Forum Replies Created
>>I rarely use the No Doc or Private Lenders as I ball-bust the regular lenders until they do what I want.<<
Come on now Rob, who do you think we are ? Seven year olds who still live in make belief land ?
Pisces
>>Did you note my post read: ‘A message from Robert Kiyosaki’?. Have another look.<<
I think one would generally be inclined to assume (rightly or wrongly) that if someone quotes someone else without mentioning one word of criticism that the writer of the post agrees with the quote.
Pisces
>>Pisces, joke, or for real? re: denmark?<<
I was only skylarking Mini basically because last weekend Denmark was in the news because of Princess Mary.
Pisces
I would be the last person to excuse Charles’ behaviour.
I do however find his wife’s behaviour abominable.
Because of her position, yes, she should have shut up and suffered in silence, not bring further disgrace upon the family.
Behaving in a prim and proper way comes with the territory. Sorry.Two wrongs do not make a right.
And that Fergie, she is in a (even worse) class of her own.
I wouldn’t be talking like that if ordinary people were involved.
Pisces
Wayne is quite right about trading in property is difficult because of the high costs involved (stampduty, legals etc).
Pulling out one’s initial money once the property has gone up in value that is fine.
Provided however one realises that continuously walking a tightrope means exposing oneself to the distinct possibility of being wiped out eventually.
No ifs and buts about that, a guaranteed certainty.
Pisces
Hi Ezy, you talked about pooling our money.
The problem is that then there would be too many Chiefs and not enough Indians.
I very much disagree with having a partner. Surely one doesn’t need a partner to buy a house ?
Pisces
Geez, have I ever stuffed up!!
I posted this “new” topic, only to find:
1. The real author (Monopoly) had already posted it lower down the topic list.2. To top this major stuff up off, I compounded it by thanking Mini, when it was Monopoly who replied to my original request.[confused2][glum2][glum][glum][glum][glum][glum]
A thousand apologies to both Mini and Monopoly
Greg F
Originally posted by Greg F:Thanks to Mini, who replied to my request on another topic, we now have a clear description of how to calculate the “traditional” Rental Yield formula.
I thought it warranted a new topic heading, as others may not find this post under the other topic heading.
Cheers and Happy Calculating
Greg F
******************************************
Hi Greg (it’s nothing impressive)There are so many ways of doing it (my way; which is probably the longer way) of doing it is as so:
Weekly rent (170 x 52 = 8,840 annual rent) divided by cost base for property (100,000) multiplied by 100 = 8.84%
Using Karl and Rita’s figures:
170 * 52 / 100,000 * 100
8,840 / 100,000 = 0.0884 X 100 = 8.84Another example:
220 p/w X 52 = 11,440 (annual rent) divided by cost price of say 150,000 – hence
11,440 / 150,000 = 0.0762 X 100 = 7.62%Have fun!!!!
JoHi Jo
Awesome! Thanks for your clarity, and your worked examples.Now I know what these RE agents are talking about when they’re trying to impress me with fancy figures about the rental yield of a property they’re trying to sell me which is nothing to write home about.
I can also see how your method compares with the 11 sec formula. Example:
$100,000 property returning $200/week rent
Rental Yield
Step 1: $200 X 52 = $10,400
Step 2:
Dividing by cost of property (100,000), then multiplying by 100 is the same as hopping the decimal point 3 places to the left$10,400 three places to left = 10.4%
Yes!!
Thanxs again, Mini
Greg F[/quote]
Originally posted by Greg F:I’m impressed with your Rental Yield figures. Thanks to Steve’s book, I know how to work out the CoCR (Cash on Cash Return) but in all my years of property investing, I’ve NEVER learnt how to work out the more “traditional” Rental Yield. Do you mind teaching me:
1. The formula and, if it’s not too much to ask…
2. A couple of worked examples?Hi Greg (it’s nothing impressive)
There are so many ways of doing it (my way; which is probably the longer way) of doing it is as so:
Weekly rent (170 x 52 = 8,840 annual rent) divided by cost base for property (100,000) multiplied by 100 = 8.84%
Using Karl and Rita’s figures:
170 * 52 / 100,000 * 100
8,840 / 100,000 = 0.0884 X 100 = 8.84Another example:
220 p/w X 52 = 11,440 (annual rent) divided by cost price of say 150,000 – hence
11,440 / 150,000 = 0.0762 X 100 = 7.62%Have fun!!!!
Jo
[/quote]Hi Jo
Awesome! Thanks for your clarity, and your worked examples.
Now I know what these RE agents are talking about when they’re trying to impress me with fancy figures about the rental yield of a property they’re trying to sell me which is nothing to write home about.
I can also see how your method compares with the 11 sec formula. Example:
$100,000 property returning $200/week rent
Rental Yield
Step 1: $200 X 52 = $10,400
Step 2:
Dividing by cost of property (100,000), then multiplying by 100 is the same as hopping the decimal point 3 places to the left$10,400 three places to left = 10.4%
Yes!!
Thanxs again, Mini
Greg F
MIsty, some lenders will increase the loan as long as the title has been transferred to one’s own name.
This means that if the valuer places a higher valuation on the property than the actual purchase price one will be able to increae the loan without incurring the penalty charges you mentioned in your post.
Pisces
>>Is there anyone out there that can enlighten the forum with their story or a story they have heard of?<<
What is that ??? Thinking of writing a book ?
Anyway, a friend built a super market but the council didn’t want to sign off on the building because the doors were deadlocked and couldn’t be opened from inside.
The Council insisted that a burglar who broke into the shop should be able to open the door from the inside just in case a fire broke out.
Is this first or second class stupid thinking ?
Pisces
>>I am of course EZY with the concept of sitting back and watching my money grow<<
Good for you that you are young.
However, in the present climate that watching business may for the next few years well be a lot more boring than watching grass grow .
Pisces
Monopoly said :
“It’s not how much debt you have, it how much your assets are worth & whether you can repay the debt.”
I would think it would sound better if that statement were to read :“It’s not how much debt you have, it how much your assets are worth in a forced sale”
When everything is hunky dory there isn’t any problem. It is when one runs into financial strife that problems may arise.
At least I imagine that Jo’s question, which started off this thread, referred to the time when one may run into a financial hardship situation.
Personally I believe that people who gear as high as 95% (or heeavens forbid) 100% loans are walking a tightrobe. Anmy bit if wind will make one fall.
Yes, I can understand that someone just starting out may be highly geared.
The question however is ‘At what stage should one reduce one’s commitments ? (so as to provide a higher margin of safety)’
Pisces
>>Some people find loud laughers to be a little annoying. Even I do to an extent. I get annoyed at myself!!!
<<Cremin, if you genuinely want to cure yourself of that terrible disgusting laughter there are two solutions :
1.Record that annoying hyena laugh on an endless tape and start playing it to yourself day and night.
You will soon get so fed up that you will change your habits.
OR
2. have yourself wired up to a contraption that will give you an electric shock everytime you laugh uproariously. Any self respecting engineer will be able to put this together for you for less that a thousand dollars.
Unless you are able to reform yourself no Princess will ever want to have anything to do with you and that isn’t really what you want, is it now ?
Pisces
>>i think the best and safest way is to buy cash positive homes that will appreciate in value. <<
All well and good Westan, but not really a solution for someone who is basically too old to wait that long.
Pisces
Originally posted by Monopoly:Hi and welcome Karl and Rita,
Some quick calculations shows that your IP has an 8.84% rental return, which some would agree is okay, but not fantastic. I personally think it is fine, but there are those who prefer (wouldn’t we all) at least 10% returns.This calculation is not taking into account the agent fees and/or rates. Which obviously alters the figures, but still makes for a good return. Other factors need to be considered, and there are people here which have heaps of experience is crunching numbers, looking at mortgage repayments etc. I am sure they will post some valuable info at some point (you just gotta wait a bit).
All in all, it sounds promising.
Cheers,
JO***************************
Hi MonopolyI’m impressed with your Rental Yield figures. Thanks to Steve’s book, I know how to work out the CoCR (Cash on Cash Return) but in all my years of property investing, I’ve NEVER learnt how to work out the more “traditional” Rental Yield. Do you mind teaching me:
1. The formula and, if it’s not too much to ask…
2. A couple of worked examples?It’d make a good post under a new heading.
Cheers
Greg
Quote:Originally posted by Karl and Rita:[wacko]
We are looking at our 1st investment property and we’re a bit confused as to wether it’s +ve or -ve cashflow. These are the numbers:
Price: $100,000
Rent : $170 /week
Rates: $1200 /year (approx)
agent fees : 8% ($13.60/week)
insurance roughly $600 /yearIs there anything we’re missing? How much should we offer? We have no idea what we’re doing as this is our 1st investment house and need lots of help and advice.
Thanks
Karl and Rita.
p.s. Where are these so-called positively geared houses?Hi Karl and Rita
I have 16 properties (PPR, 3 -CF and 12 +CF). Steve McKnight would say your deal doesn’t fit the 11 sec formula, and I am mostly able to find properties now that can match or do better. What town/area is this property in? How old is the building (i.e., does it qualify for depreciation? and if so, how much?) If it the deal you’re talking about has good prospects for modest capital growth, then I’d be happy to go with it as a LEARNING EXPERIENCE.
One key point re 8% Agents Fees:
Some agents try to hit you up for 10%, 8% etc etc. I pay no more than 7% by letting agents know I’m a serious investor and if they look after me I may come back into their town and buy more properties.Try squeezing them for an extra 1% off, but you may have let it slip you’re new at this game. Remember,
1. Only 1 in 200 property investors own
more than 5 houses
2. By joining this forum, you’re well on
the path to being well ahead of the pack
3. Don’t let any agent think you’re new at
this game. Keep reading books plus ALL posts you can on this forum, and you’ll be able to pose with the rest of us!![biggrin]Cheers
Greg F
Originally posted by RussH:Brad,
If the problem lies in the fact that you are making a capital gain and therefore increasing your income for the year then you will be assessed on that income and you may have to pay more child support.If this is the case you need to ask yourself a the question.
1.Am I avoiding my responsibility to pay maintenance and depriving myself of possible good gains which I can better put to use elsewhere?
Dont hold yourself back for fear of others benefitting.You will also benefit in the long run.
RussHi Russ
I second your comments above. As a +CF investor from Gympie, all I can say is “well done” for buying 2 blocks of land in Cooloola before they rose.
I’ve done nicely on Qld’s Sunshine Coast as well
Cheers
Greg F
>>Put your funds in a cash management trust.<<
Parking one’s money there , yes I agree.
Keeping it there isn’t going to solve one’s problems, not after firstly, paying tax on the interest earned and, secodnly, after allowing for inflation, how much has one actually advanced ?
One will probably have gone backwards.
Pisces
Originally posted by dannads:Hi All,
Anyone here from Ayr or who know about the place? I have found some reasonably good deals there but am not familiar with the area.
Cheers
DannadsHi Dannads
I hope you snapped up this good deal you’re talking about at Ayr. I’m from Qld’s Sunshine Coast hinterland (Gympie), and I for one would love to hear about your experiences in Ayr.
Please let us know details of the sort of deals you’ve found in Ayr(vague generalities are fine: Price, rental, type of dwelling). I have 16 +CF properties, and can help you with demographic statistics links etc
For those who don’t know where Ayr is, click onto this map link. If you’re too lazy to hunt it down, it’s half an inch south of Townsville, Coastal Qld. This map link is cool, anyway:
http://www.arta.com.au/D9.html
Cheers
Greg F
Thanks, Jeff
Pisces
<<
