Hi Tig3r,

Welcome to the forum.
I’ve been in your shoes, having a passion for a sport (cycling), working (for stockbroker) and studying (accounting). They were fun times. After working 5 years I did stop for a while just to cycle, which was a stupid idea financially, but I will never look back and say I wish I had have given it a go, because I did, and boy was it fun.

You have put yourself in good stead for the future, being in finance. You are probably bored because you are not challenged by your current work. Get to know inside out, the investment vehicles and strategies being used at work. Knowledge is where investing starts. Get to know the the right people at work, that can help you move forward. Make it quite clear that you have other passions, and they can usually be easliy accomodated. I used to leave early to go to races, or start later to on Wednesdays to get a 100km traning ride in before work. What I did wrong was to not continue to educate myself, I just plodded along. I even knocked back a job to move into the area of options trading, when the guys working there were making there first million by their early 30’s, and this was back in the late 80’s. (yes I’m twice your age,now).

I always suggest that people start investing in the short term money market. It beats having savings sitting in a bank, it’s not tied up for to long. Too many people who say are saving to get into the property market to buy their first investment, put their savings into a bank acccount. Why not learn about another investment vehicle in the mean time and put the funds into a term deposit. Sound simple but often overlooked, banks just love people who park Tens of 1000’s in a bank account.

Follow your passions and enjoy the ride.

Mal

Getting out of your comfort zone, can help you become comfortable

There is no point putting in a low ball offer unless you can substantiate the offer with verifiable facts or other data. Otherwise it’s just a punch in the guts, insult.

If you really want a property and other may be interested, don’t muck around, make your first offer count. The agent is interested in finding out how much you are prepared to pay, and getting that, not playing games.

If you pursued the property based on numbers, be prepared to walk away based on the numbers not working out, not the emotions.

Mal

Getting out of your comfort zone, can help you become comfortable

Skills shortage, maybe !!

But definitely, “Too many clowns , not enough circuses”, I’d say.

Mal

Getting out of your comfort zone, can help you become comfortable

If you are unable to settle, and you are not even in the position to move the settlement date, then don’t be expecting any change from your deposit. And depending on subsequent costs to the seller and if they are unable to get the same price that you had offered, then they have every right so sue you for those costs and difference in the sale price.

If you are buying in QLD and finance is still possible to settle at a later date. Don’t assume that the seller will allow you to settle at a later date. The Standard 30 day settlement is pretty rock solid and the seller has the right to cancel the contract , at your expense, if you fail to meet the terms of the contract.

Mal

Getting out of your comfort zone, can help you become comfortable

I think I’d rather live in [sunny] Perth than Melbourne anyway regardless of the price of housing.

Mal

Getting out of your comfort zone, can help you become comfortable

C@34,

Yep, I’ve never had a valuation done on new purchases of IP’s. As all my IP’s are interstate, I’m simply required to sign an “Out of Region Form”. Which basically says that yes I’m aware of the possibility of 2 tier marketing interstate, but I’ve done my homework.
Stamp – Loan Approved.

Mal

Getting out of your comfort zone, can help you become comfortable

natwayne,
Derek’s question is pretty valid , if this looks like a problem tenant, put it in the contract that is to be vacant posession. It much easier to get rid of them now rather than later.

JVT,
I’m from Sydney, and have an IP in Perth [biggrin]. I don’t think that Perth will come to a screaming halt just yet. And before there is any 8-10% correction, I think there will still be an increase of at least that much, this year alone. There may be areas that are at or near their peak but there is alway the ripple effect and that is where things are at the moment. The feeding frenzy causes more ripples.

After things have slowed down a bit, that’s when you go and have your Perth places revalued, and borrow against the increased value.

Mal

Getting out of your comfort zone, can help you become comfortable

Worst case scenario, you will no doubt get more than 1 offer from a financial institution over then next couple of months to take up an offer on their new and inproved credit card.
Take up the offer, cash advance the interest required while on holidays. Hell of a lot cheaper than selling.

Mal

Getting out of your comfort zone, can help you become comfortable

As I have a mortgage over my PPOR, my strategy is to reduce that personal debt. I have 2 account withing my mortgage over my PPOR. 1 personal, 2 Investment.

All my IP’s have seperate loans with a different institution to that of my PPOR. All but 1 IP loan is Interest Only, (The 1 P&I will be changing soon to IO, after a revaluation) . I try and keep the LVR at 80% in all my IP’s, until I have paid off the PPOR.

PPOR Investment account is used to: Buy Investments, for the deposits on IP, IP Expenses.
All rental income goes into my PPOR account 1.
Each month I redraw or sweep across from the PPOR, the interest for the PPOR Inv Account, and the IP loans.
When an IP increases in value, I have it revalued and upstamp the mortgage over that particular property. The funds are paid into the PPOR Investment Account, thus simply shifting the debt from my PPOR to the IP’s mortgage, and freeing up more funds in the PPOR Investment account for another Investment and IP expenses.

Goods –
For me it’s a good strategy that help pay my PPOR faster.
All IP expenses are also borrowed, leaving more money in my PPOR mortgage.

Bads –
The finance structure should have been set up differently from the start so that the PPOR Investment account was a Line of Credit, it would have been easier to manage.
Why ? it’s a pain in the butt to manage it as in Interest Only account. And at the end of an IO period it reverts to P&I, meaning that I have to channel more money into the investments.

I plan to change this structure in the very near future to be more flexible.

Note: I manage the PPOR Investment loan so that I know exactly what portion of that loan is associated with every property. When I refinance an IP, I am simply shifting the debt associated with that property only. Gotta keep the tax man happy. Plus much simpler if I decide to sell a property, to know what debt to pay off and what money can go into my account. Not that I have ever sold a property.

Mal

Getting out of your comfort zone, can help you become comfortable

Hi Insan3,

No one in their right mind should look at a -CF of -N Geared property if they do not take into consideration the expectation of Capital appreciation.

It’s not about getting a tax break, -N Gearing is just more tax effective if you are in a higher tax bracket. The Strategy of negative gearing or having a negative cash flow should still ultimately be about the Capital Gain expected from being out of pocket.

I have -CF properties that in total cost me about $12,000 a year to keep, they have however over the past 12 months had capital gains of $75,000. If I didn’t expect growth there is no way I’d have purchased these properties. Rents have also increased by 12% in that time.

There is also Depreciation to consider. In you example $2800 may not be an unreasonable deduction for depreciation.

Mal

Getting out of your comfort zone, can help you become comfortable