[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 27, 2007 - 3:13 pm

I have a number of +ve cashflow properties in regional areas and since I live in Melbourne, all of them are in Victoria.

They've all done very well and look after themselves (actually by ppty mgrs) with little or no effort from me. There's even been a little capital growth but not as much as in the cities. But I don't mind as income is what I am after. 

Best thing is that they were +ve from day one without any work needed to be done. I'm a big fan of buying solutions as I value my time a lot. If I can get 10% – 15% nett COCR without doing anything (other than making the purchase!), then I am contented.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 27, 2007 - 3:07 pm

Though $45K +ve cashflow properties have all but disappeared, there are tons of choices if you are willing to spend $100 – $150K. And you don't even need to be creative about it ..

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 27, 2007 - 3:04 pm

The ATO actually has a very good template that comes with the Tax Pack.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 27, 2007 - 3:03 pm

I have read a lot of property books and you will find the experts can't even agree among themselves if a trust is worthwhile or not ! For example, Margaret Lomas finds it unnecessary while Steve McKnight encourages it.

So do your own research and make up your own mind as everyone's situation is different. You may very well find a trust a luxury you don't really need.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 27, 2007 - 2:52 pm

Yes, Deer Park is historically "lower class". But being sandwiched in between the new "upper class" suburbs like Caroline Springs and Cairnlea, there has been significant improvement in the area – e.g. new buildings and new shops popping in the Deer Park shopping area, redevelopment of parks, etc.

So don't write off Deer Park too soon.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 26, 2007 - 3:22 pm

When I started out investing, my 1st 2 IP loans was CC'd with my PPOR. Thankfully, it hasn't caused me any problems and they are still CC'd. But as I haven't needed to sell any of them and they all now have a decent amount of equity, I haven't bothered to refinance them and split them up.

Now all my new loans are created as standalone loans, with my deposit taken out (i.e. redrawn) from my other loans.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 26, 2007 - 3:12 pm

Good to know Qld. I once went to Westpac to query on their loan to purchase a block of 4 units for me to subdivide and sell individually. However, they said because it was 4 (i.e. more than 3 units), I needed to come up with 30% deposit. Guess from your post, it indicates there are alternatives available.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 26, 2007 - 3:08 pm

They're generally not very popular because of limited capital growth potential. However, like Tyson said, they can be very good earners and will provide a good income base for you to expand your portfolio. Its a similar case with service apartments and the like.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 25, 2007 - 3:03 pm

Well, firstly, I would never buy a property unless I am earning income from it from day 1 (i.e. positive gearing strategy). That's the key principle that I strictly adhere to and its worked well for me.

However, it looks like you are following a negative gearing strategy with the hope of making money through capital gains. If that is indeed your strategy, 3 years is way too short a time to expect significant increase in capital value (unless you are EXTREMELY lucky).

So the answer to your question depends on what your investment strategy is.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 25, 2007 - 2:56 pm

As an investment, I prefer brick homes. But as a home, I prefer the look and feel of timber homes.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 24, 2007 - 11:26 am

The problem with these sort of deals is that after the lease back period, the actual market rent is way lower than $535 pw.

I have a number of friends who love display home deals, but its pretty much betting that they can sell it after the leaseback is up and make some capital gains. Or at least not to lose any money. This way, the rental income is their profit and any capital gain is a bonus.

Proceed at your own risk !

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 24, 2007 - 11:22 am

Not all countries have the same interest rates. There are many countries with much lower interest rates than Australia.

If you can get access to funds from outside Australia at a lower interest rate, it can make a significant impact on your returns.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 24, 2007 - 11:19 am

mathew aiken wrote:

hi adam i was wondering if the 11 second solution can still work in this day and age? i have been looking for properties and have found a few that i liked but when i did the 11 second solution it seems that it doesnt work out to be positively geared. for example a house selling for 169000 making a potential 260 dollars a week rent doesnt work out for positive gearing it says you should not be paying more than 130000.so does it still potentialy work? thanks mat.

I think you will find that the 11 sec formula is pretty much useless these days. Read Steve's subsequent books on his change in strategy.

However, if you lower your expectations to about 10% COCR, you will find that there are still many out-of-the-box solutions out there. Frankly this is my strategy right now. Sure I can get better returns if I try to be more creative and put in a bit more effort and running around.

But I value my time a lot, so I don't mind compromising and getting decent returns (as opposed to mind blowing returns) if it means that I can save time and spend it with my family.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:29 pm

I noticed in the past year or two, it has been getting easier to find +ve geared properties with little or no work needed to make them so. This is especially true in the regional areas.

Most probably because of the drought people are panicking and selling their properties. So the prices has levelled off or even dropped, while rent has remained constant or even increased due to lower investment. Thus, making ROI excellent.

A quick search of regional VIC (because this is where i live) real estate in towns like Morwell, Horsham, Ararat, Moe, Stawell, etc throws up tons of potential +ve geared properties.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:17 pm

I see many houses like that in the new estates .. but whatever you do don't build an underground garage .. VERY BAD feng shui ..

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:15 pm

I have a PPOR in VIC built by Henly about 4-5 yrs ago .. never had a problem and everything is still fine …

but here's some advice though, it is the foreman that Henly assigns to your project which is the key ..

he's the guy who manages all the subcontractors and the person who you talk to about anything to do with construction …

the 1st foreman i got was terrible and to cut a long story short, i insisted on a change and thankfully, i got a great replacement foreman and everything was a breeze from then on …

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:10 pm

All good suggestions above but if all else fails, don't be afraid to SELL …

Part of good investing is to know when to let go, as well as when to buy …

Tough luck mate !

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:07 pm

NEVER !!!! … but that's just my opinion ..

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:05 pm

I get about 6% – 7% (in VIC).

I would shop around if you get quoted more than that though.

[bennidoParticipant@bennidoJoin Date: 2004Post Count: 195]

June 19, 2007 - 12:04 pm

Hi Tim,

Congrats on your first post. If you read Steve's follow up books, you'll see that even Steve admits finding +ve geared solutions are harder and harder. That is, without doing some sort of "creating".

But if you look hard enough, you will find many +ve geared properties right from purchase. Admittedly, most of these are in rural areas (like what Steve said in the book) but if you do your due diligence, you will see that some areas are better than others.

So take heart, there are +ve geared solutions around ..