I can see where you are coming from with this approach Fudge. I am 31 now. I bought my first house at aged 20 – 2 weeks after I graduated uni. I sold it three years later to quit my job and go o/s doing volunteer aid work. If I had applied the thinking you appear to be – pay down debt on fewer properties, I would be in a very comfortable position by now. At the moment, I am looking at +cf to help offset the negatively geared property i own – i didn’t purchase for negative gearing, but for capital growth. the +cf will help out a lot, and let the brisbane based property continue to grow with out emptying my pocket.
On the flip side, if i had had positive cash flow property way back then, I would not have had to sell to go o/s – horses for courses!!
Your approach sounds feasible and doable. good luck with it.
Lisa R
Hey fudge, houses built after ?a certain date? in 1985 attract building write off. Renovations and additions done after 1985 – eg bathrooms, new building work etc – on houses built before 1985 will also attract building write off.
Houses built before 1985 still have depreciable items in them – Hot water systems, garden sheds, curtains, carpets, stoves, light fittings, etc etc etc. Whatever house you buy, you should get a depreciation schedule done so you can maximise your claimable deductions on tax.
Cheers
LisaR
Yep cash-on-cash refers to the return on your cash input, as part of the overall ROI. Compare the opportunity cost of placing your cash part elsewhere to calculate the ratio of borrowings to cash input.
I see what you mean about younger properties for buy and hold. Depreciable and less presumed maintenance.
Hope to catch you again on this side of the world soon.
Having all one’s properties tied up for the one loan takes away one’s manoeverability.
If you get yourself into trouble it may be difficult to get one’s lender to increase the loan amount or, for that matter, to get the lender to release one of the properties (so you can raise money on it).
Another problem may be that if one happens to sell a property the lender may insist on some (or all) of the sales proceeds being used to reduce their existing loan.
So to place oneself in a better situation give a lender as little security as possible.
>>It wont make me rich but would give me a small income and perhaps the prospect of being able to sell the second house for a profit later on.<<
I would think it would be better to eventually sell the one you have been living in rather than the one which you have ben renting out as in that case the gain isn’t taxable !!
Nmcace, I happen to have had a bit of experience
in buying and developing commercial property in country towns.
The reason for my earlier response was in essence a knee jerk reaction as the agent’s advice means that more likely than not there is something drastically wrong and therefore the danger for buying a white elephant is great.
However ………………, looking at the details again it may nevertheless well be a deal.
If the present rent is the correct kind of rent then, upon getting the second shop rented, the nett return isn’t all that bad really.
It is extremely difficult (if not impossible)
to make a judgement without knowing more details.
For example, things like
1. what is the population ?
2. are these shops well located ?
3. are there many vacant shops in the shopping centre ?
4. what kind of tenant is the second tenant and what kind of lease are they on ? (something that I normally wouldn’t care about as long as the location is excellent)
I would think it rather difficult to make a judgement long distance and would much prefer to ‘get a feel’ by walking through the town.
Why not email me and I will be happy to go into a bit more detail ? [email protected]
How did you go avoiding the flood areas? I looked there a couple of months ago, but all was in the wet areas. I didn’t fancy the Fitroy river turning the houses into house boats if it went under again like the 80s.
I understand that there is now a law in place (in Sydney at least) which prevents carspaces being seperated from units. This means that no new (unattached to units) carspaces will come onto the market.
I guess that this is a very bullish factor.
Again, the main thing to look for is LOCATION, LOCATION, LOCATION.
Because of that I doubt that a carspace which produces more than 5% is a suitable investment.
Huh, bus shelters are old hat.
It is merely a ruse by that miserable looking Bob Carr looking for another way to raise some additional revenues.
The moment these bus shelters have been sold the owners will get slugged with a public-space-occupying fee.
If you think that is not possible think back to the time when banks were slugged because people were queuing up on the footpath to use the teller machines which fronted the street.
Councils were quick to charge the banks for the banks’ customers occupying public (yes, PUBLIC) space standing on the footpath waiting their turn to use the teller machines.
You know Carr is in deep financial sh*t the moment you use the harbour bridge. You would soon realise that Carr cannot even afford to have properly lighted signs on the collection booths of the harbour bridge.
BillFromOz should be thoroughly ashamed about trying to suck his fellow website visitors into such an atrocious investment.
A much better alternative is to buy the advertising signs attached to the back of taxis.
Some of the many advantages are that the signs have much greater exposure because of their mobility, no public-space-occupying fee can be levied on a moving target AND the acquisition cost is approx half.
The smart taxi operators buy a new (second hand) taxi every four years or so which sets them back about $ 12 K.
Many of them would be more than willing to sell the advertising space on the back of the taxi for around $ 3K.
That is for the life of the taxi (about 4 years). If you increase the purchase price to $ 6 K that will buy you the advertising space in perpetuity.
I understand that Taxis Combined in Sydney have only around 300 such opportunities left. Their phone number is (02) 8 332 8888.
I unequivocally state that, unlike BillFromOz, I do not stand to make any commission from any such sales.
Can you tell us her name Lisa? Just her first name and branch would be all we need. I’m just curious to know if she’s the same one I’m using.
Regards, Jim.
PS Thanks Stu, I’ll see if they will come to the party for a $1M LOC. (It’s for my JV partner, who has a long history with NAB, and has developed a sense of loyalty to them, even if they do charge him 1.3% more than Westpac!)
PPS Lisa your cool link doesn’t work. You need to delete the “www” from the front of it.
Jim
Hi Neill, I have a question I would like to ask about structures and CGT for NZ property. You had a mobile phone number here, but I missed it. Could you email me lrobbie at netspace.net.au so I can ask you some stuff??
Cheers
Lisa R
Hey Pin,
don’t forget to check when the BSS was constructed. Post 1985 – depreciation will be much better if you get building right off. Can you get post right off if you only buy a post stop rather than a shelter stop? What if the shelter was vandalised and rebuilt, is this a new building or a repair??????
What is 2.5% of a three metre pole with paint anyway? Anyone know a quantity surveyor who will do a drive past valuation and depreciation schedule (no standing in bus zones!!!!!!)[]
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