Hi there
I am new on the block, trying to gain enough wealth to retire comfortably in 10 years time.
I purchased a block of land which has tripled in just 8 months, I have now used the equity from my land to purchase another block of land and construct a house, which I plan to rent out but the cost will definately not meet the 11 second solution, so I guess this will be a negative geared property am I right and is it OK, my plan is also to use the equity from this property to build a house on the other block of land also renting it out. Can someone please tell me if I am on the right track?
Thanks Martine[8]Martine,
Different strategies suit different people. With new property you are obviously going to have tax benefits with depreciation and building write-off. You might still have +cash flow property as described by Margaret Lomas in articles in API because of these non-cash deductions, that is the rent plus tax refund is more than your cash outflows.
You have obviously chosen well with your land. Congratulations on what you have achieved so farcrj
Crj
Thank you, I never thought of my investment attempts in this manner.
This is really a great site to gain advise and encouragement.
Martine[
]As crj says “Different strategies suit different people”, so only you can say if you are doing the right thing or not.
My only caution would be, that you can meet the costs of owning a negatively geared property (Please add income protection to that as well), and what is the intention?? To sell off?? Or to pay down the loan???
Just a few thoughts![
]Rgds.
Lucifer_auThanks Lucifer
My intensions are to build and hold for about 10 years after this time I am not sure, but if the worst came to the worst I could continue to pay for the negatively geared property.
I guess I will give it a go and if it doesn’t work then I could always sell.
Thanks again
Martine[]Guys, just cos it doesn’t meet the 11ss doesn’t mean it will be negative. It could be neutral.
Martine, you have done really well with your purchases, and your strategy seems fine by me. To work out if it will be CF-, CF+ or neutral, work out your interest costs, rates, etc. etc. and subtract them from the rent. That will tell you where you are at.
Cheers
MelThanks for the advise Mel
I will look at the figures and read Steve’s book again to get an idea on which cashflow this property will generate
Regards
Martine[]Who cares about an 11sec solution when you have tripled the value in 8 months! Welldone.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Terryw:Who cares about an 11sec solution when you have tripled the value in 8 months! Welldone.
Terryw
Discover Home Loans
North Sydney
[email protected][
]True words Terry.. there are many alternativesCONGRATULATIONS MARTINE
“Money is a currency, like electricity and it requires momentum to make it Effective”
Thanks Terry
For the words of encouragement I am now ready to tackle another.
Regards
Martine[]
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