Forum Replies Created
Good stuff there Josh.
I still rue the day that a no good bone idle loan broker talked me out of proceeding with the purchase of a six unit commercial in Emerald, very high yield in 03!
For a nanosecond I thought I had died and went to investor heaven there.
I go for 105% made up of 80% on the property and 25% from LOC. My objective is to maximize my deductible debt and my cash offsets against and minimise my non-deductible debt. Like the other poster my overall LVR is less than 105% more like 80% but that will reduce when I settle on a property that I am currently selling and have a contract on.
I bought a house in Hampton initially to live in with an option of staying there long term. Its a great area, schools, village, beach, train. 20 mins drive to St Kilda. We decided to return to Brisbane and I have rented it out and getting 900pw pretty chuffed with that. It didn't strike me as the kind of area that you would buy into for a standard high yield type investment though. Cant see Hampton doing much in the CG stakes either in the short term.
I have known many to do well in the Latrobe Valley with rentals though.
I use Terri Sheer and found them to be a little bit testy on the claim side. At the end of the day I reckon I was out of pocket about $12k with malicious damage and a rent skip, they coughed up $10k after a bit of persistent hassling by me.
After trying many different ways I have settled for inner city and near the water negative geared properties. I am quite happy working and my income level allows me to hold the properties without any bother. Just went unconditional on the sale of one of them as I am looking at a major reno on our PPR and wanted to reduce my debt level. I have one slightly negative geared property on a big block in the middle of a regional town with a development opportunity that I probably wont proceed with until I can see the cycle moving n that area. It would be CF+ if I developed it now.
I have both a Unit Trust and Discretionary Trust. I used the UT to buy a house from me and set it up as a massive negative geared investment, it worked well and it allowed me to massively increase the debt on the property. A DT would have been no good for me as you cannot distribute a loss. I use my DT for the odd bit of consultancy and bonuses where it works fine in distributing the funds to no income earners. Over the years I am not 100% convinced that you need trusts in mosts circumstances with all things being equal.
I might try and buy it as well.
This free website is pretty good for previous sales.
I don't know that much about the housing stock but over the years I have been involved with major road infrastructure that serves the area. The recent Goodna to Dinmore extension was a major roadway investment and I noticed just last week how well the traffic flows in that area. Should be a positive for the area if the commuting time to Brisbane and Ipswich has reduced.
mattsta wrote:so i guess they used them for capital gains or flips? negative geared investing tend to be really good for those who already have high incomes. Did they have high paying income jobs already?They still have them and have seen large growth in their values and rents. I couldn't honestly answer if they were high income when they started. I don't think they were low income but they were convinced that inner city was the way to go and weren't yield focused. So just saying that high rental yield investing is fine, but it doesn't mean that other styles are wrong either.
Belinda, the best advice that I can give you is that you really do need to start believing in yourself first.
Personally speaking the wealthiest investors that I have met are those that bought a couple in major cities in Oz and UK at leet one cycle ago. They were probably negative geared but the investors didn't look on them thatt way.
Not sure about 99% of people doing the buy and hold thing.
Nothing wrong with either way and certainly buying low and manufacturing equity is something many a negative gearing investor will entertain.
I must admit that I have been pleasantly surprised how much my negative geared joints have became less negative geared in the last year alone. This has came about with a combination of dropping interest rates and rising rents. When the majority of your income is taxed at 45% and you are happy getting your cash flow from work then it really does dull the impact of a mild income loss as the short term price to pay for holding the asset.
One of the reasons that my properties are negative geared is that they were initially purchased as a family home when I relocated for work reasons. It just happened that the yield was fairly low on them but I think in the long term this strategy has worked for me in terms of getting to live in a nice house in the inner city, short drive to the office and then converting it into an investment for the benefit of other families that prefer to rent.
There is a school of thought that advocates buying inner city properties at the expense of yield that are probably negative geared at least in the early holding years. They also argue that you need to buy too many cash flow properties to create serious wealth. They also say that inner city investing is safer as the owners in these areas tend to have multiple sources of income and wealth as opposed to cheaper areas where the majority have typically all their income coming from a single wage.
Some also say that the growth rate for property may now reduce down to about 5% and in some cheaper places will only mark inflation. So lets say you bought inner city, brand new and were high income then after depreciation you would still be negative cash flow, but might be in a better long term investment. This investment could be set up so that once you retire it turns positive and pays an income.
Personally speaking, I am not fussed either way but there are some reasons why investors knowingly get into negative geared housing investments.
Belinda, in addition to the other questions that have been asked how long have you held them, what are the yields?
Are they more negative geared than you anticipated or has your circumstances changed?
Freckle, I dot really care that much about what you think of my posts and I am very sorry for you if your expectation of my posts is some sort of yooni thesis quoting references or a submission to the college debating society. Internet posts are worth as much as you paid for them. As far as MSM comment goes I would have thought that that was more similar to your doom peddling style.
Long term fundamentals are:
The wealth of Australian will grow following a lull, once gain.
Residential property will continue to be a store of this wealth.
Residential property will appreciate at a higher rate than inflation and those balls deep in leveraged investment in this asset class will make a motza due to their compounding growth in equity.
As for your points above:
GDP is a blunt instruments but nevertheless on a like for like basis it is the strongest in developed countries,
Once the current spate of mineral and hydrocarbon projects is complete and there are some more about to go FID, guess what, they start selling the product, it is not the end, ever since I have been in Oz, we have been bringing on new developments, those that think a drop off in new projects is an end are misguided.
Interest Rates, the RBA has a buffer and may have to drop, not to stimulate but to reduce the gap between the North Atlantic and hence the Aussie, my property cash flow and income for that matter has improved significantly, I am sure the rest are the same. The good bit is that they do have a mandate to stimulate as well if needed, so the inflation based economy is locked in.
Affordability means, more takers, less defaulters and it is back at 03 levels, ready for the next leg up, just remember it is only the minority that bought recently the majority have shit loads of equity at current values.
We have a very healthy population growth which is set to continue, its not a case of big or small Australia its a case of big or huge Australia, these new people prefer cities where there is less to no new land available
The numbers are bloody brilliant and my net worth is looking better by the day and that is all that matters to me.
Nope you don't understand me correctly. What I am saying is that we are both using similar data as I am sure many are doing and he doesn't own it, he hasn't created it and I don't follow this guy and I don't have an opinion if he is a cookie or not.
I don't think there is any coincidence at all. We are simply drawing from the same economic facts, except I got a few more in than him and he was specific on his. A fact is a fact, no spin, no projections just facts that is the commonality.
