g’day,
I’m new at this so bear with me, just spelling out my situation as an introduction…
I’m 29 years old, earning reasonable dough, owe $130,000 on my principal place of residence which is held in my name and is now worth more than $320,000 (bought for $250,000 in June last year)… it’s a 60 acre country property an hour from where I work in Richmond…
My fiance and I also bought a place at Blairgowrie on the Mornington Peninsula in Feb 2000, it’s in her name, with an interest only loan for $155,000 (purchase price $172,000)… had it valued at $370,000 the other day, we’re going to convert loan to principal and interest, while renting it out for about $220 per week (we did rent it out for holidays, but didn’t get as much as we wanted) … so that means it’ll be negatively geared, but we’re expecting the value of the place to keep on rising…
We have about $50,000 cash to play with, and are keen on getting into some positively geared properties, but after hours on the net, they seem hard to come by as most of you well know… best one I could find costs $95,000 and rents out for $140… are these opportunities in Victoria limited these days or is it just a matter of biding one’s time and looking as far afield as possible… I looked at Queenstown in Tassie, saw a couple for $50,000 that rent out for $125 per week… but I’m worried that in places like that, it doesn’t take much for tenants to be in short supply (ie copper mine closing) etc.
Have also thought about negatively gearing something in Ballarat, but has to be 3 bedrooms, in reasonable nick, and around $150,000 mark… at least there’s some potential for growth with train services improving, continual improvement to infrastructure etc….
Any suggestions on what course to take are welcome, like I said I’m new here and very keen to learn, so any advice is appreciated…
Cheers
R[
]Hey Richmond….
Firstly, well done on the capital gain purchases you have made..very nice – know of anymore?
You say you have $50 000 in cash, don’t forget about the equity in the other two properties you have which looks around $405 000 ([320000-130000] + [371000-155000]) 000 which you can redraw and playwith….
In regard to positive cashflow properties….You may or may not have read this but its worth a look:
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=1103Hope this helps
Pete
…Beware of the dreamtakers…
Hi Richmond,
A couple of things you said in your post were a bit worrying. If I were you, I’d look at how I could invest in a way which is most likely to guarantee my investment returns.
Brent
Yikes!
You’ve got ME worried now Brent! Which bits of my post were worrying? Like I said, I’m new at this…
Cheers
RYou might want to check prices in Ballarat and relative rental returns. You might want to ask fellow Vic investors about what they think of your numbers and your area ??
Throw up a question.Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert Einsteinok ok, I’ve done more hunting around, and it’s now clear that there ARE good positive cash flow properties for sale all over the country, and not neccesarily in little country towns… I read that bit about the 11 second rule, and was a touch sceptical, then, a few hours of hunting on the internet found quite a few… (ie cost 58,000 rent 130)
So there you go… I’ll be hitting the phone tomorrow!
(AD, with all the reading I’m doing, I’m turning away from the Ballarat option… there’s better paths I think)
Cheers
R (go tiges)
Yikes!You’ve got ME worried now Brent! Which bits of my post were worrying? Like I said, I’m new at this…
Cheers
RSorry for the huge worry. Perhaps I should have elaborated.
I’m with AD on this one. Check the figures, do some research, and evaluate Ballarat’s ongoing growth prospects if you’re thinking of negative gearing there.
You also seem to have two (possibly conflicting) strategies – negative and positive gearing.
Look at your goals (ie – what you want to achieve out of investing in real estate), and then find the best investment to achieve those goals.
Brent
By the way Richmond how did you guys go on the weekend ??? he he he. Go the Lions.
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinWiseguy eh?
We’re Victoria’s top footy club at the minute… a position we haven’t enjoyed for a while…
(See, in every negative, there’s a positive)
Cheers
RTo be honest R it is good to see the tigers up there. They have had a few average seasons when they should have had a lot better ones. Still they won’t beat the Lions….
Enjoy
AD [:0)]
(Andrew)“”Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world.”
Albert EinsteinI am interested to know why you are converting your loan from Interest only to P&I?
Cheers[]Hi Pete
I have never invested in property before so bear with me if this a stupid question. The question is…when you redraw your equity don’t you have to increase your monthly payments to the lender?? So is a property has positive cash flow and you redraw the too much equity the property may turn negative, wouldn’t it??
Am I completely wrong in my assumptions??
Thanx
Phu
Hey Richmond….Firstly, well done on the capital gain purchases you have made..very nice – know of anymore?
You say you have $50 000 in cash, don’t forget about the equity in the other two properties you have which looks around $405 000 ([320000-130000] + [371000-155000]) 000 which you can redraw and playwith….
In regard to positive cashflow properties….You may or may not have read this but its worth a look:
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=1103Hope this helps
Pete
…Beware of the dreamtakers…
Hi Phu
You are correct on all assumptions.
It is great to be able to get access to the spare equity in your investments as their capital value rises, but you must consider the increased loan repayments as you described.
However, if you are putting equity into another investment / deal that generates even more interest than the cost of your funds (i.e. your existing loan interest rate), or in other words using leverage on leverage, you may achieve an even better result.
caveat: do the numbers first !!!
cheers
the B [
]__________________
“Life is a Dance”Howdy,
I’m only going to use the $50000 cash that I have at the moment as deposits for the 4 – 5 positively geared properties I intend to buy in the next month, after getting all pumped up while reading some of the posts here! I see the benefits now, and can’t believe I’ve wasted time and money pursuing other areas…
Blondie – I’m intending to convert to P and I because I’d like to own the Blairgowrie place down the track… it’s in a great spot, a really unique place, more than an investment to me and my fiance… I see it as a place where many happy times will be spent down the track and something that I can pass on to my kids and their kids to enjoy for years to come to go surfing, fishing etc… there’s room for some sentimentality isn’t there? If I get out of the market on that part of the peninsula, it’ll be a long time before I can get back in.
I know it’d help cash flow to stay interest only, but if I do that, I’ll never own it… besides, I think I can get a decent positively geared portfolio happening regardless…
Please point out gaping holes in my thoughts… I don’t want my sentimentality to create total stupidity (partial stupidity I can tolerate, but not total) [
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