G,day,everyone
I have just bought a house and land package as an investment on the Gold Coast,which will be negative geared to the tune of approx,$75.00 per week,then I walked into a book shop and saw a book called "0 to 130 properties in 3.5 years".
After reading the book I thought,what have I done,I,ve just screwed myself and maxed myself out to the hilt.
I would like to get involved in wealth creation projects,but because I bought this property does it mean I,m in a situation that i can,t do anything until the housing market picks up. Any ideas
ThanksConsider why you have 'invested' – was it for a quick buck? No, PI is a long-term strategy. If necessary, consider doing some inexpensive work to the house (ie no more than $5-10k, less if possible) to improve the appearance and increase your return.
You won't learn what not to do until you've done it.
Pay as much as you possibly can off the loan or into an offset account and you will get the investment to the point of cash flow neutral position eventually.
Hi, Duckster is right. $75 p.w. is not difficult to pay down. Increase payments to $400 per month and it gets progressively easier.
KY
KY,Duckster and Scott, I thank you for taking the time to answer my question.
Dont forget to put in context, the time the book was written. Whilst the information is an excellent resource, the market is different now to what it was then. Dont beat yourself up on your purchase. Look at it now and manage it to make it do the best it can.
Most of the properties mentioned in the book are in the 'rural' or small town.
And most of the teories are a bit outdated.Congrats JW on taking action that is something that the majority of the population never does and puts you ahead of the pack. Whilst Steve's books reflect a cash flow positive approach to investing, you really need to go to whoop whoop to achive good positive cash flow, which is obtained at the sacrifice of capital growth. Most high cash flow posiitve properties are located in or near mining towns and whilst these were excellent investments during the boom times, they reuire extra ue diligence at the moment with the down turn. Property is generally a get rich slow scheme and there is always a trade off between cash flow and capital growth. A balanced portfolio in my opinion should include a combination of both growth and income.
its not all doom and gloom.i started out negatively geared but at least i did something !!! i havent lost any money which i would have if i were in super and remember the real money is in capital growth.hang in there and a few years from now you will wonder what all the fuss was about.i only wish i had a place on the gold coast not a bad place to retire
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