Actually Kaylah…..It sounds like he is not even a professor !!!!!!!
It seems too many people believe everything they read…….
Most articles and books are that persons own personal view, and how and what they have done was suitable to their own circumstances….You have to take bits and pieces from each one and make your own truth with the facts you can gleam from these people and real life statistics over a long term, not just the last 10 years or so. Which is why you need trustworthy experts around you, not just some one with an opinion because that opinion worked for them……..
As far as I can tell so far……all negatively geared properties (should) eventually become positive over time if you pay a small amount off the principal as well as the interest, if they dont then you are either not doing your research properly before you buy or we have had a major housing bust………dont quote me on that as I am still a beginner doing my own research and I am also waiting for my appointment with my broker on Monday to throw around ideas.
I do appreciate all of your feedback, but please dont dictate to me that one way is right for all as this is definately not the case.
don’t over analyse, no point taking 12 months to make up your mind then prices go up!
analysis paralysis can be an investor’s biggest downfallWattoette, sorry to hear about the insurance deal, I am sure there is a more reputable providers out there. It might even be worth starting a thread on this topic for others.
Yes I am aware that property doesn't always double every ten years, it is a rule of thumb (so the professionals say). As i have learnt from the past don't rely on others people advice (or your own in some cases). I have found that experience is an expensive teacher bu that doesn't mean you quit learning.
I understand your point on paying tax on the interest earned on term deposits but you pay tax (CGT) on your property once you liquidate as well plus you pay land tax each year, rates, insurance, electricity, water, maintenance, property agent and other holding costs and there is no guarantee a more "modern" expensive home isn't going to have a major expensive failure either.
I also don't like the analogy of house prices doubling every 7-10 years. Sure on a macro economic scale it may appear that way with the median price per suburb increasing but over 10 years what used to be a daggy or outer area suburb turns into desirable "inner" locations and over ten years people add value to their own homes with renovations plus land invariably rises due to government manipulation of supply based on an archaic british model inherited from our first fleet descendants. There is no rule of thumb that a particular house (remembering you are only buying 1 or 2) is going to double in value even though the suburb median may do so. It's the difference between macro economics and micro economics which people don't seem to realise.
I don't want to sound like the devil's advocate and I think you should just go for it anyway if your incomes are as exceptional as you say your risk is minimal due to the obvious fat that could be cut from your budget. Best case scenario you get extremely rich, learn a lot of good lessons and have a great time doing it and retire in 5 years. Worst case you have to work for 10-15 more years and are rich anyway.
oh and every rented house is cash flow positive once it's paid off, hahaha, but you sunk $xxx,xxx of capital into it while that was happening which carries a huge opportunity cost.
Hi Wattoette,
sounds like you are in a good position to purchase a new property for investment purposes…. yes I must say that avoiding maintenance costs and getting benefits from depreciation, tax etc…. is worth looking at…. but then the newer places can sometimes cost quite a bit more initially too! all the best with your investments!Regards
Peter S ([email protected])
High Rent Return Properties – http://www.ozpropertyinvest.com/hy/2022.htmlWattoette wrote:It seems too many people believe everything they read…….Most articles and books are that persons own personal view, and how and what they have done was suitable to their own circumstances….You have to take bits and pieces from each one and make your own truth with the facts you can gleam from these people and real life statistics over a long term, not just the last 10 years or so. Which is why you need trustworthy experts around you, not just some one with an opinion because that opinion worked for them……..
As far as I can tell so far……all negatively geared properties (should) eventually become positive over time if you pay a small amount off the principal as well as the interest, if they dont then you are either not doing your research properly before you buy or we have had a major housing bust………dont quote me on that as I am still a beginner doing my own research and I am also waiting for my appointment with my broker on Monday to throw around ideas.
I do appreciate all of your feedback, but please dont dictate to me that one way is right for all as this is definately not the case.
yes, Wattoette, if you can pay a little off the principal regularly then over time you should be in a position where your rent (as it normally keeps rising) will be more than your interest payments + expenses…. Do realise however that it can take quite a few years before a negatively geared property becomes positively geared….. (what a wonderful day it is when that happens…) you are in a position then to think about perhaps getting another property!
Regards
Peter S ([email protected])
High Rent Return Properties – http://www.ozpropertyinvest.com/hy/2022.htmlHello Wattoette
Cash flow positive property is only going to make your tax more.
If possible always buy new.
EG if you buy new at say 400,000 and you and your partner earn over 140,000 your new taxable income would be approx. 106,000
Qualified investment finance people can give you an exact figure.
I can help with all your answers.
Regards
Kevin
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