Hi everyone,
Personally Im feeling less certain about the direction of all markets for 2008. So my strategy is basically to cash up.
– No share purchases
– No property purchases
– Make improvements to existing properties to improve rental yield
– Put the cash down to offset interestI must admit it is very difficult to NOT do anything!
Happy new year!
Hi Mathew,
My plans are:
– Get a new accountant, (i've got a couple in mind) before I do anything discuss my goals with them
– No share purchases, offload the piddly amount of shares I currently own at a loss
– No property purchases, do a minor reno on currently owned property, increase the rent on it, sell it for a good profit
– Build 2 houses behind another property we already own
– Get hubby to take 3 months off work, either leave without pay, or take his long service leave and travel around AusMy Plans for 2008:
1. Get the bank to value my properties.
2. Get Finance in place
3. Purchase investment property in Brisbane area 1st half 08
4. If equity and borrowing limits permit, buy again 2nd half 08
5. Sit back and enjoy the ride
6. 2009 draw down equity from properties, use funds to significantly increase exposure to sharemarket.
7. Repeat step 6 each year.We settled on a block of land in Aug which will be for our next PPoR, so we will be doing some debt reduction and getting cashed up for the most part.
We have a decent amount of equity in the potfolio, but the current Bank is not letting us do much due to servicability (the new block has put a spanner in the works I guess) so we are going to also re-finance the portfolio so I can use some of the funds to buy a business for when we return to Aus in April.
All going well, we will use the funds from the business for living, and use the wife's income for more investing and debt reduction; maybe get the new PPoR built towards the ned of the year, then look for the next IP project.
dreaming wrote:My Plans for 2008:
1. Get the bank to value my properties.
2. Get Finance in place
3. Purchase investment property in Brisbane area 1st half 08
4. If equity and borrowing limits permit, buy again 2nd half 08
5. Sit back and enjoy the ride
6. 2009 draw down equity from properties, use funds to significantly increase exposure to sharemarket.
7. Repeat step 6 each year.How long since you've had the properties valued Dreaming?
It would be intereting to hear how the cap gain has been for you since the last val.
The strategy was to go hard on CF neutral/slightly CF+ to build the asset base. I've got a fair amount of equity available, and I wanted to max it out then let capital appreciation do it's thing, with a revaluation each year and topping up the portfolio with the increased equity.
As it happens, my plan didn't consider that lenders would only take 70-80% of rental income into their servicability calcs, so I'm now approaching a limit on servicability, despite having enough surplus income to pay down loans by about $5K every month. Strange.
Just as I was pondering that one, the economy started to jitter, interest rate rises have begun to accelerate, so now I'm kind of glad of 2 things:
1. That I didn't get as far into my LVR as I could have
2. That I discovered this forum and have learnt so much so quickly from it.So now, my investment criteria has swung towards a very CF+ focus – enough to buffer significant economic turbulence. I suspect that with such tight criteria, my next investment will be from a 'very motivated vendor', and since the cash flow will stack up, it will still be a good thing regardless of market sentiment (in fact, because of market sentiment).
I see it as similar to Warren Buffett's investing approach: work out what an investment is worth based on it's cash flows. If the price is below that valuation, buy it. If not, don't.
It may be some time before my next buy trigger, but so be it.
I've got some sharemarket and property trust investment in index funds through my super, but there's no point taking that out as I can't get at it for a looong time. So it can stay where it is and ride out the storm. I'll try to ignore the net worth impact, which doesn't really mean that much anyway
So for me 2008 will be the year that forced me to invest the way I should have been investing all along.
Should be an interesting time nonetheless…
Daedalus
L.A Aussie wrote:dreaming wrote:My Plans for 2008:
1. Get the bank to value my properties.
2. Get Finance in place
3. Purchase investment property in Brisbane area 1st half 08
4. If equity and borrowing limits permit, buy again 2nd half 08
5. Sit back and enjoy the ride
6. 2009 draw down equity from properties, use funds to significantly increase exposure to sharemarket.
7. Repeat step 6 each year.How long since you've had the properties valued Dreaming?
It would be intereting to hear how the cap gain has been for you since the last val.
Hi Marc,
Property one 18months since last valuation, second property brought last May, so it will be interesting to see what the banks valuation comes through at.
If I have enough equity I,ll look for a property otherwise I'll take out what I can and use the funds to increase my share portfolio.
I think it's going to be a good year to buy shares with all the volitilaty, when everyone is selling it's time to pick up some good shares at a discount.
I'm also renovating my PPOR, once complete I'll get that revalued.
I'll update this post once I get the valuations done, I'll be interested to see them myself.Thanks
Uncertain here.
Everything I have read in the past month has had a negative slant on property investing. Opinions seem to be first option is cash in the bank, second option blue chip shares and third is property.
I have just purchased a couple of bargain properties in Perth and are looking for others and are very optomistic about the next few years. Interest rates have just about peaked and will come down quickly in the next 12 months as the fear of recession becomes greater than the fear of inflation. Rents are increasing at a great rate, due to the huge shortage of rental properties. A lot of newer immigrants to Perth are keeping their funds overseas until exchange rates improve. This will happen when Aussie interest rates fall. Then these people will be looking for properties to buy. The stock markets will fall even further and people will be looking for other investments. Term deposits won't be that attractive for these people as interest rates will have fallen, so property will again be attractive due to the better yields. When you combine all the above factors (it's like the property cycle on steroids!) I am very excited about what lies ahead.
I'm going to build some houses on land that I own. Should get some greater rental returns here in Brisbane. Even though the capital gains won't be as high as last year, I'm going to keep buying if I can get hold of finance.
I think that there are going to be some great opportunities here as heaps of people keep coming to SE Qld and there is a chronic shortage of all types of property for both renting and PPOR.
nedkelly wrote:I have just purchased a couple of bargain properties in PerthWhy do you consider them a bargain? Are they below replacement cost or close to land value?
Are the properties further than 20k from city?
Thanks, Linda
Hi Everyone
Just playing devil's advocate for a bit.
In the areas that i specialize, the house prices have gone up by about 30% in the last year.
With that and interest rates lifting to some where near 10% in the next 12 months, how is everyone going to find +ve CF properties.what are your strategies for producing these properties?
Reno's, Vendor finance, Development, Commercial property
Just some food for thought
Nick
Not easy to get cash flow positive properties at the moment. Some of my friends are looking at building duplexes which will be either neutral or close to cash flow positive.
Hi all
I'm 100% in Cash at the moment with plans to trade shares as I finsh my Diploma in Share Trading.
Last year It was a development deal
I think the thing here is to maintain fleibility, ave a number of strategies under ones belt and hit the market in the areas you are confident in at a time that suits, be it shares, options, property or cash.
Either way educate yourselves enough to take advatnage of the situations.
Warm Regards
SueMIT | Owen Real Estate
Email MeOur plans for the year:
Currently selling a prime location house in hornsby for a large, quick profit. Then buying a larger family home to move into (out of our 2 bed unit). The unit is going up for rent (there is a long waiting list of people after 2 bed units in hornsby). Later in the year, depending on finances will either sell the unit (most units around here are selling for the asking prices within a few days of being on the market) and buy another IP closer to the city (maybe Erskineville) or use a line of credit to buy new property.
Good times ahead for property investing if you can pick your spots wisely.
Richard
millions wrote:Hi Mathew,My plans are:
– Get a new accountant, (i've got a couple in mind) before I do anything discuss my goals with them – unless they hold a financial services licence or a real estate licence they can only advise on tax issues – get the full picture not just tax
– No share purchases, offload the piddly amount of shares I currently own at a loss – great short term panic attitude, with quality companies paying dividends of over 8% this is a great strategy.
– No property purchases, do a minor reno on currently owned property, increase the rent on it, sell it for a good profit property markethas slowed due to the rest of the panic merchants or over committed out there – good luck
– Build 2 houses behind another property we already own this might go ok as the building costs may have gone down – depends on how many builders go bust.
– Get hubby to take 3 months off work, either leave without pay, or take his long service leave and travel around Aus probably best done when investments doing better – I would be earning the cash to buy cheaper good quality investments – how are you going to monitor the contruction of the properties?mathewc73 wrote:Hi everyone,
Personally Im feeling less certain about the direction of all markets for 2008. So my strategy is basically to cash up.
– No share purchases try counter cyclical investing – ask warren buffet – why buy good companies when they are expensive compared to their dividends!
– No property purchases property market slowing down, more choice – go figure!
– Make improvements to existing properties to improve rental yield is it actually improved yield once you add the costs of the improvements to the property cost?
– Put the cash down to offset interest great if it isn't tax deductible debt otherwise take advantage of good investments "on special"!I must admit it is very difficult to NOT do anything!
Happy new year!
L.A Aussie wrote:We settled on a block of land in Aug which will be for our next PPoR, so we will be doing some debt reduction and getting cashed up for the most part.We have a decent amount of equity in the potfolio, but the current Bank is not letting us do much due to servicability (the new block has put a spanner in the works I guess) so we are going to also re-finance the portfolio so I can use some of the funds to buy a business for when we return to Aus in April.
All going well, we will use the funds from the business for living, and use the wife's income for more investing and debt reduction; maybe get the new PPoR built towards the ned of the year, then look for the next IP project.
If your going into business look at the structuring – make sure those assets are safe – also can benefit from income distribution strategies – however depends on the business might take sometime to make a profit.
richardgr wrote:Uncertain here.
Everything I have read in the past month has had a negative slant on property investing. Opinions seem to be first option is cash in the bank, second option blue chip shares and third is property.
Capital available try, blue chip shares get more shares for your dollar with highest dividend yields we have seen in a long time, property – take advantage of the over committed! then bank.
Take the bank interest, remove the tax and then remove inflation of nearly 4% there ain't much left!Millionaire in training wrote:Hi all
I'm 100% in Cash at the moment with plans to trade shares as I finsh my Diploma in Share Trading. Where is this from? Hopefully not one of those trading software companies that wants to flog you expensive software. – Reality is the sharemarket isn't rational! Try investing rather than trading – watch the in/out costs – you can easily trade away your profits in transaction costs! Hope you've got guts of steel – otherwise get the gaviscon ready. And don't marry yourself to your computer.
Last year It was a development deal
I think the thing here is to maintain fleibility, ave a number of strategies under ones belt and hit the market in the areas you are confident in at a time that suits, be it shares, options, property or cash.
Either way educate yourselves enough to take advatnage of the situations.
Warm Regards
Sue
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