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My assumption of neutral gearing is that after you have crunched all the numbers including depreciation etc Mr Taxman chooses not to take a cent off you but in reallity you have actually put a couple of dollars in your pocket. Please correct me if I am wrong!
I totally agree with you Sam, I am changing a lifetime's mindset in relation to debt in the space of a few short years. The only advantage to our parents wisdom is that because of that I have never held a credit card and onoly ever had one car loan!
I am comfortable with increasing our good debt but my wife clings to the spectre of a US housing style crash and worries about ending up with nothing. I am confident it wont happen here but any decision we make has to be a joint one. I am a big fan of the saying 'Its not so much timing the market as time in the market' and I want to secure a few more properties and hold onto them for a good long time – but patience is a hard thing to learn!
THe lease on my Robina unit expired in Jan. Was only vacant 2 days – thats a positive! Rent hasn't moved in the 2 years I had it. I was expecting an increase this Jan. Not sure if property manager being lazy or markest still a little flat. More homework required I guess!
Very enlightening comments. I agree that negative gearing should eventually turn neutral or positive. The more threads I read, the more I am leaning toward neutral cash flow properties but wherre do I find them (sorry Derek not keen on Karratha)?
I have no experience in this field but I guess it is all about occupancy rates. From what I have seen when looking for accomodation, ther is the potential to double or treble a rental income but then you need the right agent/advertizing to get maximum occupancy. There would also be the regular cleaning and maintenence costs and I suspect significantly higher insurance costs.
THanks folks for the words of wisdom. I am very much the have an idea and want to action it type of person but I am learning patience and caution in this game! Debts a funny thing isnt it? I remember being terrified of borrowing 100K many years ago and now the total figure doesn't seem to matter – its all about cash flow – oh and staying married………
Sorry dont have any words of wisdom for you – but congrats on the purchase
I have bought two properties through TIC. Both transactions went very smoothly and both properties have enjoyed a very low vacancy rate. The QLD property has not performed to expectations and rent has been stagnant sincepurchase date, however the property manager seems to do a very good job and it is a no fuss investment. The west Perth property has been awesome. Have had it less than 18 months and rent went from 650/wk to 795/wk but WA property managers take a gouge plus some!
The 'support member' is paid a commission on the sale but they do seem to make a lot more effort than your average estate agent. As a lazy investor, I like the in depth property profile and generally low fuss transactions I have had with the club. I do have to wonder though about the overall goal of building up a large enough portfolio to live off the equity and as much as I love reducing my tax, I wouldn't mind a positive cash flow property now instead of in 5 years time!
I will probably buy a third property through TIC but I will always retain my own ideas, opinions and a 'safety cushion' rather than fully endorsing their 'plan'
Very interesting. I have bought a couple of properties but always been wary of the LOE concept. It appears that my gut feeling is supported by people with superior knowledge and experience!
My wifes gut feeling is that we are not ready to by the next one – I wonder how can I change her mind……
