If a property is $110k and rents for $200pw, dont just dismiss it, find out more about this property, it might be able to claim a depreciation, even on an I/O loan the property might give +ve dollars back in a tax rebate. There are also other little factors that can make a -ve cashflow property into a +ve cashflow property.
this financial planner sounds like a complete !@#hole, stay positive, i wouldnt listen to a word he says, some of the richest people in the world have been kicked so many times in the face, yet look at them today. I bet there financial manager who rejected them is now feeling like the stupid one.
It would be interesting to get some statistics to see how many people on this website with investment properties actually do have some back up moneys sitting in the bank.
I do have backup resources, though i dont have money in bank, i have the money tied up in other funds that can be easily liquidated and access in a need for quick cash injection. Having money aside or ready for a rainy day i do believe is important.
This table is fine to work against, though this is the first time, ive seen it and im finding that for differnt properties in the same suburb, will all have different rental yeilds. Honestly i very much think CPI is only good to workout what the future wages maybe or what we could accurately guess or estimate what the current future values hold out.
thanks for the info, though i never mentioned anything about CPI, just the trends in that table, that show and follow.
The Indexation of the figures are only relevant, to work out the cost base of the asset.
There are 2 typs of ways to use the figures to cacaluate the following figures.
Indexation method.
Discount method
Knowing this and putting this value against your currnet rental value, you will see the indexation figure has some what a high degree with working out the CPI rate, that is caculated against the weighted average of the 8 capital cities used.
Try this, it took me a few shots to understand, but if you read the figures via its quartely mark, you will see the trend that takes place. Then with this trend you can determine what the indexation will proceed to be for future values.
Capital gains: indexation
Indexation is only relevant in working out the cost base of an asset acquired before 21 September 1999. If the indexation method (rather than the discount method) is used to work out a capital gain from such an asset, some of the cost base expenditure of the asset may be indexed to account for inflation up to the September 1999 quarter. Changes to the law mean that indexation is frozen at that time.