Hi Ed,

After having recently read Steve McKnight’s “0 to 130 Properties in 3.5 Years” I have learnt so much and now look at property investing in a very different light.
According to Steve’s book, quickly using the 11 Second Solution shows that this particular property you are considering purchasing is not a wise one to go ahead with. He talks quite a bit about Negative Gearing and does not recommend it unless your tax liabilities are quite high, and judging from the income you’ve stated, I don’t think this applies in your case. You would be out of pocket in more ways than one: the deposit and closing costs (stamp duty, conveyancing, etc), the difference needed to pay the mortgage on the property, maintenance and rates, real estate agent management fees, capital gains when you sell and finally the difference inflation will make on your “profit” between time of purchase and time of selling. Please note that statistics show that it takes the average home ten years to double in price, and this will become an even longer time period as time goes by. Another point to consider is by the time you DO (assuming you would) make a net profit, what will that money do for you in ten years time? I doubt it would provide you with much of a retirement package, re-investment ability or anything else you might have planned for it.

I wouldn’t rush into making a quick decision, do your homework, maybe read Steve’s book and then make a more informed decision. There are plenty of other ways to invest in property and make money in a better way than simply to guy a negatively geared property. In fact, I’ve read several times now, both on this website and from other testimonials in Steve’s book, that the first think Steve and his partner advise people to do is SELL their negatively geared properties and invest in other ways.

Only one week ago, I was in the same position you are in. My husband and I were looking to invest our hard-earned money in another negatively geared property. By chance I bought the book and started reading. It answered so many questions we’ve had about why we felt more trapped than we did before investing in the first property and why we’re working harder than ever and not being able to move forward very much. We’re now planning to put our first investment property on the market, and invest in more POSITIVE and PROFITABLE ways.

Read Steve’s book, it was the best $33 I’ve spent in a long time.

Good luck with it all, no matter what your choice ends up being.

Kind regards,

Rosa Cornell
Cornell Concrete Constructions
Cornell Developments