Greetings everyone
In order to obtain any wealth , one of the questions to we to ask ourselves is “What is wealth?”
Is it free time? , Is it an abundance of money?, is it happiness?
Is wealth + geared, – negatively geared , neutrally geared.do you need building Dep? etc
Should you own a property that has a total cost p/a to run of $2500 yet gives you a gross return of $10500 p/a excluding any dep. then you are ahead. Do this five times and you will find you have a taxable income p/a of $40000.
All of this wthout any regard to dep.
Just a few things to think about.
Anyway its Sat night and time to go out.
Cheers all
R&J
“A bank is a place where where they lend you an umbrella in fair weather and ask for it back when it begins to rain
Hi,
I’m currently in Mackay, an area where properties that meet the 11 sec. solution are as rare as hen’s teeth.
Or so I’m told, except that there in yesterday’s paper is the following ad:
“Investors possible over 9% return”
This neat and tidy 3 bedroom home could easily be rented for $155 p/w which if purchased for $89,000 gives over a 9% return very hard to beat around town on residential property.OK – it’s outside of the 11 sec. solution, but only just. Perhaps this is the sort of property that would warrant further investigation to see if the numbers stack up?
This post gives you a good insight into the way that I find the majority of my deals… reading papers and scanning the net.
Of course, these options are available to us all.
Bye,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Steve, aren’t you supposed to be on holidays?
Anyway I am the same, holidays or not, I still always look and browse, we can’t seem to get it oout of our system.
I believe Townsville/Mackay/Cairns are good growth areas.
Hope you’re enjoying the sun!
10degrees in Melbourne.Hi,
In the strict sense of the word, wealth to me is defined as assets minus liabilities.
However, financial independence is the key term and it is the ability to choose whether you want to work or not. It is the freedom to pursue your interests and hobbies without worrying about how to pay for the bills and groceries.
Ideally, i’d like about $1,500k a week in the hand to achieve my lifestyle of freedom and choice.
This will hopefully allow me to eat out 4-5 times a week, maintain a decent car and motorbike, and 3-4 overseas holidays a year.
To get an income like this, i’ll need unencumbered assets of about $3m returning 5% per annum… something that is realistically achievable.
R&J: Studies of happiness seem to show it is independent of wealth or material affluence. But it may be related to the control you feel you have over your life. Many people point out though that it’s better to be rich and sad than poor and sad!
But if you can use your wealth generation to increase the control you have over your life, and exercise the greater opportunities available, you *should* be happier!
In these sorts of discussions, there are several important interrelated concepts. These are (with my definitions):
Retire: Having sufficient income to live without working.
Self-employed: Ownership of your own business which provides sufficient income to live on. Thus you are in control.
Financial independence: Having sufficient income to live without working for someone else or in your own non-investment business. Note that financial independence is midway between retirement and self-employment. This is because you still need to do some work, even if you have property and fund managers. However you have great control over when and how much you work (eg spend time in seeking new opportunities).
Affluence: Refers to lifestyle and having an expensive car, projection TV, personal butlers, etc. If you are wealthy, you can afford a affluent lifestyle with little strain to the finances. However if you are not wealthy you must borrow to fund this lifestyle. Affluence requires the purchase of depreciating assets, so detracts from your wealth.
Wealth: Simplest definition is based on the amount of money you have vis a vis other people. However I would also relate it to the work you have to (or don’t have to) do, so it’s tied up with financial independence. To become wealthy you must buy assets that appreciate or provide income. Wealth growth can be accelerated if you reinvest at least a proportion of the surplus. That proportion that is not reinvested can give you an affluent lifestyle.
In my view the affluent/wealth distinction is the most important one there is. Wealth must precede affluence. If you seek affluence before wealth, financial ruin WILL result.
But a lot of people (most?) want affluence first. This can cause unhappiness and financial stress (as posessions do not necessarily increase long-term happiness but do harm long-term wealth growth).
I have gone into this in more detail at: http://www.alphalink.com.au/~parkerp/essay22.htm
I’ve changed some of my opinions since I wrote that piece, but not the parts relating to wealth and affluence.
Peter
Hi Steve: The figures for the Mackay property are very similar to my IP in WA. They could have been better (10%, not 9%), but the property had a good long-term tenant and was in an excellent inner-town location, so I bought.
What I found most intriguing was the wording of the ad that was particularly pitched at the investor (giving rents and rate of return).
Most ads I see usually just give the price and say ‘ideal to move in or invest’ or similar. The rental levels are only occasionally mentioned, but it’s not too hard to get a rental list to get an idea. Maybe RE Agents are cottoning onto positive cashflow investors as well!
It’s interesting that most of your deals come from internet or newspaper ads (as was mine). My experience is that except in very small towns, not many advertised properties give 9 or 10% (at least in Vic, even in the Latrobe Valley).
It’s been suggested that rather than passively scanning the net or looking at papers, it’s better to strike up relationships with RE agents and ask about properties in their ‘bottom drawer’ that may not be up on window. I might adopt this approach (as well as scanning ads) for the second IP.
What do you think, or have you found that this does not give significantly better results than searching the ads?
Peter
Hi Peter,
It’s been suggested that rather than passively scanning the net or looking at papers, it’s better to strike up relationships with RE agents and ask about properties in their ‘bottom drawer’ that may not be up on window. I might adopt this approach (as well as scanning ads) for the second IP.Yep – I do this too, but at the end of the day, unless you are constantly calling agents then most agents pay more attention to the buyer walking in the door than the buyer on the phone.
That’s my experience.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
hi steve
i live in mackay and look at all the real estate papers in mackay you are right that the 11 sec propertys are hard to find here most of the ads that are in the 11 sec rule like the one you mention are normally asking for offers starting at that price and the real estate agent doesn’t charge a fee until sold so they put a low price on it but they don’t sell cause they really want a higher price or the house is out of town
Thanks Rob
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