Forum Replies Created
Sooshie,
Re the fresh meat comment.
I’ve never suspected Steve was a con.
But I must say I did become mildly Cynical with this Today Tonight Business and the frenzie the book has created.
Unfortunately I can be a bit sarcastic.MJK
Doug,
I have no idea they just sent it to me. Like I said I’ve been with them a long time and have no personal debt. I suspect it has more to do with how much you borrow and having a good track record of making repayments. I wouldn’t say its anything to aspire to but I thought I would mention it so people could see where I was comming from.
PS. I hope your a newbie because I have to earn some nice points after being savaged on the soap box forum.
MJK
Chastised I suppose, but it took a while !
In my defence I was refering to the flood of “newbies” all hitting at once rather than the occasional.
I sincerly hope all you newbies suceed.And those that became a little overly upset the same.
I suppose being honest, even in the soap box section, is not worth it.Mind you I’ve done my bit to answer questions for people.
Maybe I can take over as the next villan from Tails007
MJK
Roxy,
I personally find using a buyers agent the only way to go when investing interstate. I used a realestate agent that acted as a buyers agent for me by showing me property that wasn’t listed with her organisation. Also I used a reputable buyers agent to help me buy a commercial property.
The point I would make is that you need to be actively involved in finding the right agent and then make sure they are finding what YOU WANT.
Lets face it we cant be flying interstate every week can we?
To buy residential locally I wouldn’ use a buyer because I could do it myself.MJK
Simon,
I like the St George PL. I use it myself.I like it because you can have money preapproved and in your account undrawn ( ready to use ) typical line of credit I suppose. They give me 5.97% interest on my primary account & sub accounts. I like to use the available funds to fund a 20% deposit and chase 80% stand alone funds elsewhere. I am a GOLD client with ST George which means I have a direct line to assistance that the general public doesn’t use. I find them very helpful and extremely competative. I always get good service.
St George listened to me 10 years ago when the major four mucked me around. So my exoerience has been all good.MJK
Thanks Mort Man,
I was going to make this point myself but thought I’d said enough. Over extension is the real issue, lesser so the market.I agree with you.
MJK
Polar Bear,
” Voila , you have your bust “
I think your confusing property with shares.
The last propery crash was caused by 17% interest rates. Now thats doom and gloom!
MJK
Some people will believe anything wont they ?
The world is a different place today. I think the past is usefull but not always a garantee of the future. If anything our high dollar may see a slowdown in Australia now, and ease pressure for rate increases. Were talking property soft landing not property crash in my opinion.
These people waiting for the ” crash before they buy may be waiting for a long time.MJK
Maximillion,
If you have a property earning 10% and costing 8% ( 6.5 in interest and 1.5% in costs ) you can afford a 2% rise in interest rates before it goes nuetral ( which is not yet negative ) The point to consider is is it worth holding nuetral property in rural areas ?????
Now if you can find a 20% return then great. I cant!
So if you do end up at nuetral or negative what kind of property would you like to be holding ? I would suggest one with alot of on paper tax deductions.
So you say, “I’ve locked my rates in at 7% for 5 years” and I say ” well you’ll have cash flow for five years”. Are you happy with that?
Others may beg to differ.MJK
My target was 45 but I’m considering 42 now.
My current age is 38.” Aim for the stars, if you miss you will land on the moon. “
MJK
Polar Bear,
I bet your glad you bought when you did. My experience is the same but my investments are all within 3-17 klm of CBDs. Personally I’m not comfortable with rural property. Major towns like Ballarat, Toowoomba, etc… would be OK but small towns are to risky for me.
MJK
Rents also move when housing affordability decreases. The driver for this will be higher interest rates but the downside is that for an invester higher interest rates reduces the net return. High interest rate periods are the make or break for many investors.
MJK
Dino,
Rents move when demand supply ratios change.
MJK
Dino,
You are right. People who bought say 4 years ago have reasonable if not excellent rental retuns which cannot be duplicated in the same area, in the short term at least. Thats why the pos cash flow brigade is going rural.
Timing in property cycles is very important. Many seasoned investers have been in the game a long time and have seen at least one complete cycle.
If you are starting out you are surfing the part of the wave that has rent way below house price which is the most difficult part of the cycle to invest in.
Now of course there are still oportunities out there for both long term capital growth and cashflow but its a lot harder now. Theres no easy way.
There are many who say it doesn’t matter what part of the cycle you buy in because long term property always grows.
If you buy for cashflow your reward is instant.
The issue is can you afford to take a loss for a gain or are you prepared to go Regional or commercial or overseas for that matter.MJK
Pin,
I typed up a long winded reply yesterday and something funny happened to my computor so I lost it.
The first example you gave is not “negative gearing” but rather “positive gearing”Positive gearing = costs exceed income before tax but not after tax.
So yes you CAN make money from positive gearing but not negative gearing.( excluding capital gain of course which is the main objective of such a strategy )
We must understand the differences b/w positive gearing and positive cash flow.
Positive gearing is an excellent tool for any property portfolio because when yo retire you will need tax benifits to shelter your now passive income!
I am a great beliver in investing for positive gearing and capital gain and have the properties to back that up.
Great conversation though. Exersises the mind.
MJK
Negative gearing cant save you money.
Positive gearing can.
I’d like to see an example where negative gearing can save you money.
The only money to be made from negative gearing is capital gain.
MJK
” Isn’t it called the bigger fool system ?”
MJK
It is truly amazing how many people dont want to move to a higer tax bracket because they THINK they will be worse off. I’ve given up trying to help peolple understand if they have this idea firmly implanted.
MJK
Sue,
I know what you mean. My point is that if you get non cost tax deductions ( ie div 40 & 43 )and are on a high tax bracket, going negative is not so scary. I do worry about these people investing in the bush for cashflow though. If I were them I’d be locking rates in for 5 + years.
Gone are the days of buying +ve cashflow in blue chip areas, even in the smaller capitals.
I believe investors with means will be seriously considering +ve cashflow commercial albeit not for the novice.MJK
Sue,
The point is if you are buying for positive cash flow in rural areas, often you are buying low quality, low capital gain property with no depreciation benifit. Most people that accept neg gearing as a strategy are after long term capital gain and tax benifits to cushen the neg cash flow.
A negative geared country property is not a pretty scenario in my mind.MJK
