All Topics / Help Needed! / A couple of questions

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  • Profile photo of 221D221D
    Participant
    @221d
    Join Date: 2004
    Post Count: 3

    Hi All,

    New to the board. Have been negative gearing (due to income) for the last 5 years, but am seeking to diversify somewhat and get into some positive gearing.

    A couple of questions for the those in the know…

    1. What is the 11 second rule
    2. What is PPOR

    Good luck to all.

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    1. Steve’s filter for determining if a property is likely to be cashflow positive. Halve rent, add three zeros – should be your buy price. Take three zeros off purchase price, double – should be the rental achieved. Then do further due diligence on other expenses etc.

    2. Principal Place of Residence – your home that you own (with or without the bank [:)])

    Cheers
    Mel

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    Hi,

    Re: 11 Sec Solution… see https://www.propertyinvesting.com/11secondsolution.html

    Bye,

    Steve McKnight

    **********
    Remember that success comes from doing things differently.
    **********

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Wow. I must say our three liners take much less time [:)]

    Cheers
    Mel

    Profile photo of Ali-GAli-G
    Participant
    @ali-g
    Join Date: 2004
    Post Count: 2

    The 11 second rule is,

    When you’re purchasing a property, you work out the rent it will produce then divide it by 2, and then times the result by 1000, the answer should be roughly the purchases price of the property.

    E.g.:
    Purchases price = $70,000
    Rent income = $150 / 2 = $75.00

    So if the property price is on or less than the purchased it is worth looking into…

    It is used as a filter to see if a property will be a positive cash flow, bear in mind that this is only used as a filter and doesn’t mean you should go out and buy a property because it passes the 11 second rule.
    [}:)]

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