Hello,
My investing background has been limited to the stock market and more recently businesses. I've always known that any serious strategy to become wealthy involves owning real estate. But I've always pushed it aside because I've never really understood it. But I've decided that this has to change. I've started reading McKnights "0 to 150 Properties in 3.5 Years" which is how I found this site.
At the time when McKnight would have been buying his properties you could expect to pay 40K-60K for a single family home. Which would make positive gearing a viable strategy. Is it still possible though in todays overpriced market? Or has it become fantasy like unicorns and elves?
I would be interested to hear if anyone today is still using this strategy successfully.
Cheers
JasonHi Jason,
Pos Gearing is still out there, It can be done.
It's a lot harder to find outright though…
You have to be tricky by buying and subdividing off part of the land to bring your costs down or adding enough value to bring the rents up.
OR looking outside of the suburbs… Get outa the big city.
I recently bought a house that gives a 14.5% pos geared return in the country.
Looking at another that gives 11.5% return.
Lots of renters, lots of employment in the country areas as well.
I actually don't own any city property and when people say it's the only way to get capital growth i just smile and think to myself about the 200-400% growth returns over the last 7 years i have had in the country towns. Along with + gearing rental returns.
Keep looking mate, they sure are out there.
Cheers, Luke.
G'day Jason
Couple of properties I own are returning 10% yield. Positive cash flow properties are there….but not that easy to find. You have to look into some regional towns or as Luke said, be creative. Strata title, subdivide, renovate, corporate lease, lease fully furnished, student lease, short term accommodation, etc. are some ways of improving the cash flow. All these things obviously require more time commitment.
Hope this helps and good luckIt is still possible to pick up houses in the Greater Sydney Basin which will return 6% as is, with a little work that will increase.
Thanks for the replies and it's great to know that it is still possible today. And I'm not scared of a bit of hard work and some creativity when it pays off. That's why I've enjoyed getting into business so much. They have plenty of opportunities for both
I have a client who purchased a place for $29,000 and a year later is getting $700 pw rent. Not a bad yield.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Similar to Terry i purchased a place for $32,000 Nov 2007 (Yes i now what you are going to say) and now get $388 / week on a fixed 10 year lease with lease renewals every 3 years.
Richard Taylor | Australia's leading private lender
I will take ten of those deals Richard
Wow, Terry and Richard – those are amazing yields.
Hi Shaun
You can get in the queue behind me.
PP you are right they are very good yields especially when you do the transaction in your SMSF so only pay 15% tax on the profit.
They are out there it is just a matter of looking and looking.
Richard Taylor | Australia's leading private lender
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