Hi guys and girl,
I’m kinda new to this forum so I’ll introduce myself. I’m 24 and on an income under 40k per year. I’m single and own 2 properties in Brisbane,Whilst these 2 properties are cash flow negative I’m survivng, by staying to a strict budget.I ‘m doing O.K but looking out for my 3rd, hence why I joined this forum.
Whilst I’m a big fan of this site, and always looking for CF+ property, I really wonder if they exist, and what kind of foundations these yields lay on?? In most cases its inflated by something else ie mining towns, and won’t last forever.
What happened to the traditional line of thinking of capital gains to make money.
Ponder this you buy a $300,000 property.
Senario 1. 5% capital growth 10% rent over 20 years – you would have Property – $795,989 Rent $79,599
Senario 2. 10% capital growth 5% rent – you would have Property 2,018,250 Rent $100,913. Sure you might struggle with cash flow problems, but I know what I prefer.
I just want to challenge the thought that well bought property 10km from CBD’s peform better over time. What do you guys and girls think??Sorry to babble on but I wanted to add, Capital gains would peform better over time say 10 years. It seems everyone on this forum is looking to make a quick buck, but I don’t think it exists. The only way I got property was SAVE for deposits, buy well located property then budget.Sure this wasn’t creative or fancy but over time the yields have caught up and I made some healthy capital gains along the way. Do you think CF+ properties in mining towns will be still here in 10 years??? Sure we could be fancy and sub-divide or renovate but who has that kinda money…. not me, unless your on 100k per annum in which case I dont think you would be on this forum!! Thanks guys
Capital gains are great, but it’s no use if the neg cashflow is crippling you and your lifestyle is non existent. That’s why a lot of people start off investing then stop or get out after one property.
You have 2 neg geared properties already – that is better than most of the planet. If they are enjoying some cap growth, then it may be time to look for some good cashflow, to keep you going, and worry about the cap growth later. The more pos cashflow you get now, the sooner you can retire!!
My best friend has 2 very nice, very expensive “blue chip” I.P’s. He will be working until he is 70 to get a pos cashflow from them as the yields are terrible. He is a slave to his real estate. Do you want that, and be asset rich and cash poor?
You are only 24, think with your brain not your emotions and invest with safety, not greed or impatience.
Another neg cashflow property now may cause too much financial hardship and force you into maybe a sale that you don’t want to make, or worse.
Traditionally, property bought within 10k’s of CBD appreciate well, but this is an average. There are areas everywhere that outperform the average; you just need to do research to find them.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
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