hi, i have 50K cash and approx.80K in equity on my home. I am in a high tax bracket and are ready to start investing. I have done plenty of research over the last yr and are just wondering, for the people who are already property investors, if you were in my position, where would you start. I have considered building, bying a couple of units, or one old character home and so far these look like the best options. I have looked into buying off the plan, and apartments and really think its not for me. I suppose positive cashflow would be a great way to start but almost impossible initially for older homes.. Im lookingat at a 10 yr plan..
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Susie.Welcome aboard GT [
]At the risk of being a pain, I’g going to answer your question with a question of my own.
Your Q: If you were in my position where would you start?
My Q: Where would you like to finish?
Personally I’ve never been big on planning or setting goals, but if there is one thing I have learned so far, its that it is of VITAL importance in your financial endeavours that you sit down and work out what goals you want to achieve through property investing, and then develop a plan that will help you to achieve those goals.
For example, I’m a 23y.o Uni graduate about to start work full time. My only cashflow will be from this job. Starting from July of this year, I have set myself a goal to generate approx $50,000 in passsive income over the next 5 years. Traditional “buy and hold” strategies wont work for me in achieving this goal, so I will need to adopt a more creative approach (ie. “Wrapping”) which will require me generating arpund $10,000 of additional cashflow from properties each year, which in turn means acquiring at least 4 properties each year that provide an after-expenses return of $200 a month per property.
This is just a simple example using one of my own goals to demonstrate what I want to achieve and how I’m going to try and achieve it. You mentioned that you were in a high tax bracket? I’d be inclined to think that you might want to invest in negatively geared property to reduce your taxable income? This may be an incorrect assumption, but in anycase it would help us, in helping you, if you decide upon what goal(s) you want to achieve through property investing. Then we will be in a much better position to help you out with your “Where do I start” question. [
]Regards,
Brett []“Even if you’re on the right track you’ll get run over if you just sit there.”
Gday gt
l think its important the first one goes 100 % right , so dont stick your neck out with some huge renovation plan. Keep it simple,buy a nice place in a good area thats easy to rent (Gee that was easy to say)and make this first one is a happy fun time also lots of research so when the right one comes along you see it MITCHThanx for replying so quickly everyone. I guess id love a passive income as well as a couple of investment properties to pass to my children when they are ready to move out and start their own life( about 10 yrs time). From writing my 1st post, i have actually read up on wrapping and feel like its something that may suit me well. Ive looked into the website of positivecashflow.com.au and it so far makes alot of sense. It is something worth looking into deeper but as usual, weighing up the risk factors is a must. How safe is wrapping?
I will continue to work through all the forums but its gonna take a while. by then property would have jumped up another 10%. But so be it..
Welcome aboard GT []At the risk of being a pain, I’g going to answer your question with a question of my own.
Your Q: If you were in my position where would you start?
My Q: Where would you like to finish?
Personally I’ve never been big on planning or setting goals, but if there is one thing I have learned so far, its that it is of VITAL importance in your financial endeavours that you sit down and work out what goals you want to achieve through property investing, and then develop a plan that will help you to achieve those goals.
For example, I’m a 23y.o Uni graduate about to start work full time. My only cashflow will be from this job. Starting from July of this year, I have set myself a goal to generate approx $50,000 in passsive income over the next 5 years. Traditional “buy and hold” strategies wont work for me in achieving this goal, so I will need to adopt a more creative approach (ie. “Wrapping”) which will require me generating arpund $10,000 of additional cashflow from properties each year, which in turn means acquiring at least 4 properties each year that provide an after-expenses return of $200 a month per property.
This is just a simple example using one of my own goals to demonstrate what I want to achieve and how I’m going to try and achieve it. You mentioned that you were in a high tax bracket? I’d be inclined to think that you might want to invest in negatively geared property to reduce your taxable income? This may be an incorrect assumption, but in anycase it would help us, in helping you, if you decide upon what goal(s) you want to achieve through property investing. Then we will be in a much better position to help you out with your “Where do I start” question. [
]Regards,
Brett []“Even if you’re on the right track you’ll get run over if you just sit there.”
Gettingthere Hi,
Ok,my reply is looking in hindsight at what we did and I hope it is helpful.Several years ago, we purchased a couple of negatively geared properties and obviously were putting in more than we could afford from our pocket. Listened to the negative gear advocates which is ok if that is your strategy/plan.
We sold one. Even though we had bought and sold for many years mainly through work transfers, we were not into investing as such. We have now really thought about a plan for cash flow so did lots of research into where, how much, and what outcome money-wise. The forum with a wealth of advice and ideas has also been encouraging. So when you ask what would you do, it depends on your plan if you have one, what outcome you want, and also if you want to use the cash you have as deposits on properties that will be positive and stand alone or use equity (tie in with your PPOR) and keep the cash for later. Not all our properties are stand alone and that is fine for us. Some tied in with our home, others we paid the deposit. We also wanted to purchase many quickly.
To answer specifically, “if I knew then what I know now,” I would go for cash flow first with several properties, even though you pay tax on the income, but it’s money coming in each month from the beginning. Also build my portfolio with a mixture of properties as other bargains come along too. The past 6 months has been very successful for us. Good luck. Anna
Gettingthere Hi,
Ok,my reply is looking in hindsight at what we did and I hope it is helpful.Several years ago, we purchased a couple of negatively geared properties and obviously were putting in more than we could afford from our pocket. Listened to the negative gear advocates which is ok if that is your strategy/plan.
We sold one. Even though we had bought and sold for many years mainly through work transfers, we were not into investing as such. We have now really thought about a plan for cash flow so did lots of research into where, how much, and what outcome money-wise. The forum with a wealth of advice and ideas has also been encouraging. So when you ask what would you do, it depends on your plan if you have one, what outcome you want, and also if you want to use the cash you have as deposits on properties that will be positive and stand alone or use equity (tie in with your PPOR) and keep the cash for later. Not all our properties are stand alone and that is fine for us. Some tied in with our home, others we paid the deposit. We also wanted to purchase many quickly.
To answer specifically, “if I knew then what I know now,” I would go for cash flow first with several properties, even though you pay tax on the income, but it’s money coming in each month from the beginning. Also build my portfolio with a mixture of properties as other bargains come along too. The past 6 months has been very successful for us. Good luck. Anna
Thanx for that Anna. I suppose knowing what u now and comes from experience and it makes sense to create cashflow first. For a beginner, to create cashflow can be daunting. Im just hoping everything falls into place…
hey there…..
Welcome to the forum and just remember that whether things fall into place or not is entirely in your hands. The more successful people I meet and the more successful deals I do I realise that you cannot wait for opportunity you have to be out there chasing it down. It isn’t always easy but it is tremendously rewarding and you can do it. Take your problems by the scruff of the neck and throttle them into solutions. Hope you enjoy the site.
Enjoy
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