As everyone knows, the prices of houses are high.. waiting for the bubble to burst.
Is it still worth, finding a house in the burbs, ie Altona/Sunshine, that doesnt fit the 11 sec rule, pay it off quick and wait for the value of the house to increase so you can eventually +ve gear the repayments and in the long term have a fully paid investment bringing in rent for your retirement ?
Also the CG on the house, could be used to either sell up and buy more IPs or just borrow using the CG the house has made.
[?]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Hi Arty,
Thought I’d reply even though I don’t really know what I am talking about. It’s just that no-one else did!Anyway, it all comes back to your figures.
How far away from the 11 sec rule are you? Is it comfortable for you to make the repayment difference, if any?Altona and Sunshine should have pretty strong capital growth as they are not too far from the CBD, with the freeway and all.
Don’t forget about depreciation either, on houses built after 1985.Just some points, hope it helps, I was bored,
Sue [
]Be careful not step on the flowers when you’re looking at the stars
Sue,
I like it…
Be careful not step on the flowers when you’re looking at the starsArty,
Smart people told me unless you don’t have enough +ve IP don’t buy -ve IP. I like that idea and not even think about -ve IP.
Cheers
[]It is always a good time to buy when you think about the long term. Imagine if you purchased at the peak of the last boom (when was it, 1990?). Waht would the property be worth now?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
hi all
personally i wouldn’t do it becuase i feel it could take a while before you see any capital growth, so for the next few years you will be loosing money. How much money do you want to loose?
If you finance this property it will have an adverse effect on your future loan serviceablity.But then again as others have said if you have a long term stategy Altona has averaged a return of 8.2% PA from 1991 to 2002. so if this trend continues a property in Altona should double in value in under 9 years.
westanArty,
I’m afraid that I would have to agree with Westan – it would not suit my short to medium term plans and the loan servicibility is very relevant.
bribie
Hi Arty
I recall you mentioned that you and Pinky were looking for your PPOR. That if total “bad” debt, you need to think about how well you can service that mortgage as well as the difference on a neg geared property.
The thing I really notice with our neg gear unit is that the full amount of the mortgage still comes out of our bank account but it never feels like much going in. Our + cf properties are in another bank account because of the trust, but I can “almost” forget about them, except for making sure the direct debit are still in place because they fully pay for themselves. It is also nice to see a little total already building up. In the current market we are still getting growth, except one is wrapped.
Keep an open mind and pick the stratgy that fits your situation.
Cheers
Leigh K[]Carve your own path and lead the way …
Arty:
I think that everyones situation is differant and YOU are the one that has to be happy with what you are doing. I have a commercial property which returns a +12.4% and another home that is neg geared. both these properties suit me at this present time. Keep in mind that not all of use will be “Steve McKnight’s”. But with proper planning & time we will make it in the end. Some poeple say I’m crazy for working any were between 60 to 90 odd hours a week.( Self Employed)But I have a plan, I will not have to work by the time I am 52. So by all means take adivce of others. If you can take just one idea from others that works then it has been time well spent.Craigc
Many thanks for all the replies !!. [
]I can see the point, ie. we would still need to top the loan up until the lease on the house covers the loan over a long term, when the house value justifies the rental increases…
[
]Im just being too eager to buy an IP, even if it doesnt fit the 11 sec rule… LOL [
]Regards,
Arty.[
]
“Why work to the age where you cant enjoy
what you have worked for !.” (Author: Me)Hi i am new in this area, but i received lots of suggestion on -ve gear ip but have to be in the high growth area, 2-12 km from metro area which growth around 8-9%. correct me on this pls if im wrong
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