Peter,

The points you make are good ones. I think its reasonably safe to say that rents will rise to some extent over the next say 5-10 years. I remember in the early nineties I was paying about $150 pw in North Melbourne for 3 bedrooms which I seriously doubt I could get now.When we bought our Newport Property eight years ago, We paid $120,000,…[Read more]

Dan,

There are many different aproaches and they all are valid. My personal feeling re interest only and P/I is that it is relatively futile to try to pay of a large loan in small chunks. For example to pay off a 100,000 loan with principle payments of 2,000 a year would take 50 years ( not taking into account the compounding effect ), but you…[Read more]

Why are you so desperate to buy the second unit?
Are these units for capital gain focus or positive cash flow focus? What state are they in?
Why not how ? 10% deposit is usually the minimum either in cash or equity.

MJK

Accounting issues are taken care of by the use of sub accounts within the portfolio loan. One loan / multiple sub accounts. Each sub account gets its own monthly statement if you,ve got the right product that is.Each sub account can be P/I or interest only and rates can be fixed or variable within each sub account.

MJK

Susie,

I have a couple of properties tied up with my own home in a portfolio loan and another couple stand alone. My prefered option from here on is to set up stand alone using the undrawn funds from the portfolio as deposits. Reason being that if you purchase a new property and try to add it into the portfolio “all” portfolio properties have to…[Read more]

Chris,

By way of qualification, I have several older style properties in Qld. I think 300k sounds alot to pay, maybe these areas have already taken off. My money would be on the cheaper properties in Brighton.I’d aim for minimum 6%return if capital gains is your motive.

MJK

Just another thing to be wary of. I have discovered that council rates in Tassie are astronomical. Can be as high as 2%.So take 6% interest rate and add 2% for rates and the +ve gearing can sometimes look a little shaky.
Has anyone else noticed this?

MJK

Thanks Hilary for your reply. I wasn’t aware of the limits on the borrowing. The risk of a property being empty seems higher to me and if borrowing 100% using a deposit from a line of credit it would be riskier. Maybe comercial is for the cashed up people of this world.

MJK

One thing you can be sure about is that if rates go up rents will follow because buying your own home to live in won’t be as attractive or achievable, (in my opinion).Rising rents wouldn’t match rising interest costs though, so there would be a lot of people locking there loans in around 7-8% for a number of years hoping that rates don’t plumit…[Read more]

Very interesting. By the way, in percentage terms what would be the minimum or optimal nett positive return on a property that meets the 11 sec rule. Assuming it is dead on 11 sec rather than heaps better. Is a 1 – 2 percent return acceptable or will this be demolished by maintenance costs. Assuming 100% plus costs (10%) financing.Does PI.com…[Read more]

Thanks Bruce I,

Whats your thinking on doing all this with the same institution or do you favour your deposits from one inst’n and stand alones with another?

MJK

Thanks RC,

To my way of thinking” variety is the spice of life” A mixture of;

New -ve geared with high depreciaton benifits.( capital gainers )

Old -ve geared but large enough land to subdivide later. Will become +ve after subdivision and have great depreciation benifits and equity added )

+ve geared to cover short term expenses and create…[Read more]

Ally & Liegh K

Thanks for your candid responses it is daunting but I suppose possible. I do believe many have done it before us. I was wondering if a mix of capital growth oriented properties that are mildly negative and some positive cash flow propperties could offset each other.Thus allowing us not to over extend ourselves with regards to our…[Read more]

Ally,

Thanks for your reply. You have got my meaning.I suppose I could look at using the same institution. I did wonder if anyone else had a veiw on cross collateralisation ( if thats a word !)

MJK[^]

111111,

I would like to know the vacancy ate in Logan.[?]

MJKMJK