Forum Replies Created
Yeah, most likely
Hi Derek
Yes I agree and that was sort of more what I meant.
Mining towns are always a risky option as your growth is always more dependent on external forces, like how much or the resource China or India are buying.You need to look for areas that have mines going in or just gone in. Towns like Moranbah are great for people who got in 2 years ago, but I fear if you got in there now you would be in trouble when rents drop and especially if owner occupiers are leaving town, there will be no one the buy the properties.
It's Mom and Dad investor stuff there now. You know the types, they wait and wait until all the figures have been proven, then they get in. By that time it's too late.Their model has always been unsustainable!
The idea that you can live off equity borrowed back from a Bank when you retire is rubbish.
"Hi Mr Bank, I'm 70 and want to borrow $500,000 from you to use to live off for the next 10 years"
If your sole income is rent, then a Bank will normally only lend you based on 50% of your rent received.
And seeing as you would need probably 20 properties with extremely good cash flow, it's just doesn't work.Never Never Sell! is their catch phrase. Most people will have no choice.
luke86 wrote:PISTORE wrote:Catalyst wrote:PISTORE wrote:The idea with any property investment strategy is to aim for a neutrally geared portfolio.Really??? What's the point in that? OK if you're working a job I guess but it certainly wouldn't be anyones aim.
My investment strategy is to be POSITIVELY geared. I want to be making money. The more positive my portfolio is the more money in my pocket.
It's all about balance. Positively geared portfolios are great until you start getting taxed for the privilege.
The way I see it is that if you become positive geared then go and buy another investment property to offset your positive gearedness (if that's even a word) this way your problem keeps compounding, which is a great problem to have. If you keep aiming at a neutral portfolio then Julia can't get her bit and you maximize your opportunity for growth.Why would you buy a property to save tax?
Cheers,
LukeLuke, it's not about saving tax as much as delaying and minimizing when you have to pay it.
I would much rather invest the money in something I think is a priority than have the Government make that "excellent choice for me.Laury wrote:My assumption of neutral gearing is that after you have crunched all the numbers including depreciation etc Mr Taxman chooses not to take a cent off you but in reallity you have actually put a couple of dollars in your pocket. Please correct me if I am wrong!Essentially your right. It's about running the books at a balance. Remember, you don't make money from rent, you make money from growth. The rent is what enables you to cash flow the property long enough to make the growth.
EG: lets say you had 4 investment properties. 1 was Negatively geared and 3 were positively geared. If the numbers were done right, you could own all 4 of those properties 4 $0 out of your pocket every week.
After a while, your portfolio would by default become positively geared as the rents crept up, so, once it is, go and buy another property to off set the positive rent. You might have to buy 2 or 3 to try and balance it out, but if your capacity is there and your equity is there then there is no reason you could keep going until you had 100 properties.
Once you retire, sell 30 of them and then own the rest and get the rent from them then as an income.
Might sound good in theory, but works even better in practice.Catalyst wrote:PISTORE wrote:The idea with any property investment strategy is to aim for a neutrally geared portfolio.Really??? What's the point in that? OK if you're working a job I guess but it certainly wouldn't be anyones aim.
My investment strategy is to be POSITIVELY geared. I want to be making money. The more positive my portfolio is the more money in my pocket.
It's all about balance. Positively geared portfolios are great until you start getting taxed for the privilege.
The way I see it is that if you become positive geared then go and buy another investment property to offset your positive gearedness (if that's even a word) this way your problem keeps compounding, which is a great problem to have. If you keep aiming at a neutral portfolio then Julia can't get her bit and you maximize your opportunity for growth.Hi Laury
Really depends on your own situation as to what location would or what location might not be suitable to your numbers.
It's a tailored process, so not really a one size fits all scenario.
It is a some what fine balancing act that needs to be looked at in more depth, but with most locations we have seen, it's pretty easy to see a neutral cash flow.I don't believe you have to trade off Capital gain for income. You just need to find locations that have both. Sydney doesn't have Billions in infrastructure and Government Spending and nor does it have the same % in population growth many other locations have in Australia.
Your dollar goes a lot further in many other locations than it does in Sydney. You can buy a new 4bed home for the same price that you would buy an older unit in Sydney, and the older unit won't give you the same growth as what a well positioned house will.Thanks for the info Mattnz, although that is based on a dollar value in that report and not a % value, which Calliope was actually ahead.
Calliope is value for money, it's a lot prettier than being in a lot of areas in Gladstone. It's higher up too and has better breezes and is overall a lot cooler location, so the Poms moving in from OS will be happy with that
Paullie wrote:PISTORE wrote:Personally I would not be looking at Perth. Not to say that it isn't a great place. There has been many great stories of growth, but it is a VERY long way from the rest of Australia. This does tend to mean price fluctuations, when they happen, can be extreme.
A forgotten city that would be better to consider would be Adelaide. VERY good value for money buying and VERY low price points. The medium value is very low compared to the rest of Australia and there is plenty going on in and around Adelaide to really push prices up.No Mr PISTORE, the rest of Australia is a VERY long way from Peth and WA, which is holding up the rest of Australia.
That may have been the case, but with what is happening in SA and QLD, Perth will struggle to lure workers over there. Eastcoasters will do what they can to stay over here. They have just never had that opportunity before, now they do and that will be reflected as more and more of the Eastcoast projects open up.
If you still have a mortgage you need to look to keep buying in areas that are cash flow strong and yet still get good growth. Doing this will enable you to build equity so you could sell in a few years and pay off your current home loan, which in turn will open up plenty more equity to keep buying more investment properties if you so desire.
<moderator: delete advertising>Don't limit yourself to Sydney. There's a lot better value around Australia with FAR better rent returns.
Can't claim STD on your tax, so if you can buy the land and only pay STD on that, then build the house (you'll pay holding interest while building, but you CAN claim that) so building your own house and land V's buying finished is financially a better way to go.
Also, finished homes are usually more expensive as someone had to pay the holding costs while building and they will pass on the cost to the buyer.
<moderator: delete advertising>Neither, Wandoan QLD
3,000 people moving in for a new $6 Bill open cut coal mine, biggest in QLD, one of the biggest in the world
Close to Chinchilla, Miles and Dalby
Mine has already purchased over 40,000 Hectares of land and ready to go.
500 people currently live there so there will be a massive reason for property to be constructed to house all the other people moving in.
$1 Bill Rail Line approved, just waiting on the mine approval which will come any day nowHi Invqld
Calliope has had better growth than Gladstone City over the last 12 months.
It's cheaper and is a nicer location (not as industrial)
PM me if you need some further help or info.People forget that you are still getting tax benefits with a positive geared property. The idea with any property investment strategy is to aim for a neutrally geared portfolio.
Negative gearing effects your borrowing capacity and lifestyle. There is no reason you can't own 20 IP's and have them be neutrally geared. It's all in the numbers. Too many people look for property first and look at the numbers last. That's not how you should buy property.
It really has to be an individual thing tailored to suit YOUR lifestyle and YOUR numbers so it's not negatively geared.
<moderator: delete advertising>QLD = Winning!
QLD, like all states is a big place. There are hundreds of markets that exist so it's hard to say that a whole state is good or bad.
As long at you have Infrastructure, Government Spending and Population growth, it doesn't matter where it is, you will do well.
Don't get sentimental about locations, but rather look for the 3 factors above and you will see capital growth.Ant45 wrote:Hi Guys,I'm just starting to look at Gladstone with a view to a investing in a house. What suburbs would be your focus? The pure focus is capital growth with a reasonable rent return
Any help would be much appreciated at this early stage
Ant
Hi Ant
Really depends what your budget is. Gladstone is getting up there a little in price now. Still a VERY good place to invest though with plenty more potential for growth.
Rent returns are very strong. $500,000 purchase price will get you around $650pw, so the numbers are good.
There is a lot more going on there than people realize and I think it probably has 5 strong years then will start to level out a bit, but it is a growing city and could do a lot better than people think.
Mackay is a good place to look at too, it is probably 18 months behind Gladstone price wise, but has got some very strong reasons why you would buy there also.
PM me if you want any more info.
