Hi,
Anyone have any thoughts on the properties listed on the edestiny site that claim to be cash flow positive?
Hi Michael and Kaye,
That’s an interesting comment. I have bought her book too but haven’t met M Lomas personally. The thing is, one of the properties which they have on the market at the moment (Swanston St apartment) was sold to me early last year. My accountant has worked out that it is negatively geared, and I will be out of pocket by x amount of dollars. Can’t remember now how much it is. Anyway, I was able to get out of the deal only because the developers failed to complete the project on time. The next thing I knew, Lomas was selling those same properties. I was keen to find out how she has worked it out. Rang edestiny and was told they will ring me back but didn’t get the call. Still very curious though. The property is a student accomodation with rental return of 6-6.5 rental guarantee. It’s fully furnished but of course the floor area is very small, about 30 sq only.
I am a bit unsure about depreciation too. Having attended a H & R taxation course. Just very basic training on taxation, we were told that the depreciation is actually included back onto the cost when calculating capital gains. For example, if you’ve claimed 100 dollars over the life of the item as depreciation, you have to put that back when selling. Would you know anything about this.
Cheers.She is not cash flow +ve to my way, she only becomes cash flow +ve by the depreciation of fixtures/fittings/building.
To me cash flow +ve means cash above and beyond all expenses, not including depreciation, very hard to achieve in reality.
Clearly everyone is now jumping on the cash flow positive bandwagon.
how is she able to get finance on such a small unit?
Resale of anything of this sort is very difficult, as its pitched at the investors market.I think it all comes down to definitions. We had a dsicussion about the differnet levels of the Lomas theory not long ago……
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=852
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=809Hope these help
Enjoy
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The banks now do not take depreciation & tax advantages into consideration when they look at service ablilty either. What happens if you loose your job?? Something to think about.
For example, if you’ve claimed 100 dollars over the life of the item as depreciation, you have to put that back when selling. Would you know anything about this.No, not quite correct in Australia with properties bought at this time BUT there is some truth to it in New Zealand under clawback.
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