Originally posted by Dave L:
Hi Brilliant star
Just an idea on your first question.
As its going to be your PPOR ( assuming a non tax deductable loan) you could use your tax savings and pay a large deposit on the property or all of it if you have enough, then come tax time borrow the money back to pay the tax bill therefore making it a tax…[Read more]

Firstly, that Steve’s scenario doesn’t make any sense otherwise, and he’s usually pretty thorough. Secondly because it’s clearly defined as a “PROFIT STRATEGY: Growth” rather than “PROFIT STRATEGY: Cashflow” or income… If I were assessing the value of a P&I investment, I’d certainly consider all income net of costs to be the return.
Anybody else…[Read more]

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) rather than 1.7% (8/450).

Cheers, F.[cowboy2]

Also, good news for those of us who didn’t want to be paying an extra 10c/l for petrol because of a declining Aussie dollar.
Bad news for those of us holding US dollar traded assets, or shares in companies which produce US dollar traded commodities.
And of course, bad news for the government.

Originally posted by foundation:
Don’t be smug. Good luck with the near-certain 2 or 3 interest rate rises before Christmas. It may give you a taste of things to come.
F.[cowboy2]
Bang! 5.75%
One down, two (?) to go…

Originally posted by brucemarg:
Most of them will need to rent our properties a lot longer than they intend. The ‘now generation’ is great for us who have considered tommorrow and don’t want to be working then.
Just who are you lumping into this “generation”? And are the responsible, debt-conscious, youngsters (see splosh’s post above) really…[Read more]

Originally posted by robo:
What should you do if you have equity but no deposit?
Perhaps I’m a bit old-fashioned for a young(ish) person, but I’d say “Save! Save! Save!” and I don’t mean it in the way Harvey Norman would.

Originally posted by bruham:
As for being over-stretched financially, that is ALL those investors who stupidly ?? use their…[Read more]

Originally posted by Dazzling:
[navy]If you believe our strategy is no good, I’d like to hear your alternate strategy.
Of course, debt can be usefully employed to leverage higher returns. It’s just a worry that many people both here and elsewhere classify all tax-deductible debt as ‘good’ regardless of whether it is producing income or not. Often…[Read more]

Originally posted by giddo:
There are a LOT of ostriches out there who somehow are managing to gloss over or forget just how little they are accummulating!
I agree, but many of them believe their futures will be secure if they can only manage to accumulate enough good debt to sustain a wealthy retirement. Sadly, this economics fallacy is also held…[Read more]

Originally posted by NATS12:
…I imagne the pain also spreads to local and interstate investors who have a big headache to deal with and are left with properties that can’t be rented or sold.
Hmmm…. does this present an opportunity to snatch a few bargains?

Originally posted by giddo:
Am I Nuts – or am I making Money anyway?
Well, perhaps…

At +5% per year, your ‘wealth’ as measured in Australian dollars would be increasing. But it is absolutely possible that your investment is losing value… while its price is rising[blink]

That house can now be traded for more $AU, but paper money does not…[Read more]

For a reno-sell, go the boring neutrals. Creams, in other words. Sure, a small percentage of prospective buyers will appreciate a bold colour scheme, but most people have very bland taste, and very little imagination. At most, a single ‘feature wall’ in the living area is the most they can handle.
Cheers, F.

I switched off after the bit about water responding to various messages / thoughts. What they didn’t tell us was that the water had been left outside in sub-zero temperatures and the photographs were, in fact of ice crystals. Naturally, different sources of water have different chemical properties, thus the different crystals… nothing to do with…[Read more]

Originally posted by Wylie:
I think Foundation has some good ideas, but I think his delivery could be a whole lot less sarcastic. Do you really think andymitchell will be going to restaurants three times a week?
Any percieved sarcasm was not intended to be such. I blame my clumsiness with the English language (although it is my native tongue).…[Read more]

Apologies for the length of this post.

Firstly, a disclaimer. I am not a financial advisor, nor do I profess to be. Any advice herein should be considered general in nature, as no or little consideration has been given to the specific financial position of the original poster.

Hi Andy, straight up, let me sincerely wish you all the best with…[Read more]

Well, resi real estate:
$50k your money, $200k of ‘their’s’ @ 5% rental yield will cost you $18k per year for a return of $12,500 minus management, repairs, insurance, rates etc. Remember that average yields are below 4% in most capital cities, so 5% is generous or a “good deal”… Also, higher leverage will equate to higher levels of negative…[Read more]

Originally posted by leewizza:
It’s about time someone said it. Well done!
I too believe it is impossible to find these CF +ve properties.
Not one so called mentor or even guru investor seems to be able to tell us newbies how to do it without maing no sense.
I can tell you exactly how to do it. Build yourself a time machine (see Here), strap…[Read more]

The most basic question would be – what return am I getting for the money I’m investing.

Originally posted by danpackis:
Thanks very much. I spoke to a loan broaker today. According to him the max I can borrow is $125K on top of what I have. I’m bit puzzled here.
I did mentioned that new property may bring around $200 per week.
… perhaps he was assuming you were looking at buying another loss-making asset? The first house appears to…[Read more]

Originally posted by yack:
So dont compare owning BHP shares to owning property. Why not look at Telstra eh
Ok, sure… ~8% dividend yield… vs residential real estate…
~4% Canberra
<4% Adelaide, Perth, Brisbane, Melbourne
<3% Sydney
[blink]
I guess it’s all about how you look at it!
Cheers, F.[cowboy2]