Originally posted by CheekyOldBat:
I found this Lazy Budget many yrs ago and always use it as a quick cross reference to see how things are tracking.

10% Pay yourself

A good start but double or triple this if possible.

25% Housing

If phone & electricity is included it could be more like 30-40% of total. But if you own your PPOR it’s less.…[Read more]

(copied from my website – if you’d like the info to be presented in a more readable format – see http://www.alphalink.com.au/~parkerp/invbook.htm)

** General Investing

Make your Fortune by 40 by Paul Clitheroe

For those who aren’t content to keep working until age 65, this book describes how you can speed up your wealth accumulation through…[Read more]

Hi Thayer

I come from SW WA and I haven’t even heard of the place so it must be tiny!

I agree with others re independent research.

$100pw @ $65k is pretty poor given the size of the place. $110pw @ 55k is not bad, but my gut feeling would be to favour an even higher return for a place so small unless you think it’s got growth prospects. Also…[Read more]

Pisces133 wrote:

‘Very few properties are unrentable.’

The thing that amazes me is the number of retail properties that just sit there vacant, for years if not months. And there’s not even a ‘to let’ sign in the window of the now derelict property or signs of renovation activity.

The owners must be happy to tolerate the year in year out…[Read more]

Hi Karan – some brief reviews of (mainly property) investing books appear at http://www.alphalink.com.au/~parkerp/invest.htm

Regards,

Peter

Hi RM – good luck with your hunting in Geraldton.

Things are certainly on the move up there. I’d say up maybe 10-15% since July/August[]. Now >7% would be the exception rather than the rule [].

Regards, Peter

ChanDollars wrote:

Beside lock in interest rate, you can have some cash reserve in high interest rate account. If the interest rate rise then you can inject those cash into your home loan.

I’ve wondered about this. If you were getting 5% interest, after tax you’d only just be keeping up with inflation. Not good!

Wouldn’t it be better to put…[Read more]

A few months ago saw a group of 3 shops in an established Melbourne suburb up for sale. The sign said $100k pa rent/year.

Residential yields in the area are around 3-4%. So allowing for the higher yields for commercial and the risks of nearby Chadstone expanding, I thought maybe it would go for a bit over $1m.

I stumbled across the auction…[Read more]

Growth vs yield debate flares up again ; )

It all depends on what you want. High long-term wealth or to replace your work income with passive income as soon as possible.

Instead of having an aim of owning $X m of properties, I prefer to have rental income exceeding $X k/year or 50% of total income (work and non-work).

To do this requires me to…[Read more]

To answer the question literally, Jan Somers’ ‘Story by Story’ has an account of someone buying a house at an auction for $100.

Only problem was that the successful bidder had to arrange it to be transported and stumps put in ; )

But if you want the land as well, Norseman WA not a bad place with $15k houses advertised on the web. Nullarbor Plain…[Read more]

Peterhen wrote:

>I understand the trips are tax deductible

My understanding is that the initial trip to an area to buy a property isn’t. However subsequent visits to do an inspection or maintenance are.

>but flights, hotels and car hire are pricey and >will already eat into any potential ‘profit’

I would suggest looking at ways to cut costs…[Read more]

Richmond wrote: ‘heard on the radio this morning Aussie dollar is tipped to go over 80 cents by middle of year’

I hope it doesn’t. My IPs are in regional areas dependent on export income. A higher $AU dollar means less cash flowing in

In contrast, consumers in the city get cheaper imports, which may mean that subsequent interest rate hikes…[Read more]

I’ve noticed that property books are taking up less space on the bookshop’s shelves, and my weekly visits should probably be cut down to monthly!

A few comments that some might find helpful re property books appear at:

http://www.alphalink.com.au/~parkerp/invbook.htm

Re Anita Bell, her IP book is subtitled ‘…. triple your returns in 3…[Read more]

Hi Redwing – most timely for me – Dec 31 is the day to look at the portfolio and see how it’s growth over the year.

I started doing something like that about 7 years ago, and used net wealth as a measure of progress.

About 12 months ago, I started questioning this approach as being a diligent saver and having $20k more than the previous year…[Read more]

Hi Benno – I also agree about having a portfolio of both yield and growth assets (can include shares or property). You buy the yield assets mainly for your income and can sell some (but preferably not all!) growth assets to reduce debt when you want to retire. Also the growth can reduce your LVR when you want to borrow more, while the yield…[Read more]

Hi nevbogus

‘my problem with that is, even with zero capital growth for the entire term, the investor will own the property outright after 25 years, for about $2k per year!’

This is OK for some people, but what if you want to become financially independent in a time span shorter than 25 years? And why pay $2k per year when you can by a larger…[Read more]

Presumably annual rental/property value

There was an article recently in API which gave a figure of approx 8.8% yield – this was when interest rates were about 6%, and allowing 2.8% for other costs. Can’t recall what % LVR that was for – 80, 90 or 100%?

Now interest rates are higher, surely the required yield would have to be over 9% now?

Peter

Hi Kev:

Matt & Mel have given good answers, so I’ll answer other bits of your question.

‘do they give different returns?’

Returns comprise both yield and capital growth

Which of these is most important to you? High yield so the property is self-financing and provides you with an income to retire on, or capital growth so your wealth grows and…[Read more]

Wealth Creator Magazine appears to be associated with NII/Henry Kaye – see

http://bulletin.ninemsn.com.au/bulletin/EdDesk.nsf/0/B7EF9A573E009A1ECA256D270009B77B?OpenDocument

So it will be interesting to see if the magazines and seminars keep going or not.

In the meantime, it might be wise to limit your liability to the subscription you’ve…[Read more]

I recommend both these books, which you’ll find at almost any reasonable bookshop. If you could only get one, I would go for ‘The Millionaire Mind’.

Most ‘get rich books’ detail an approach that (we hope) actually worked for the author. Reading other people’s stories is educational, but success may not always be reproducible.

In contrast…[Read more]