I am in the process of educating myself about property investing. I am looking to purchase my 1st property in the near future. I am seeking the advice of any experienced investors who would care to offer it:
1/ Is this a bad time to buy – should i wait for a fall in the market – Is a fall ‘due’?
2/ In the process of trying to educate myself I have come across many ‘guru’s’ selling their educational programs claiming they hold the ‘secrets’ to successful wealth building. Has anyone had any experience with these (+ve or -ve) ?
3/ In the present climate I cannot see how rental income plus negative gearing will be sufficient to pay off the interest on borrowings. This may be my ignorence but does anyone have a different opinion?
ThankYou
Hi Mika,
I’m just starting out myself, so don’t really have any answers to your questions other than to suggest you read Steve McKnight’s book “0 – 130 Properties in 3.5 Years”. The content of this book is not gimmicky. He certainly doesn’t profess to be a guru, quite the opposite, but gives sound, reasonable, rational advice and information about several approaches for generating income through investing. The book is also written in an easy to understand, reader friendly way!
My only other advice is to stay tuned to this website and you’ll learn heaps!
Good luck!
Broni purchased my first ip two yrs ago and although neg geared $50/wk has increased $150k in that time. now looking to sell as i have capital gains loss to offset and then purchase at least four to five ips positvely geared in immediate future.
if you look hard and do plenty of research there are always good ip’s out there. Interest rate rises could help bring more good buys out of the woodwork…..we’ll see.
Don’t dream it be it….and don’t look back
Originally posted by tony atkinson:i purchased my first ip two yrs ago and although neg geared $50/wk has increased $150k in that time. now looking to sell as i have capital gains loss to offset and then purchase at least four to five ips positvely geared in immediate future.
if you look hard and do plenty of research there are always good ip’s out there. Interest rate rises could help bring more good buys out of the woodwork…..we’ll see.
Tony is stating that the IP he bought two years ago and has since increased in value to the tune of
$ 150,000.Now let me see, many people are unable to save anything, let alone a decent amount.
A decent amount ? How much is that ?
Well let us say $ 100 per week.
$ 100 per week that is about $ 5,000 per year.By making a simple decision of buying an IP two years ago he has managed, over this two year period, to increase his equity by an amount that would have taken one some 30 years of hard work in order to save the same amount.
Talk about letting one’s money work for oneself.
Yeh, Yeh, I know, I haven’t taken into account any interest your $ 5,000 p.a. can earn. All of some 3% to 5% .
Pisces
Mika, here is how I see it.
>>1/ Is this a bad time to buy – should i wait for a fall in the market – Is a fall ‘due’?<<
There are some rumours that in some areas the market appears to keep ticking over, as strong as ever.
I don’t know about you or anyone else, but I am looking to buy something right now.
>>2/ In the process of trying to educate myself I have come across many ‘guru’s’ selling their educational programs claiming they hold the ‘secrets’ to successful wealth building. Has anyone had any experience with these (+ve or -ve) ?<<
There are many different areas , many different angles, many different methods. They all can make one money. No-one holds an exclusive claim over opportunities.
To start off with, there are many cheaply priced real estate books available so no need to immediately run to attend a guru’s expensive seminar because you think he may get sold out or perhaps even discontinue selling his secret method..
>>3/ In the present climate I cannot see how rental income plus negative gearing will be sufficient to pay off the interest on borrowings.<<
Well, if you watched Today Tonight last night you would have seen Rachel Star who bought a 23 room house ina town of about 35,000 people (I think for about
$ 340,000). After making P&I loan payments she will have a surplus of some $ 12,000 p.a.I think we can call this a +ve cashflow investment.
Yes, this was a good deal. Is this the only such deal around ? I don’t think so.
Was Rachel lucky ? Again, I don’t think so. She put a lot of work in and got results.
Can Mika, or Jack or Paul or Peter or Mary find a +ve geared property ?
What do you think Mika ?
Pisces
G`day Mika,In response to your first q., there are always peaks and troughs in the R.E. cycle, but you have to be “in it, to win it”.You can wait for the “right” time for a decade,but the deal of the century comes along once a month if you are looking.Read the real estate pages, learn the numbers{ie;income-outgoings=+ve or -ve},put in low offers for 10 properties, you might get 1 that wants a quick sale{a motivated seller}.You`ve got yourself an IP where the no`s stack up.Investing is all about the no`s.If you are high income and can afford to put $ per month towards your future then neg. gearing in higher priced IP`s will work{tax benefits,capital gains}, if not then look at regional areas where +ve cashflow IP`s are available.
In relation to your 2nd q., Robert Kyosaki`s “rich dad, poor dad” was an awakening for me in regards to the bigger picture of getting out of the rat race and taking control of my future.Jan Somers book was good for the math`s of why R.E. is a good bet for wealth building.
I don`t know where you are Mika, but if you are in a metro area,and don`t have savings to put towards a -ve geared property, you may have to look regional to get something that is +ve {or neutral or roundabout`s}
It`s all in the no`s.
Regards, TerryMika- welcome!
It all depends on how much money you have or want to spend. Have a mortgage broker visit you and work out how much you can borrow- then make some decisions.
Neg gearing got a lot of us real capital gains- but don´t expect the same CG as the last few years- the market is much slower. Rental yields are generally less than they were a few years ago for new investors NOW because prices have risen so much. But can you live with a 7-8% return? I know I can but others can´t – go figure, we´re all different.
As for gurus.. well, there is no rush to invest in them- they´ll be around longer than you and I are. Read everything you can on the net and much of the infor of the strategies of the gurus can be found for free anyway if one looks hard enough.
Any time is a good time to buy RE- as long as you buy well- best of luck!
kay henry
Mika,
A lot of debate about negative gearing but ultimately, it is just a tool, to assist you in buying and holding a property.
Get the right property and if negative gearing can be used to assist, that’s a bonus.
James
I agree with points mentioned, but I think take the step, any step has to be in the right direction.
Start out, buy something, and dont stretch your finances so you go belly up..my properties have risen immensley which will help fund more. Im on single income here, so yes it can be done.
Goodluck, try second hadn book stores, library for books, so you arent wasting hard earnt money..
elves
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