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Hello,
Thanks for your thoughts.
Yes, that is basically what he suggests.
Workable in America but not really suitable for Australia as an investment strategy it seems.He suggests buying run down properties in good areas and then improving them and reselling and buying larger properties with increased capital gains.
You may be able to do this on your own house the first few times without having to pay capital gains tax but in the time it took to do this you could establish investment properties also.
Regards,
Scott.
G'day Marc,
With your investment property that you are renting out, are you paying interest only or principal and interest.
As it is becoming difficult to find positive cashflow properties how do you accumulate more than one or two with the cashflow needed to support the difference of interest payments on?
In todays market it might be better to buy an affordable house in an area you are very certain of future capital growth, buy 2-4 of these properties, pay interest only loan and then in ten years or however it takes to roughly double, sell off most of them if you have enough and earn 6% in the bank term deposit, which would allow the flexibility of not having to work.
The earnings would not be huge but you could live comfortably without having to work for someone else, you would be financially independent of the need for work and then make your work property investing.
Or sell off one house after ten years and with the profit made invest in more investment properties to sell as above but later down the track gradually buyer bigger house and then blocks of units.
Will you look for positive cashflow properties or expect capital gain?
Seems much harder now to find positive cashflow investment?
Would like to hear your thoughts.
Kind Regards,
Scott.
Hi Kelly,
Many thanks for your help.
We will have no debt on the land as it is a gift, so it should be easy to build a new house on the land and let it pay for itself with tenants.
What to do after that is the confusing part?
As we still will need a place to live, should we spend a larger portion of our savings to buy a house, or buy an investment property with a small deposit and have it pay itself off and then try to fund our own home but buy a more modest home or unit that we can pay off quickly.
The difficulty is how much of our savings and own money should we be using for these two or three different properties.
For the investments, I would imagine as little as possible, for our own home wouldnt it be a good idea to pay a large deposit and pay it off quickly since we cannot claim the tax benefit also?Many thanks again,
Scott
