As people above me have said, Negative gearing is purely reliant on solid capital gains to make any money, so you are relying on the property market increasing for you to make an income. Whereas Positive gearing you will make money as long as your property has a tenant in there.The effect negative gearing has on your serviceability can also be too…[Read more]

We have a property in Florida, unfortunately I cannot compare it to Atlanta, but I am happy with Florida and the market there.

That being said, there is oppurtunity in both markets, so it is more important you select the right property in either area.

Sounds like developing may be an attractive option, with new house values going to rise with first time buyers being even more enticed into this market.

Thats fine Richard, I thought that might be the case but I guess I was just hopeful.

Seems like it is not really worth developing anything significant as it might not be effective anyway, and probably better off just approaching lenders and seeing what they will allow, I guess at the end of the day it is them you have to satisfy anyway.

Richard,

I was wondering, do you by any chance have a “borrowing power” spreadsheet or similar you would be able to share with me? I was able to develop a relatively simple one which worked for me in my first purchase, but since then it has become a lot more complicated. So I thought I would see if you would have anything useful.

JacM makes a good point up there. I do not look at investing into a town where the population is around 2,000, and has not changed over the past couple of decades, where there is no significant industry around. In these places your property will only go up by inflation if you are lucky.

There are still regional centres that are growing…[Read more]

I remember looking into mining properties, and to me there just was not the value. Because the high price of a mining property is only limited while the mine is in operation, it can only ever be seen as a short term investment.

Look at a couple of scenarios, a house worth $750,000 in the mines, receiving $2,000 per week in rent, mine is in…[Read more]

It is not sustainable buying negatively geared property, as they cost money to maintain the loans, there is a finite amount of properties that you can purchase before you reach your limit. Then you are forced to wait for capital gains, and wait for rent to increase enough to make it positively geared and pay itself off.

I guess that is why most…[Read more]

We invested in the US market purely for cash flow, and if there were any capital gains then that would simply be a bonus for us.

If the yields do fall to the 6% net return, then that will definitely make it less appealing for a lot of investors from Australia. But if the interest rates are still only around 4%, then it is still positively geared…[Read more]

I remember recently I made up a spreadsheet on purchasing a mining property as an investment, and comparing to a more traditional investment property.

Obviously the big difference is that mining property has an extremely high rental yield, but loses significant value once the mine closees. Whereas a traditional investment has lower yields but as…[Read more]

keiko wrote:

streamlineinvesting wrote:
Seems like Australia is heading downhill, I believe we did not escape the recession, merely just delayed it by a couple years. Instead of falling down a couple years ago like the rest of the world, we survived by our high amount of resources, but that can only last so long. The next couple years in the…[Read more]

Seems like Australia is heading downhill, I believe we did not escape the recession, merely just delayed it by a couple years.

Instead of falling down a couple years ago like the rest of the world, we survived by our high amount of resources, but that can only last so long.

The next couple years in the Australian economy will be very…[Read more]

I agree with Terry, I do not thing changing the rate you pay to the property manager will make a different on the yield return of the property. Your best chance would be to look at ways to increase the rent charged on the property, either by renovating to increase its rentability. However given it is a newer property this may not be worthwhile.…[Read more]

I remember a few months ago I was looking into the same thing. A friend of mine went to go work in the mines, and I saw that the place the company put him up in rented out for $1,800 a week, similar houses in the town were selling for about $600,000. So obviously it would be positively geared.

Unfortunately as soon as the mine runs out, the value…[Read more]

They definitely charge higher fees than typical property management, as the above post said it is around 16% of the fees. I do not understand why they would charge so much, it is not like they really have to ‘look’ for a tenant, they have plenty of people in the defense forces who need housing, so they do not have to look hard to find one. And as…[Read more]

We received insurance quotes for our property in Florida, aparently only one insurance company would look at it due to its age (built in 1966), the insurance company is Citizens?

When we received the quote I was shocked to see that the premium would be $1,800. I was shocked to be honest, the property cost us $44,000 and the insurance premiums…[Read more]

It sounds like there is no doubt that you can afford another IP, but with the new IP comes the extra debt and undoubtedly extra stress. Growing your debt does seem to be a way to become financially independant some time in the future, but that being said it can also lead you down a dangerous track. So I never see it as a bad thing to pay down your…[Read more]

Obviously nobody can predict the future when it comes to how the AUD USD exchange rate will be in the future. The best way I can suggest is to factor a bad exchange rate in your investment calculations, a worst case scenario sort of thing so you can see how your investments turn out if everything goes wrong.

Also in my personal opinion, I believe…[Read more]

CasaHunter wrote:

streamlineinvesting wrote:
This was one of the biggest concerns we had with our agent in Florida when we got our first house. We had never met her, even though we had been dealing with her for over a year before we finally got to finalise on our first property. Towards the end there were ple…..ngs like this, we were able…[Read more]

This was one of the biggest concerns we had with our agent in Florida when we got our first house. We had never met her, even though we had been dealing with her for over a year before we finally got to finalise on our first property.

Towards the end there were plenty of questions between my business partner and I about can we really trust this…[Read more]