. If you get no joy then just post again in a few days time to bump your thread.
Cheers,
Michael.
