I’ll be the first (and quite possibly the last) to state the obvious… Yes. You might not find too many friends in the forum who’ll encourage negative gearing, but it would difinately pay to see you accountant, and get them to explain the benefits you will entitled to recieve as part of setting up a negatively geared property.

… In addition,…[Read more]

Hi gazmysta,

The picture you paint is a little blurry… And Ron, being new to the scene may be a little dazzled. How much are the apartments? It’s fine to say he’d only have to spend $7K, but how much would his loan have to be, and his interest repayments? How much do you expect rent revenue to be? [hmm]

Only once he (Ron), and other know this…[Read more]

Hey mate,

I’m no pro either… but 30K isn’t a small deposit. Steve’s first was 10K, and look where he is now! Most brokers will let you borrow somewhere between 90 – 95% of the value of the property… so there are a lot of paths you can choose to walk down. Don’t underestimate your achivements, and what you can achieve.

There are plenty of…[Read more]

You’re probably right foundation… I’m just trying to grab hold of these concepts. If it is an interest only loan, the calculations make sense

… however, if it was a normal loan, i would have thought the hole which the tennant and tax man are burning in the amount owing (along with the calculated return) should definately be taken into…[Read more]

Originally posted by foundation:
I assume the property is negatively geared on an interest-only loan. The rent-shortfall is costing the owner $7000 per annum. The only ‘profit’ in the scenario is the capital gain of $8000 for the year, which as explained, is a pathetic return on investment, although I would consider this a 3.3% return (8/240)…[Read more]

Bump

Thanks for all the replies so far.

I guess fear of the unknown is what turns me off going the IP route to my goal. I can see how saving a deposit and getting a loan will get me in the house I want in a few years, but the path of buying smaller Investment Properties now is blurry. Could you guys try and explain how this would achieve my goal more…[Read more]

Thanks!

As tempting as buying the house outright sounds, I’m still more tempted to save risk free while I’m comfortably living at home, and buy the house I want to live in when I have my target saved in a couple of years. I work a decent full time job, and also a second job part time, so getting cash away at the moment isn’t too much of an…[Read more]