My brother has a mix of commercial and residential IP’s. His commercial stuff gives him great yield but at the cost of capital appreciation. Over the last few years his residential properties have almost doubled but his commercial properties have lagged way behind.

He has also suffered the classic nightmare scenario with his commercial stuf…[Read more]

[biggrin]

Hi Dan,

Just for anothers answers.

1) Correct. Unless it has been reno’d lately, then you can depreciate that.
2) Yes
3) Yellow pages / google it etc
4) I prefer brick, tile and aluminium windows. If you are a true buy and hold this set-up requires the least maintenance. Also, in say an area predominated by fibro a brick home might let quic…[Read more]

I think a lot of people are going to say they should’ve started investing earlier.

On your deathbed I bet you’re not going to remember the time you entered the market and reminisce about the money you made! More than likely you’ll recall the worthwhile people in your life and the positive (hopefully!) legacy you left behind.

Balan…[Read more]

C’mon guys most business thrives on the stupid / uniformed!

If everybody was brilliant where would most of the business be?

Cut your teeth on residential tracy. Maybe venture into commercial after you’ve held and understand residential for some time.

Example
Brother thinks he’s a bit of a guru with residential so ventures into commercial. Gets hit with a 6 month vacancy and looses tons of sleep trying to solve his dilemma. Finally gets a tenant with the lure of a…[Read more]

Hi Domo,

Don’t deal directly with the banks anymore. Get yourself a good Mortgage Broker!![biggrin]

Example:
Boss at work is with one of the big banks. He deals with them directly on a regular basis because he’s building, releasing equity etc, etc. He feels he’s not getting a good deal so he sees my MB. MB instantaneously gets him the 0…[Read more]

Hi Domo,

Be careful. Say you pay it into your IP loan and want to draw on that $100k for a new car. There goes your tax deductibility.
If you put that money in an offset account against your IP loan you could draw out the money for a new car and that would be tax deductible.

Excellent information there Henry!

Thanx mate[biggrin]

My father self managed all his own IP’s. What a nightmare! I must admit he probably didn’t go about it the smartest possible way but it was truly a pain for the whole family.

Also a solicitor I did business with a few years ago warned about self-managing down at Sydney’s northern beaches. He said that some tenants who have trouble rentin…[Read more]

My accountant did this and made a fantastic profit. BUT, the deal was struck in the lead up to the boom so his CG’s were dramatically improved because of this.
Today, with flat growth etc, it might not end up the performer you think it will be.

I know many people, (friends, family members etc), who invest in Sydney, north, south, east and west (be it PPOR’s or IP’s) and in the long run they’ve ALL done really well.

If you buy into a typically high capital gain area your purchase price leaves you very –ve geared and not able to purchase too often. In other less desirable area…[Read more]

As we lemmings all gather around our putas typing to each other…….[blink]

Hey Mono,

Now I know you’re just trying to get your post count up!!!

But guys (here I go contradicting myself again).

Putting in a 20% deposit (other equity etc) would result in a –ve geared situation. If the property is reasonably well positioned you would hope its value would double in the 9 year period wouldn’t you?

Considering the –ve geared component, depreciation etc would you show a reasonable pro…[Read more]

How longs a piece of string xon?

Some people are passionate about owning their very own place and some people forgo ownership and sign up for multiple Ips and rent the place they live in. It all works in the end.
I personally like the idea of buying my PPOR first then invest second therefore your option 1 appeals to me.
I would purchase a PPOR…[Read more]

I had looked into these investments a few years ago and this is what I found.

1) Their properties are at least 15% more that a comparable property in the area.
2) Their management fees are quite substantial compared to local REA’s.
3) If rents for the area go down (general oversupply etc). They can REDUCE their rents to match.
4) After 9 year…[Read more]

I like Ausprops thinking a neutrally geared portfolio is the way to go.

If you’re out of work it can look after itself. Also there’s no financial pressure on you so you have nearly your entire wage at your disposal.

Although, negative gearing is beneficial for those of us who earn a huge income only to see it go in tax. In that situation…[Read more]

Actually C@34 I don’t think you can loose at all in the long run! (As long as you have asbestos undies!)

Basically Jan USED to say buy when you can afford but check out Building Wealth in Changing Times page 158 paragraph 2. (Have a look in the book)

Buying just before a possible price correction could be dangerous to your equity and furt…[Read more]

I can see it now, in the future, down at the agents. “We’ve also got this fabulous near new house in Ryde for rent affectionately known as the death house……interested? You can make an offer…….please?

Or when you want to offload it…..
“But sir that offer is 35% below market value surely you can offer more !”.

I wouldn’t touch it!!!