Hi to all you fellow investors.
I’d love to start the journey of living off my passive income but I have a hitch.
I bought an investment property about two years ago. It’s negatively geared and the tenants are great. I found out recently that I payed $30 000 over the market price due to a two tier marketing scam. Anyway I’m now unsure of what to do with it. I don’t want to sell it because I’ll obviously lose too much. Should I use the $130 000 equity in my principal place of residence to buy a positively geared property to at least neutralise the mortgage repayments? I suppose I could then wait till the property appreciates in value and consider selling it. My only worry is the time factor before I see any capital gains. Any comments?Regards
Hey Jezzah,
Without knowing all the details. Why not try and wrap the property to someone thus turning it from Negative to positive. It will also allow you to sell it to an owner not a renter. Maybe the people in the property would be interested in buying the place off you. What sort of numbers are we talking about for the property ???Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesHI AD
Thanks for your reply.
I owe about $140 000 for the property. As I said it’s neg. geared and rented for $190 P.W. I contribute $994 per month in P.I loan repayments. I recently got it valued and was told I could get up to $155 000.Regards
Why not consider wrapping it at $155 – $165K which will give you a cashflow and turn that neagtive to positive. If you want to know more on wrapping check out some of the old posts as they will give you the understanding you may want.
Any other questions fire away.
Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesSounds like a good idea. The beauty of it is that I won’t be touching my equity from my home and still be gaining a positive cash flow. Thanks for your advice.
The other upside is if they are eligible for FHOG and have a deposit then you could get some money back out of the deal ASAP and use it elsewhere on a deal.
Just a thought.
Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesThe more I look at this forum the more questionsI have- I don’t where it’s gonna stop!
Correct me if I’m wrong.
So really all you need is a cash deposit to cover the 10% and closing costs to secure a property. Once the property is secured you can then negotiate a wrap. The differnce in loan repayments between the wrapper and the wrapee? making up the positive cash flow.
So potentially I can make more than a few wraps from the existing $130 000 equity in my principle place of residence?Regards
Jezzah
You’re spot on with what you’re saying. Also rememeber when you onsell your wrapped property you are collecting a deposit so this lessens the amount of cash left in the deal.
Take care
David U[
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