[Heath WorkmanParticipant@heath-workmanJoin Date: 2011Post Count: 13]

July 25, 2011 - 6:26 am

MrsC wrote:

Thanks. Its all coming down to my budget, i can basically afford either a villa/unit in the inner suburb or a house in the outer area.
Ive read and heard different views on unit vs house but seems that a renovation on a house (done well) gives more scope for upwards value than a unit.

Catalyst were your reno's units or houses?

Agreed, you may be more restricted in your renovating option due to body corporate etc

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June 29, 2011 - 11:12 am

Quote:

Thanks for the insight heath .

The reason I said that was because would it not mean I would need a saving of say 120-150k on a 300k property to be neautrally / positively geared? Therefore taking many years to achieve this, if im already paying off a PPOR?

Please let me know if this understanding I have is completely wrong

Oh yeah, I understand now, that makes good sense.
Keep in mind there are other ways to create a postively geared property like buying a house in need of some TLC for a bargin price, renovating to increase the value and then renting it out at a price that achieves a positive cashflow effect.

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June 29, 2011 - 10:47 am

Chris89 wrote:

From what I have read, negative gearing is the way to go, however from the posts I have read here everyone says positive gearing is better? Is there a better and worse? Would I still be able to buy as many properties with positive gearing? As it is obviously going to take a longer period of time to buy a property am I correct?

I haven’t read I Buy Houses so I obviously can’t comment on the strategy it teaches but I would have said exactly the opposite and I believe most of the people on this forum would agree. You will be able to buy far MORE properties if you stay positively geared.

A positively geared property means that the income generated from property (rent) is greater than the total holding costs (eg interest, coucil rates, insurance, maintenance) per year.There for you end up with more cash in your pocket than you would have had before the purchase.

Negitive gearing is when the holding costs are more than the return so you end up loosing money week to week, some people are happy with this trade off due to growth in the value of the property and of course it has the added bonus of the tax benefits.

So to wrap that up, if you negitively gear you will evenually max out and not be able to buy and more properties because the ones you already own and draining your pocket to much to service more debt, where as if you positively gear your servicability is basically limitless.

There are more experience investors than me on this forum who will come and give their two cents soon too.

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June 13, 2011 - 1:50 am

Jamie M wrote:

Heath Workman wrote:

you can pick up positively geared properties down there for under 100k.

Hi Heath What's the historical growth been like in these areas and are there any driving factors that will lead to growth in the future? Everyone loves a CF+ IP but if there's little or no growth, it's not worth it (in my opinion). Cheers Jamie

From what I've read online these properties generally doubled in value from 2000 – 2010, obviously though double 100k is still only 200k so your looking at 100k of growth compared to say 400k in other parts of the country. The only driver there is the mine really. MMG (Mining Company) reported that current exploration will provide work beyond 2020. Having said that if the miners ever packed up and left I don't know how you'd ever sell a property down there.

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June 12, 2011 - 3:56 am

As far as fixing your plaster to the floor and ceiling you can make you own frame fairly cheaply out of trudek or something similar, it doesn't have to be strong as the wall is not load bearing. You can screw your piece of trudek into a stud in the wall or roof which ever is more apporpiate creating your new stud on the exposed side of the wall and screw your plaster sheet onto that.

This is probably too structual but that's how I'd do it in my house if it was to be a fairly permanant fixture. It could be removed of course but the wall would have been damaged from screwing into so you'd have to plaster up the holes.

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June 11, 2011 - 8:52 am

Thanks Terry.

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June 11, 2011 - 8:39 am

Sorry I think I explained myself very poorly, I mean, can I use the equity in a property I purchased with lender 'A' to borrow say 105% of my next property with lender 'B'…total LVR 90% of both properties for example.

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June 8, 2011 - 10:57 am

Three property investing books I have read this year are: Real Estate, John McGrath
0 to 130 Properties in 3.5 years, Steve McKnight
and
Your Mortgage: How to Save $50 000 – $250 000 per Property, Anita Bell

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June 7, 2011 - 11:18 am

Hey JAYT. I'm in a simialr situation to you. I'm 20yo with one investment property and I'd like to own 5 properties in the future.
Out of interest, what are you doing in the mines? Do you have a trade? Are there often vacancies for unskilled workers in the mines? I am currently in the final year of a cabinet making apprenticeship however when I finish I'd like to look into take up a job in the mines as they are high paying to help me achieve my investing goals sooner. Cheers

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June 7, 2011 - 11:10 am

Hey guys, didn't realise there were some Tasmanian investors on the forum. I'm from north west tassie myself currently looking into buying my second IP. Regaurding the original question there are also a few mining towns on the west coast of Tassie. Rosebery, Zeehan and Queenstown, you can pick up positively geared properties down there for under 100k.

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June 5, 2011 - 4:32 am

Even though you are not ready to enter the market just yet you can already begin planning ahead.

The first thing I would do it have a chat to the bank(s) you think you might like to borrow from and find out you're borrowing power.
Most banks will ask for a 10% deposit on the purchas price for first home buyers, anyway the banks I have delt with will be able to print out a summary of the estimated total closing costs for the amount you wish to borrow.

Once you have done this you will be able to have a look around at potential properties you might like to buy and spend time getting to know the market.

That way you will know specifically how much more you actually need to save so you'll know when you ARE ready to enter the market.

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May 23, 2011 - 10:48 am

There is usually a hotline/helpline for each state reguarding the FHOG. I recently called to ask what information was required to verify that I had infact used the property as PPOR for the appropiate amount on time to qualify for the grant. I was told that you are not required to provide anything and that often you will never hear from the government after recieving the grant, however it is recommended that you keep things such as bills, banks statements and other mail as evidence because they do occasionally do spot checks.

The point being perhaps hopefully you will get away with it. Apparently if you do not meet the guidelines to qualify for the grant you are made to pay back the grant as well as a ten thousand dollar fine.

Maybe you can phone the helpline in your state and find out. (Without letting on what you have done )