All Topics / Help Needed! / Need advice

Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of Jobee62Jobee62
    Member
    @jobee62
    Join Date: 2003
    Post Count: 10

    Hi everyone,

    Iam from sydney (renting and haven’t yet used my FHOG) but have two investment properties in W.A. They are both negative geared properties, I get approx $540 per month so basically I fork out close to $500 each month to maintain it. The second property is a bit better its only slightly negatively geared. I also have personal debts of approx $30,000. My question is this….to get out of this whole and start on the path of buying positively geared properties would I be better off selling the first property and using what little equity I have to pay off the remaining personal debts…..and then wait another year and sell the second property. I’ve had the first property for two years and the second for 3 months.

    I’m also in desperate need of a good accountant, live in Sydney South-West if anyone knows of an excellent accountant PLEASE let me know.

    Steve I would love your feedback on this….I want to get somewhere in life but i think iam going backwards real fast.

    THanks
    Joanne

    Profile photo of RikkyRikky
    Member
    @rikky
    Join Date: 2005
    Post Count: 313

    Joeanne I would sell the property that is taking the money out of my pocket if there is a little profit or equity payout my personal dept and start to look for +cash propertys . Also try to stay away from personal dept it is a big part of being finacially free . Only borrow money for things that make you money, thats my advice .

    Cheers Rick

    Monopoly, my favourite game

    Profile photo of C2C2
    Participant
    @c2
    Join Date: 2002
    Post Count: 518

    Hi Joanne,
    It is difficult to make suggestions/ assumptions on the information provided, but here a few.

    You will need to supply figures of your equity in both places if there is any to receive better advice. You say you have 30K in personal debt but how long are these loans for? Are you able to combine them in to one and shop around for a lower interest rate. You may also need to think about down grading your lifestyle a little or changeing to a cheaper car and removing some of that personal debt. It is difficult to make suggestions/ assumptions on the information provided.

    Profile photo of shake-the-diseaseshake-the-disease
    Member
    @shake-the-disease
    Join Date: 2005
    Post Count: 97

    I would definitely not sell, unless the $6k/year NG loss is causing pain. Even then there are ways to ease the burden. WA has great CG prospects, why swap it for CF+ properties that have very limited growth potential.

    Here’s a couple of options to think about

    1) Open a new $60k LOC, secured against the property you’ve had the longest as it would have had good growth. Use that LOC to fund the NG shortfall for years to come. Remember as rent rise the shortfall will decrease over time.
    2) Open a $100k+ LOC and invest in some high yielding (9%+) shares or LPTs. The income generated is going to go a way towards funding the shortfall, plus you will hopefully get CG form the shares. Plus you are nicely diversified.

    Selling should be done as an absolutely last resort.

    Profile photo of GPSnetworkGPSnetwork
    Member
    @gpsnetwork
    Join Date: 2005
    Post Count: 313

    The usual advise is to buy and not sell unless in desperate need, weare great beleivers in the WA market and know that you can make good money in growth in time to come.

    You can also find properties that really don’t cost as much in holding as the returns are quite good.

    I’d say if able, buy positive cashflow properties against existing investments to balance out your portfolio.

    A for a good accountant we use Peter Hawketts from Hawketts Accounting Ph: 02 4677 0361

    Roy H.
    L.R.E.A., Dip FS (FP)
    Guardian Property Specialists (GPS)
    http://www.gpsnetwork.com.au

    Profile photo of Jobee62Jobee62
    Member
    @jobee62
    Join Date: 2003
    Post Count: 10

    Thank you ever so much everyone for your wonderful feedback. This now gives me a few options to consider, thank you once again.

    Jo

    Profile photo of BonbeachBonbeach
    Participant
    @bonbeach
    Join Date: 2004
    Post Count: 214

    Keep the perth properties, you may regret it if you sell them! Dont believe everything you read, both the CF camp and the Cap Gains camp have good points that will help you with your decision, as long as it fits in with your long term goals go for whatever you feel comfortable with!

    I use my Perth Accountant he is awesome, if you want his details PM me otherwise try one of the suggestions on here [grad]

    Dev * [kid]

    PS – You wont get the FHOG now as you already own properties… Keep renting tho, thats a great idea.

    Profile photo of Jobee62Jobee62
    Member
    @jobee62
    Join Date: 2003
    Post Count: 10

    Thanks Dev for your post. But I was under the impression that as long as the properties are investment properties only and not your prime residence I can still use my FHOG to purchase my own property to live in down the track if its still around then.

    Interesting?

    Jo

    Profile photo of Robbie BRobbie B
    Member
    @robbie-b
    Join Date: 2004
    Post Count: 2,493

    http://www.fhog.info

    You will not lose the FHOG if you have never had a PPOR but there are exceptions if you have had investment properties for a long period.

    TMA


    http://www.email4money.info
    Investor Links
    First Home Buyer Website


    Profile photo of gafamagafama
    Member
    @gafama
    Join Date: 2004
    Post Count: 118

    Great advice on this topic. I’m also a fan of not selling – unless the -c.flow is causing too much pain.

    Perth is apparently still growing and a great market according to many.

    I have an absolutely awesome accountant. Knows all about property, is an investor and developer himself and a structuring expert. Located near Parramatta. Send me an email and I’ll give you his details.

    Megan

    http://www.propertyhub.net

    Profile photo of redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    Great workso far Jobee..

    IMHO i wouldn’t sell the WA IP’s unless you can find a better return for the money.

    As we well know on this forum its getting harder and harder to find +CF deals and even then you need to use your grey matter..

    Have you worked out your true costs after tax or you IP’s as it may be costing you less than you think..have you thought about filing a “tax variation” form?

    At the end of the day you have to satisfy your ‘personal’ comfort factor when investing..

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

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