Hi Foundation
Must return here sometime as I thought we’ve lost you for good. Your take on Mr M’s comments is provocative because you scratch beyond the surface to find the truth… sometimes it’s a hard pill to swallow.
Thanks for the follow up here on the thread. I do agree Mr M need to better qualify his comments as people like me may interpret it the wrong way and further entrenched themselves in the position they’re in.
I loathe inaction but sometimes it is all it calls for – more due diligence in asset selection, careful timing, prudent valuation etc. No wonder I look like a fool in this forum. [tired]
CT
Hi all, follow up.
Like Koulizos, I thought that prices couldn’t go up anymore & sold all 4 of my houses in 2003-2004 here in Adelaide. Good profit but dash it all, they could still go up! They went up another 30%!
I’ve since re-bought about 1.5M worth of property & am on tenterhooks.
I wanted to tell the young wannabe property investors that in many cases, the profit in property is independent of growth.
My niece has a townhouse which her mother sold her underpriced & it has increased in value by $250000. My niece earns $100000 a year, probably more. Her tax bracket is 40+%
A new house yielding 4.5% would put her out of pocket by about 2.5 thousand a year. If she paid $1000 into her home loan or an offset account, it’d take less than 2 years for the investment property to turn cashflow +
The idea is to maintain 100+% loan on the IP and let the home loan put cash into our pockets.
She is part of the Echo Baby Boom. I wonder how many of them are out there?
As long as there’s someone paying 4.5% rental yield, property investors NEVER have to sell.
James, your problem is that your IPs are beyond the capacity of your home loan. That’s why you might have to sell one of them. But it’s an issue that only you yourself can decide.
Good luck,
Kum YinHi Kum Yin
I appreciate your take, coming from an old hand, on the situation at hand.
From my lack of experience, you seem to be unemotional about the current housing woe facing some of us. One necessary skill I have yet to master. I guess taking ownership to make the first step, and learning from doing, make anyone with the desire a stronger investor.
Good on you, Kum Yin! Wishing you continuing success.
CT
Thanks for your comments Kum Yin,
I realize that I am very highly geared & very reliant on future capital growth.
If all variables remain constant I can still afford to hold these 3 IP’s but will not be in a position to save or reduce the loan balances.The question is should I continue to spend $15k per year to hold on to $1 mill of IP (with $1 mill of debt)?
I would be interested in the opinions of any other investors if they were in my position.
James
Hi James62
Don’t know if this article helps; do check it out.
http://www.prosolution.com.au/newsletter.php
Stuart Wymess is a well respected Vic based fin broker, I believe the answer can only come from the analysis of your own porfolio.
Good luck.
CT
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