Are you saying you stash excess funds into one IP at a time, THEN you use the equity for the next one, only once paid off?

7 years is a very long time between investments.

I also put excess capital into my loans, but only to draw on it when I find the next IP, not to pay off.

Glenn

This is exactly why I only lasted 8 months as a PM. I tried really hard, but dealing with the “public” and being between owners and tenants – both complaining, was tough. Good experience gained though.

The tenants felt the rent was too high, the place needed renovation, paid late. The owners needed their…[Read more]

Paying IPs off is a snails approach to growth, but certainly less risky. You do this because you want to own your property outright?

While you use the banks money, don’t let the obligation of repayment give you sleepless nights. The bank only loaned…[Read more]

I have my own poor PM problems here and it is a case of the better the devil you know. I was…[Read more]

I just have to jump in here too. This is one of my points of view in a debate under another thread! See https://www.propertyinvesting.com/forum/topic/10276.html

In the forum +veCF is loosely used and is a relative term where the deposit can range from 0 to 100% to achieve +veCF. However, this compares apples with lemons for analysis…[Read more]

I’m back online after a trip investigating other folks IPs in the Eastern Cape of South Africa (B&B, Self catering, property market etc) with my family. Isn’t this property investment business great – a holiday turns into a clandestine business trip which is also tax deductible and my wife only briefly rolled her eyes.

I…[Read more]

In note your indignation at my 11% interest rate.

I’m in Namibia, Southern Africa, where the environment is a “leetle” different to yours, hence the strange foreign customs on interest rates.

However, I am of the opinion that there is a basic relationship to the overall investing scheme of things. Our rates are like this:
Interest:…[Read more]

Firstly, you would be mad to get a loan over 20 years. This creates too much of a burden. Second, why would you make P&I payments?
A longer term improves the cashflow situation. As the tenants are paying it off, I’m smiling. Unfortunately I am…[Read more]

Seriously though, you can get a piece of desert beachfront view, 3 bedroom, 2 bathroom, garage for about $160,000 with about a 20% return from rental. Your risk is the exchange rate which has been a roller coaster the last few years, but right now with the world in turmoil, we seem…[Read more]

Much has been written about the value of positive cashflow (+CF), or positive gearing on an investment property. Cashflow, however, is subject to the time value of money, so looking at initial CF is a short-sighted view. The deposit payment made by a purchaser on an investment property is often ignored in the…[Read more]

I think we agree that the objective is to limit deposits.

What I am getting at, is that +ve, -ve and COCR are “short-term” quick methods that provide some indication, but do not really provide a reliable longer term view of any IP.

Also, +ve or -ve as thrown around on this forum seems to be a relative term. If an IP is +ve with…[Read more]

Originally posted by SteveMcKnight:
Hi,

Just remember that depreciation is tax deferral, not tax saving.

In my opinion, technically tax deferred is tax saved because of the time value of money.[wink2]

Glenn

Can I consider a property investment cf+ at what deposit level?
0%, 10%, 20%, 30%…… at 100% everything is cf+. So where is the cut-off point?

Is there a definition out there?

If I can find an IP with 0% down AND it is +ve CF from day 1, then (in terms of what I am reading all over the forum) I am a wise…[Read more]

I agree with Kay. Life, business and investing is risky. Successful investing is about managing your risk.

If you’re looking for the basic rules to wealth creation (and avoiding the excuses) read “The Richest Man In Babylon”.

Glenn

Sounds like a good little “passive” business you’re doing there, and you even have the space to develop more.

I’m amazed that web advertising alone has got you this far. We’ve been doing smalls advertising mainly, most locals don’t really rely on the web (yet).

Our advantage is we have relatively cheap labour for cleaning, so it is…[Read more]

Russ, anything close to the sea cf+ I have not discovered yet – so it is good to hear about it. Will just have to try harder.

My one question remains though.

Can I consider a property investment cf+ at what deposit level?
0%, 10%, 20%, 30%…… at 100% everything is…[Read more]

Points taken, which is why we’re considering relocation options. Still a tough choice. You’re right about living in a dream world. When one is on the inside the downhill slide is gradual and we adapt to the changing circumstances – more electric fences, higher walls etc.

However, in the land of the blind, the one-eyed is king. We’re in…[Read more]

+ve Cashflow IPs generally don’t show much capital growth.
-ve Cashflow IPs have brighter prospects of capital growth

I’m still in the dark as to WHEN one can define a deal (ito % money down) as +ve or -ve….? If I put down 100% it is bound to be +ve, but not much leverage there.

Anyone…[Read more]

If anyone is interested, mail me and I’ll send it to you once I have knocked off the rough edges – no guarantees that I don’t have any major flaws in the spreadsheet, and it will not have a structure…[Read more]

So far so good here. We are linked to the RSA Rand on a 1=1 basis with our Namibian Dollar, and have freedom to transfer as we wish to RSA. We are in a common customs union with RSA, Botswana, Lesotho and Swaziland, so rules about foreign transfers are similar.

However, we live in fear of our country going the way of Zimbabwe because…[Read more]

This is where I get long-winded, so duck out now if you’re already bored.

IRR is an indicative value which shows you what annual interest rate you would have…[Read more]

Your best asset is your youth and your willingness and awareness.

I’m sitting here kicking myself because I am stupid enough to only asked the questions around middle age (yuck!) – after trying a few get rich quick schemes and getting burnt (though…[Read more]

How about we all find an exotic island, not too small, not too big. Set up a government run along business lines – set out the real estate and sell it off/ develop hotels etc., declare tax rates of 5% with 5% import duty and 20% VAT (hit the tourists, not the locals) – make it a tax haven to attract more capital. Import the labour…[Read more]

Thanks for the kind comments. Actually, the place is pitched mainly at the local market – Namibia, South Africa, Botswana holidaymakers – who we see as a “more reliable” source for our little place, especially if another 911 hits world travel plans.

You’re quite right, o/seas folks want the Big 5.

We’re a little worried that the agent…[Read more]

Thanks for the comments and whew, glad the problem is not at my end.

We do intend updating the photos, just so busy renovating we generally don’t even sit on our own deck that much, let alone remember the camera. Trying to co-ordinate clouds and yachts is a bit tricky too…..

Open invitation to see the “oldest desert” in…[Read more]

The site link worked for me, perhaps my ISP only allows member access to this site? Please try again, but I’ll check with the webmaster.

Glenn

I have set up a slightly embarassing web-site – http://members.mweb.com.na/glenetti (may I mention that here? – too…[Read more]

Total Addict. Sat up to midnight last night with the forum. Not doing much investment with the wife at the moment.[evil5]

Most typical leases are paid at a weekly rate with a requirement, unless otherwise agreed that the tenant will be two weeks in advance.

Tenants are also required to pay a bond equivalent to 4 weeks rent upon taking…[Read more]

No argument. You just made me feel really stupid, now that my own house is almost paid for. Unfortunately I only discovered last year that my own house is no investment.

Having trouble convincing the wife NOT to add that extra room to our house, cause it is no investment – until I realised I can add the room, then get a re-valuation and…[Read more]

but you don’t want a farm in Zimbabwe – you could pay with your life.

Seriously though, just ask the questions……

Your biggest risks are political upheaval and unpredictable and violent exchange fluctuations. However, high risk = high reward, as always.

I agree with you guys, money ain’t everything, as I discovered when I spent 8 months as a Real Estate Agent doing property management [there – my confession is out – wrong place for it – I’m…[Read more]

Interesting that in Australia you work with weekly rental. We work monthly for both loan repayments and rental, so the two are easy to compare.

Does this mean that rental in Oz is actually paid weekly? Do loans run weekly or monthly?

Also, I read that in Aussie interest only mortgage payments are possible? True?

My local brokers…[Read more]

We don’t quite trust the Agent’s marketing effort, so for now we are doing our own marketing. The Agent is still useful to find the odd tenant, hand over the keys, check inventory and clean before/after.

We have a 2-tier commission arrangement with the agent – less if we introduce the tenant and higher for the agent providing a…[Read more]

See topic on Partnership breakup from Geo under Legal and Accounting. Seems George wants to get out of a similar situation.

Glenn

IMHO and experience with a business partnership over 10 years and 5 partner changes, the best way to end partnerships is to agree to end them on the same terms as they started.

So, cashing out is a good, fair and equitable option. OR one sells to the other, but at arms length. Either get a valuation of the IPs or put them on the market and…[Read more]

Ever got any Nigerian excess government funds faxes? We collect them for fun.

I have a colleague who was taken not once, but three times by a “brokerage firm” from the Pacific rim – “invest in a new listing. Going to go thru the roof.”

Then, call from a firm in the USA – “we represent an investor keen to take on your loss in exchange…[Read more]

I’m in a commercial property investment with Partners now for about 8 years. The partners have come and gone over the years, with relatively little trauma luckily, HOWEVER, over time priorities change for different folks. For example – one partner may want the rental income, another may want to take cash out.

At present, I’m trying…[Read more]

I was actually at the Namibia-Aussie World Cup match in RSA last year. The first-time Namibians were pretty good in the field but collapsed against the bowling attack. But MAN was the Aussie team professional! They did not hold back at all when fielding, even though they knew it was a cruise match. Our chaps told me…[Read more]

I have battled to find +ve around here [Namibia Africa]. My strategy (so far) has been to look at IRR over 10-20…[Read more]