It has been stated that with investing one is either going forwards or going backwards and that to continue forwards requires constant activity. Also, that selling is an important part of property investing, suggesting that time will be needed to find better opportunities to replace those sold. If this is a constant and ongoing necessary activity at what stage does property investment provide passive income?
If you think that I should stop asking stupid questions just tell me where to get off [tongue]
roessler,
I know you are new and all, and you are all hyped up and ready to go after your Masterclass, but I get the feeling you and others have just jumped on and pumped out 3 posts for the sake of racking them up…probably because you’ve been instructed to. [thumbsdownanim
I don’t want to sound harsh, but do you have any exciting prop. experience / knowledge to share with other forum members…or are you just going to parrot what you just heard at the class ?? [whistle]
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi all
roessler- a property should be bringing in passive income throughout the whole time you have it as an investment. If you buy well it should be putting cash in your pocket. But some times its important to cash in especially if the asset is underpreforming and you can’t fix this problem. Its also important to sell if you need to free up capital so you can invest in better performing investments. As an example i started investing in Cash positve props in 1997 by 2003 i couldn’t find deals that interested me so i looked at NZ. The deals were all over the place, so i sold about 20 of my Oz properties (which had gone up in value but not the rents) to finance purchases in NZ. Today i’m now buying in the United States and i’ve sold about 15 of my NZ properties (which have gone up in value but not the rents) to finance to purchases. There come a time (especially after strong Capital growth) when its better to sell, pay CGT, and go for a higher return.
as far asgoing forwards or going backwards and that to continue forwards requires constant activity.well i’m not sure about that , personally i’ve had times in my investing, especially years ago when i started when it was important to sit back and just watch and see how my strategies were working. Take time to reflect on the performance.
Take your time, If your investing in Australia i hardly see any need to be rushing out and buying properties.regards westan
USA information evenings in Melb, Syd and Brisbane in early April, email me for more info. We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
i dont necessarily believe that any question is necessarily stupid as such. however you ask some very broad non-specific questions which i think can be answered very competantly from a book. There are some fantastic ones out there. Ive just finished reading one by Jan Somers and found it very easy to read. You can make a passive income from property, its a matter of finding out how.
Thank you Dazzling for your input, it’s always enlightening to hear contrary views.
Your assumptions about my emotions are not correct, however, I am new and willing to learn, so I accept your comments.Being new I don’t have experience to share yet, but as soon as I have anything worthwhile to share I will do so. Shall I write to you first? [biggrin]
Wha ??
Sorry pal – I don’t do “assumptions about emotions”…
I’m here to learn about techniques / finances / stories / experiences.
I’m not interested in pontificating about fluffy feelings, hi-brow macroeconomic theory or any other theoretical variables that you have no input or control over.
Too busy making money to continue….
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hey Dazzling, who made you the keeper of the forum? Everyone needs to start somewhere. No one asked you to waste your precious time responding or indeed reading the contribution.So what if someone puts something on that doesn’t suit you, no need to carry on like a child. Go on making your money, perhaps sometime you will learn a little generosity along the way.
PT
Today is a new day. You will get out of it just what you put into it.
i think my first posts were:
‘where can i buy cash flow property?’ and
‘can someone tell my what suburbs to look it?’i was lucky enough not to get jumped on…
best of luck roessler, there’s alot of encouragment and support on here!
e x
roessler,
Westan hit the nail on the head about why to sell. I remember the days of the “never sell” ideology. But I sold a property at the near end of the boom, and that allowed me to buy much higher yielders in better locations, based on the CG. Now that the market has dulled, I would never have got the price I did then, now.
As for passive income… well, I see passive income can be more easily got doing some of the things the “gurus” in all walks of life have done- you work for a bit and then achieve the profit- writing books, getting patents.. that kind of thing.
But with RE… well, one can’t just buy one or two properties and then live passively on the incomes. Even CF+ properties need to be paid off! So even if people get an extra $50 a week on a passive income, that is hardlt an income to live off. You’d need 20 of those properties to be on a fairly sub-standard income.
As you can see with westan, really the income he is utilising is derived from CG and then reinvesting- a formula he has been using over and over in different (or emerging) RE markets.
As for just living off a passive income… well, I reckon it’s not entirely reliable by just buying cheap CF+ properties- unless you can buy dozens of them, and that might take many years after this RE boom. The old rules don’t necessarily apply, so people have to be more flexible, look at emerging markets, developing, or some other method that will increase income. Interest rate rises can make previous CF+ properties into neutral or negative ones, and a flatter market might lose people some capital gain. Certainly, notions of flipping etc, are pretty passe, to my mind.
Sometimes, investing is about the boring old “pay it down” practice- not sexy, but it’s necessary if one is doing vanilla buy and hold deals. Then you can buy using more equity that you’ve built.
Certainly, if people are thinking about passive get-rich-quick schemes at this stage of 2005, another industry might be a better bet.
kay henry
New smilie added – [chill]
Brent
Your Friendly PropertyInvesting.com Adminthanks for the new grin Brent,
i hope that was sutbly aimed at dazzling?[chill]
Well these forums (forae?) make for interesting reading don’t they?
Roessler, seems the point you are leading up to with your “parroted†wording is the notion that this “passive†income isn’t as passive as the word implies. In one of Steve’s books (can’t remember which) he basically reminds us that while a portfolio of cashflow properties will produce passive income, should the investor fail to be proactive in their portfolio, one property or another will “stuff up†and start failing to perform. You’ve basically got to keep an eye on your portfolio because it’s paying for your lifestyle.
If that’s disheartening news to you, don’t worry it was to me too. Being one of the most leisure-loving people I know, I would like an investment which allows me to live like a king all day and worry about nothing. But I think the nature of having stuff means you need to look after it. Bummer, eh? Still, I reckon it beats going to work 8-9 hours a day, five to six days a week. I imagine Steve doesn’t get up and press a business shirt at the start of each day, or give himself indigestion swallowing all his cornflakes at once to get to the bus on time.
I think the passivity of it all may depend on where you want to stop. Say you’ve paid down the debt on your own home, so there’s only rates and stuff to pay on it. Similarly, say all your toys have been paid for by profit-making investments. You may decide that you can pare down your portfolio because your expenses are modest. Just an idea.
You could always go completely the other way. Buddhist monks reckon the more you have, the more you have to worry about. They get around this by deciding not to own anything. But there’s no Porsche Boxster in that equation so I’ve never been a fan.
Bob
[cigar]
Sorry for the delay in getting back – just had to recover from a beating [evo], but it’s important to jump straight back on the horse.
Thanks very much PT, emc, kay and Bob for your kind support and words of encouragement as well as for your ideas and advice. I really appreciate that and look forward to more participation on here. I am in the process now of evaluating a few potential IP’s and am going through due diligence. I will post my progress on these soon hopefully.
Thanks again
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