Also Dino, as Oz pointed out in an earlier post, there could be up to $3000 depreciation benefits each year which are tax deductable, increasing cash flows by $1400 each year.
Also in the first 3 years too you pay around $15,000 in loan interest which is another $7,500 increase in cf’s for the first 3 years, which would put your initial outlay…[Read more]

Hi Dino,

You give some good points, i spose i will just have to do my sums and see. The main difference in putting in a term deposit is that there is no chance for capital gains, with a $170,000 house, you would expect it to have doubled in value over a ten year period to $340,000. Also rents will increase but the initial outlay will remain the…[Read more]

Sorry Steve, I have just seen Terryw who is a gold member 4 stars, must be 500+, i spose that’s as high as it goes?

Fudge111[]

Thanks Sue, I’m so glad you are always willing to answer questions, it really doesn’t matter how much knowledge you have, every little bit still helps.

Anyway I pretty much understand all that about depreciation, i just don’t think it is a big thing to do with the differences between my plan 1 and plan 2 which was in an earlier post in this…[Read more]

Hello again everyone!

In many of the replies to this post people have mentioned how i left depreciation out of my calculations, oz had this in his post Cash Flow = (-$989+$14280+Depreciation?)-($9520+$800+$400+$1285+$170)= $1116 PA or $21 PW

What would the depreciation be, and i don’t understand how it is a cash flow, you can only…[Read more]

Hi Ozpatin,
My loan repayments are not based on interest only loans, it is a P&I loan of 25 years, the yearly repayment on such a loan is $11,535, i used the calculator on http://www.loan.echoice.com.au/pages/h_propinvest_basics.html to get this solution.

Also wouldn’t depreciation be the same no matter what plan i used? Also…[Read more]

Hi Jim, I take on your points, however i understand alot better when i am shown a practical example.

In my plan 2 when I do not include any of the loan repayment as a tax deduction, i include it in initial outlay 40,860+151,174=$191,854

There will be around 16,000 of this that is tax deductable.

Then there is the 11,625 profit per year, i am…[Read more]

Yeh, thanks Jim and Sue, I wrote a post to Steve too and he backed up what your saying. Broz has the book at the moment and she is in Bendigo Vic, i am in Gisborne, 100km away, so i will have a look when i see her next.

Regards
Fudge111

That is what i thought too Jim until when i was reading steves book in the charts where he puts weekly loan repayment etc, to find the positive cash flow. He basically gives the impression that the positve cash flow is the only part that is tax assessable, however, if only the interest is deductable then part of the the loan repayment used to…[Read more]

mmm, thanks diclem,
I must say I didn’t get that opinion from Steve’s book, but you could well be right, i’ll ask him that i think.

While I’m at it I did a few sums on 2 different ways to go about investing in the same house, as i am only young, if I make errors anywhere then please point them out

Property 170k
Weekly Rent $280

Deposit (20%)…[Read more]

Sorry Guys,
The last point I want to reiterate was one i made in my 2nd post in this thread, is the one of *time*.
Sure, i may not get the returns doing it this way compared to buying many more properties, however I really don’t look forward too much to spending every second of my free time (which we are trying to achieve more by investing) trying…[Read more]

Thanks Jim.
Yeah, I think I would have to be put in the bracket of people who are a little more cautious and take a few less risks.
And you are correct that we can change our tack whenever we like. I mean, I’m sure I’ll find a few great +ve cf properties which if already earning passive income from day one i will just leave them to…[Read more]

Also Jim, I think my post was misleading, i meant to say that we would acquire all the properties perhaps within 5 years, definately not pay them all off, sorry about my inaccurate post,

Fudge111[]

Thanks for your advice Jim,

Well we will have 2 incomes to source our investments, i say will due to the fact that both broz and 1 are still at uni and are yet to have full time jobs, I will become an accountant and she is planning to be a midwife.
Another fact is that when you pay off your loan quicker all the loan repayments will be tax…[Read more]

Thanks Peter,
I definetely wasn’t going to buy 4 properties all at once, but we would hope to be able to pay off the properties in around 5 years or less, obviously, we’d prob have a year or so gap between each investment, as you pay off each house you have more passive income to pay off the others and it will slowly free up your personal income…[Read more]

Thanks again Melbear!

It’s amazing how much I’ve learnt in the short time i have been a member of propertyinvesting.com, this forum is such a great source of information!

Fudge111 []

Hi Melbear,

Point taken, I spose the main reasons i hope to invest is to keep the properties as rental properties for as long as possible, i know it could be harder to refnance with say less equity, but however with all the extra passive income it shouldn’t be needed.

I also see many of the posts about *Time* and I think it sure takes alot of…[Read more]

Hi Milen007

A great post on this topic is “selecting a PM” It is in the archives, you should find it very helpful.

Fudge111

Hi Everyone,

You have mentioned in the post about taking out an interest only loan, while i understand the workings for this, how many years will you have to keep paying the annual interest, is it forever?
I am relatively new to all this stuff, my more i learn now the less of an idiot i’ll look like later, lol[]

Thanks, Fudge111

One time a real estate agent from Bendigo told me that what they do is they take the value the vendor wants to sell the property for, and then goes 1/3 upwards and 2/3 downwards to get the price range, or was it the other way around?[]

Anybody know?

Fudge111[8D]