Steve from Perth, western Australia, I have two investment properties with a positive cash after tax, After reading Steve’s book, I now realize I have to change my strategy.
I am very interested in property with a cash flow before tax. I would appreciate it if some body could direct me in right direction for me to start looking.
Thanks Steve Ross.Hi Steve,
Welcome aboard. I hope you will get some great info here and that you will also be able to contribute.
You said:
After reading Steve’s book, I now realize I have to change my strategy.Why? Yes what made you come to that conclusion?
I am very interested in property with a cash flow before tax.Do you have a LOT of time to spare?
I would appreciate it if some body could direct me in right direction for me to start looking.You will find that there is no “right” direction. It only depends on EACH persons situation. However you will find heaps of info here, and I hope it will allow you to think about things and help you to know exactly WHY you want to do what you want to do and then once that is rock solid in your mind, nothing will stop you.
In the mean time you might be interested to read this thread, but please answer my first question (*Why?*) before reading it.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=4437
Cheers,
Pin
Hi I’m a first timer to this discussion board. I have 2 negatively geared, positive cashflow properties after depreciation and I’m very happy with the way my investments are going. Both properties are also in high growth areas and my first property purchased Feb 02 has gone up $30,000 on a Bank valuation. My income is over $65000 and I only pay 9% tax(instead of 47%) as I have submitted a tax variation form to the tax office. I can see that some positive gearing would be great in my situation as my tax increase from a positive geared property would be insignificant and an immediate positive cash flow would be great. BUT where are these properties?
Jane
Hi Jane
BUT where are these properties?Everywhere! You just need the *** TIME *** (and dedication) to find them.
First get on the net and start looking. Once you have found a place you will have to think about going there and see for yourself.
Also you MUST be IMAGINATIVE!
OK here are a few tips. If you are going to buy properties in rural towns make absolutely sure you know what you are up for. Also, Steve doesn’t buy properties in rural towns, only major towns.
So how do you do it? Here are some “positive geared” ideas:
– Rent to students. Buy a house next to tafe, uni etc… with five bedrooms and rent each room out. This will be positive geared but can be seasonal…
– Buy a motel/ hotel!
– Buy a motel/hotel and “remodel”the rooms into a studio and rent each room out.
– Buy a corner block of land and put 2 houses on it. (Warning! Your neighbors might hate you if you do this.)
– Buy “commercial” properties. (They generally are positive but you MUST know what you get into.)
– Look for flats in major towns. (they generally are +ve, but you will have to buy the whole lot in one shot. sts)Anyone else have some ideas?
Pin
Hello Pin, Thanks for your reply.
Why I came to that conclusion.
Why, because now I work abroad and the short fall comes out my pocket.
Why, because the properties do not look after them selves with out me working.
Why, because nothing is secure, and having a short fall and loosing my job, (not being negative) I would loose my investments, that have been working very well over the years.
Why, because at the end of the day I would like to have an income off the properties and start paying off one at a time and the snow ball starts rolling. In the mean time my personnel mortgage is going down in leaps and bounds, Once I purchase one there is no stopping.
Yes, you make the time and yes if I could help or contribute I would love to.
At present I have the two properties with very good growth, another off the plan getting built ( in which we will sell soon as built) and a small mortgage on my present house. We are planning on moving to a better area and either sell the existing house which is in a very good growth area with expensive developments happening close. We would like to rent it and purchase else where.
But the numbers don’t look good for what we would like to do. We are working at it, to make the correct move, as it’s a critical move and we would hate to loose everything because we made the wrong move. In the mean time I am asking the question about positive geared property in the west, and where to start looking.
Cheers Steve RSteve R
Welcome to the forum, I enjoyed both of your posts and want to applaud your for standing strong against two opposing opinions. You sound like a man that learns for himslef, good on and good luck.
As for where to start, a plan is a good place and it sounds like you are formualting that in your mind, get it onto paper so you always work towards it. Then research, that does take time, I love it, so you need to decide where you want to invest. I know this is your questions but I could name a bunch of places but if they turn out to be duds you’ll blame me (not that that matters but) you will kick yorself for not taking control! So the internet real estate sites are good for working out where they are, like realestate.com, domain.com, property.com etc. It helps to look at them yourself but thats up to you, maybe you know someone here that can do that for you. The 11 sec solution is a good bench mark to use and spending time in this forum as Pin said will give lots of info.
Hope that gives you something to think about. Good luck with your plans for the future, I’m sure you are going to do well.
Pin
Buddy, don’t take this as a flame, but, please try to be more mindful when you post replies like that to new people. We all know your position on neg gearing, I know you also try to sound like your view is on both sides but let people make up their own minds. And of course that menas they need to hear your view but let them get into the forum before you shove neg gearing at them, most already know about it and like Steve R already have them they come here to see what positive cashflow is all about. Pin I mean it this is not an attack on you just a request.
Kind regards
Leigh K[
]Carve your own path and lead the way …
Hi guys, great post!
Quote;
“So how do you do it? Here are some “positive geared” ideas:– Rent to students. Buy a house next to tafe, uni etc… with five bedrooms and rent each room out. This will be positive geared but can be seasonal…”
Pin, have you actually done this? I have contemplated doing this myself as I live between two universities.
Basically I’d like to know if you have manage it yourself or if you can have a property manager do it for. And if you have done it, or know someone who has, what was the experience like?
i.e. Good or bad?Cheers,
Sue [
]Be careful not step on the flowers when you’re looking at the stars
Hi Steve,
First I want to apolagise if my first post offended you in any way, but I misunderstood you.
In your first post you said:
I have two investment properties with a positive cash after taxIn your second post you said:
because now I work abroad and the short fall comes out my pocket.OK, if this is the case then positive gearing is fine. However my reply was based on your first quote…
However I would like to kindly point out that if you live abroad you will have a very hard time finiding them (this is a reality check). However nothing is impossible. If there is a will there is a way!
Why, because at the end of the day I would like to have an income off the properties and start paying off one at a time and the snow ball starts rolling.OK so here is another strategy that may suite *some* people. Why don’t you sell one property and put the profits into your other mortgages…
In fact something that works really well (if you have say 3 positive CASHFLOW properties is to sell one and and put the profits into the other two. They then become POSITIVELY GEARED!!!)
For every property you sell buy 2 other ones as well. (If you want I can elaborate a bit more later.)
Yes, you make the time and yes if I could help or contribute I would love to.The reason why I asked you to contribute was because you said you already had two properties, so you must be doing something right! I just thought you could share that with us.[
]
we would hate to loose everything because we made the wrong move.I completely agree, and wish you all the best!
****************
TheENJOLady
please try to be more mindful when you post replies like that to new people.I read my posts two ore three times before submitting, and I thought that I was being nice. (I really did!). What do other people think… I will be more careful then in future.
(that is the problem with forums people can’t see me. And for all it is worth I am a kind, thoughtful person.)I just want people to think for themselves…
We all know your position on neg gearing, I know you also try to sound like your view is on both sides but let people make up their own minds.I think you have not read me correctly. What I am saying is Positive cashflow (technically negative gearing) is not ALWAYS bad. (especially if you are on a large income.) That is all!
If you don’t have much then positive cashflow is the ONLY way forward. I completely agree with that.
Yes, my views are on both sides, because it depends on *each* pesrons situation!
And, yes, letting people make up their own minds is EXACTLY what I want them to do. If I wasn’t here, peole would think pcf props are the ONLY way.
Pin I mean it this is not an attack on you just a request.OK, but please make an effort to understand where I am coming from.
Why do I ask questions? Because it is good that eveyone knows why they are doing something and are sure that they are right.
For example I use to teach maths to a teenager. I would give him a problem and wait for the solution. If he got the right answer, I would say to him: “Are you sure” (with a look that insinuates that he is wrong.) and then I would wait… The reaction to this is very interesting. If they are not sure abou their answer they will say, “Oh, oh I think I made a mistake.” So they re do it this time MAKING a mistake.
I do this until, until they can tell me with a resounding YES that they are sure they are right.
Only then do I move on to the next level.You see if they can’t work out for themselves whether they are right or wrong doing exercises, I guarantee you they will get it wrong during their exam… We only have one shot at life, so get it right! but please let me make double sure that people know what they are doing.
Pin
Hi Pin
I read my posts two ore three times before submitting, and I thought that I was being nice. (I really did!). What do other people think… I will be more careful then in future.
(that is the problem with forums people can’t see me. And for all it is worth I am a kind, thoughtful person.)I wasn’t casting aspertions on your character at all, as I didn’t say anything about kind or nice, just mindful. Having said that I do think I was a bit harsh and fairly pull my head in[
].
You see if they can’t work out for themselves whether they are right or wrong doing exercises, I guarantee you they will get it wrong during their exam… We only have one shot at life, so get it right! but please let me make double sure that people know what they are doing.
I think you are 100% correct here, all I was saying is this is the “home of positive cashflow real estate investing” and new people come here to see what it is about, and whether it is for them or not.I think you are a fantastic contributor to the forum and am glad you help to provide a balanced view. Even if you can be very passionate[
], you must be Italian or something hot blodded like that!Cheers
Leigh K[]Carve your own path and lead the way …
Hi Diclem,
Sorry I didn’t repond to you previously, but you must have posted your reply wil I was still writing mine!
Anyway, here is the answer:
No I do not use this strategy personally but have read about it on the net and in the newspaper. There was a really good article on this once.
Some people bought a property with 5 or 6 rooms that nobody wanted. (so they go it for a song.).
They renovated it etc…– You can place adds in the paper.
– You can call the uni directly. A lot of them offer a service for you to advertise freely. Something on a website. They do this to help their students. (definitely worth a call.)
– Bulletin boards at the uni itself, next to the food hall or something.Should you take care of it yourself, or get an agent?
Well it depends on how much time you have… Another thought, you can make someone the “boss” and get them to collect the rent for you and make sure everything runs smoothly in exchange for a reduced rent. (Choose that person wisely!)
The experience is generally good.
– Japanese are the best
– Chinese are good but get oil all over the kitchen
– Ausies … well … hmmm, if they are not partying or drinking they are OKIt is up to you. Choose well, spend enough time thinking and organising it and it should work well.
Finally, people will pay a premium for special features like:
– Broadband
– A good desk with a nice chair and lighting
– Little kitchenette in their room
– Computer (you can get some really cheap ones, nearly free which are good enough for browsing the net and sending emails.)*********
TheENJOLadyItalian?? LOL …
Pin
Hello, Pin, Leigh , Sue and Jane.
Thanks very much for your comments, I think you are all correct with your opinions and impressed on how you write and manners.
Pin I was not offended and may be I came across a bit strong, also sometime its difficult when you some one doesn’t give all the facts and you have to read between the lines.
I work away for 28 days and home Perth for 28 days. Also I had to change my strategy over the years. I was on a good income in Australia paying the top tax, but situations changed eight months ago, I got transferred overseas, and now the income is better.
Also I gained more knowledge and also the last couple of years has been put into a One my year old and two year old daughters. Soon I can spend a lot of time regarding property, in the mean time I am keeping my investing simple, and always have an open mind and never stop learning.
I should also read my column a couple times before submitting.
Thanks for the web site to start looking.
I was under the impression you need a couple of growth properties to borrow and positive for the cash flow. I am trying to sort out a plan, that the properties look after them selves and over time with more positive properties and cash flow you end up with a income. I would never blame any body regarding me purchasing a property as its up to me to do the numbers.
I was hoping for a hint of a couple of towns I could start looking at, and I can do the research from their.
Once again thanks.
Steve R
PS, I like the idea about selling one property to make the numbers look correct.Hi SteveR
Have you got any thoughts about which state you want to invest in?
Cheers
Leigh K[]Carve your own path and lead the way …
Hi Liegh
I am going to try W.A first,m ake a start.
I do believe other states have more options regarding positive geared properties, guess you have to have a contact for that one or fly over to check.
Cheers Steve R.Steve
That i swhat I have found also, you find that the areas you will be looking for are a couple of hours our of Perth. Maybe start with a realestate.com search for the cheastest WA properties and then suss out the towns from there.
Cheers & Good Luck
Leigh K[]Carve your own path and lead the way …
]
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], you must be Italian or something hot blodded like that!
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