losing badly i think

Ooops – sorry about that one my first post didn’t exactly work too well.[]

What I meant to say was Oh my god! your losses were just under 1/2 of my husbands total annual wage.

I am no expert, but I would suggest sacrificing one of your properties to pay back the other debts in an effort to create +c/f in the remaining props. You should then easily be able to use this +c/f to fund more purchases.

I have invested in neg geared property for the past couple of years but only so that I could sell of what I needed to create a +c/f, which is what I have just done.

The accountants on the forum might suggest that you sacrifice the one that creates the least CGT -but covers a large portion of your debt. See what they think

good luck

Brooke

another option is to find out how your accountant came up with those numbers? even if you still owed the complete amount from a interest only loan on the 5 properties . A refinance today would be 552000 @ say 6.5 % would give repayments of 35880 pa rental income at todays market prices would have to be in the facilinity of ip1-190pw, 2-180pw,3-180pw,4-170pw,5-110pw, total of 830 pw – 43160 pa
that gives a positive income of 7280 pa but in a real world you will probably have a vacancy rate of 20 percent would now be a loss of 1352 pa which would leave you out of pocket $26.00 per week.

This is jsut a rough calc and you would have to alow for fees etc .

Again just my thoughts and ive probably got it all wrong []

>> am no expert, but I would suggest sacrificing one of your properties to pay back the other debts in an effort to create +c/f in the remaining props. You should then easily be able to use this +c/f to fund more purchases.<<

How does that work Shnook ?

Would a refinance not be a better way to go ?

Pisces133

chris

were they all your ‘out of pocket’ expenses, or were they inclusive of depreciation, and only the ‘taxable’ losses.

As xyzzy says, you need to look at it from a cashflow viewpoint, rather than just what the accountant says for your tax return.

Also, if they are LOCs, you could always let the ‘losses’ build up a little, using the spare equity to pay for it, until the rents start increasing enough to cover all costs.

My first priority would be to establish the actual cash position.

Cheers
Mel

Hi Chris,
I am in a very similar position to yourself at the moment and have been pondering just what to do to try and make things easier however at this stage i have not had any real problems servicing the loans and still have money left aside.
For this reason i have decided to keep all my neg geared properties and use the equity that i have to but positive cashys. Remembering that your properties that you have now will most likely be in better locations than you will find positive cashy’s and hence will usually get better capital gains while you new positive cashy’s will start to produce income !!
Hope i have helped in some tiny way!
Also as others have mentioned just cause your accountant shows a loss it doesn’t mean you are actually making such a big cash loss!!

“Sooner or later the man who wins is the man who thinks he can “

In all these discussions which deal with selling and buying, I wonder how many people in Victoria realise that buying costs on a median priced property are around $19,000. Then to sell after 12 months, selling costs amount to about $20,000 inc GST (on a typical gain of 8% taxed at half the gain and a marginal rate of 48%), agents and legals.

This is darned close to a dead loss of $40,000 less a bit of deduction from CGT. In the real world there have been other costs as well, and a couple of legal bills for conveyancing.

Buying AND selling is for mugs. Buy and hold is the best approach.

So, if you buy a median priced property and plan to sell in just over a year, you must make a profit of about 11.5% just to break even.

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thanks shnook &risky they are all open lines of credit can pay more than the interest component which i do only to the tune of 15/ 20 $ per week each prop your ideas make a lot of sense will be seeing my a/c and lender very soon
cheers chris

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Why have so many LOC’s, you only need one to take advantage of the concept. LOC generally attract a higher interest rate. Why not look into refinancing and see how much you can save.

Mick INC