Hi All,
Just wanted to ask your opinion. My husband and I have recently (2 days ago actually) paid over the 10% deposit on one IP (230,000) and have 170,000 available to us (credit) should we need to access it. Many people told us to spend the total 400 on one good property, but we decided to try and get 2 if possible, which now has become a reality, and there is a 2nd property we can purchase for 170,000 – HOWEVER [blink]as I (personally) have a $77,000 capital gains tax bill owing, would it be wise to buy #2 IP, or should I just pay the bill to the taxman, build on my resources (funds) before buying anymore property? Please advise…
Cheers
Jo
I would always go and buy multiple properties if I could – it minimises the risk but I wouldn’t advise overlapping both investmenst. Wait a few weeks till you have cleared the other one in regards to paperwork and other issues and are sailing on smooth waters – unless ofcourse you can handle it and have a good solicitor who is looking after you.
So go ahead and buy multiple properties. Increases the return and minimises the risk.
Kind Regards,
George.“If You never never ask, you’ll never never know”
Thanx George,
I appreciate your advise/tips. I will keep the “overlapp” issue in mind – I agree, it can be a nuisance.
I have been buying (and reluctantly selling) for years, my husband is a bit more conservative and is fearful of “too much debt” which is why he would prefer to “wait” and build up funds a bit more first.
But I feel it is too great an opportunity to miss, and am willing to bite the bullet and buy both properties at once (I hate waiting….time costs!!!!) LOL
[biggrin]Regards
Jo
Pay your Bills first, Invest whats left over…I’m sure you’d be paying interest on any amounts outstanding.
If you can afford your 10%-20% deposit, or fund next IP from Equity in IP 1 Or PPOR, you should be fine.
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorHi Jo,
if you finf positive cashflow deals, then your husband needn’t worry because the IP will pay for itself through the tenants. With +CF deals, all you need to do is just lay down a deposit plus usually $5k for outgoings. Therefore no debt![biggrin][biggrin][biggrin]
The second bit of advice I can give is buy the property. and do what Steve does. A third of the rental income goes into paying off the debts on the investment property. A third of the rental income goes back into re-investing in other properties and a third goes to himself to decide what to do with it whether to enjoy life or to pay off his debts faster. The choice is yours but I like that system.
But the best option si to look for +CF properties so you have no debt to begin with. The tenant pays all the debt for you.[biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin]
“If You never never ask, you’ll never never know”
Hi Jo,
If you find positive cashflow deals, then your husband needn’t worry because the IP will pay for itself through the tenants. With +CF deals, all you need to do is just lay down a deposit plus usually $5k for outgoings. Therefore no debt![biggrin][biggrin][biggrin]
The second bit of advice I can give is buy the property. and do what Steve does. A third of the rental income goes into paying off the debts on the investment property. A third of the rental income goes back into re-investing in other properties and a third goes to himself to decide what to do with it whether to enjoy life or to pay off his debts faster. The choice is yours but I like that system.
But the best option si to look for +CF properties so you have no debt to begin with. The tenant pays all the debt for you.[biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin][biggrin]
Kind regards,
George.“If You never never ask, you’ll never never know”
Thanks Redwing,
I should have mentioned, I have enough equity in the house I live in to cover the debts. My husband just doesn’t like the idea of “risking” the loss of our home if we ever run into hiccups with the IPs.
George, thank you again also….but one further question…
In today’s market how can you get a positive cash flow? I have that already with other property, but on the 2 new IPs – I will owe the total amount for each. Both properties will cost us 400,000 and the rental returns will equate to approx 5% per year….in my books, that is pretty good! We own our home plus 2 other IPs “outright” and now are looking at acquiring these 2 newbies. I’d call that POSITIVE…LOL [biggrin][biggrin][biggrin]
Jo
Agree Jo..POSITIVE is a state of mind also [biggrin]
Remembere when buying IP’s if you put enough deposit in you can make any deal Positively geared…
You have to balance the Factors of Growth, Income and Risk into each IP, and evaluate the better deals…….
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorToo true Redwing [grad],
however, it also depends on the source of that DEPOSIT….is it borrowed, cash or equity from elsewhere?
As for balance….again, I AGREE completely, HOWEVER (again) it depends on one’s motive…wealth (and success) is measured differently by different folk….me personally; I am not too concerned with capital growth (although I do hope to gain some element of same) my main focus is Cash flow…so I can continue in the lifestyle that I currently enjoy (a healthy balance of work and leisure time with family & friends). [king] [thumbsup2]
Cheers
Jo [thumbsupanim]
Too true Redwing [grad],
however, it also depends on the source of that DEPOSIT….is it borrowed, cash or equity from elsewhere?
As for balance….again, I AGREE completely, HOWEVER (again) it depends on one’s motive…wealth (and success) is measured differently by different folk….me personally; I am not too concerned with capital growth (although I do hope to gain some element of same) my main focus is Cash flow…so I can continue in the lifestyle that I currently enjoy (a healthy balance of work and leisure time with family & friends). [king] [thumbsup2]
Cheers
Jo [thumbsupanim]
Hi Monopoly,
I am not sure if my comments will be appropriate but here goes anyway.
I suggest you (and very importantly Hubby too!) read both Jan Sommers and Steve McKnight’s property investment books. While they, in a sense contradict, each other they do explain the two ‘extremes’ and you will be able to clarify what you are capable of doing if you really wanted to.
Your calculations do not seem to consider the other rent you are currently receiving from your unencumbered IPs and as such your total situation is probably considerably better than you have realised. Depending on your total rent you may already be positive.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Hi
I sprout a few times on here about risk profiles
it sounds to me as though your husband really is a conservative invstor. By this i mean newer, might prefer cash to being so risky and in debt…
you are more agressive, but not in terms of being a real agressive investor as property can be both growth and income equity, if you only look to property, this is unblikely.YOu know it may take some time if ever to convince your hubby to think like you do. Maybe you both need to be looking in different or separate directions? have your own portfolios? I dont know your circumstances to really comment and I am not about to LOL
On second thoughts…by the way you can offset capital gains against capital losses, capital losses can carry over. Capital gains are in the relevant taxable year. Though…they can be deferred in some circumstances.
I think you need to really sit down with hubby and allow him to be who he wants to be, even if that means cautious. That doesnt necessarily stop you though…so maybe you can work somethig out
Yes I like two ip’s, but again the advice given said to settle one before another, after all there is no problem with a little patience….?
Elves
” a blind man may see what a sighted man may not”
Hi again Jo,
I must admit it is harder nowadays to loacte +CF properties but it is nevertheless possible. Like I always say, “where theres a will, theres a way” – You have to broaden your search and register your name with members on this site who find deals for a small fee. Positive is a state of mind till you see your debt bill and it turns negative – and this is drasty. Be open to many options as in investing overseas or interstate and ask ppl to register you on their database – they find good deals and email them to you.
Kind Regards,
George.“If You never never ask, you’ll never never know”
My sincerest thanks to you [specool]
REDWING, DEREK, ELVES & GEORGE (and anyone else I may have overlooked [blink])For your kind words of wisdom, suggestions and above all, encouraging posts.
Yes my husband is quite the conservative investor, always fearful that “the bottom will fall out”; I on the other hand am a bit more of a “risk taker” and have ventured into other areas including shares (at one time). All in all, we work well together, albeit frustrating at times, he is the love of my life. [inlove]
I have gotten myself into my current financial position through careful planning and alot of research. I agree that there is much to be learnt from those (yourselves included) whom have had far more experience than I ever could, and although my road is a slow, it is a steady one.
I am 41 years old, own 3 properties outright, work part time (by choice) and have lots of time to research the market, and other activities. And I never miss the opportunity to learn more about my favourite pass-time REAL ESTATE !
This little hare will get there EVENTUALLY !!!
I have heard your opinions, and trust me, will take them on board.
Thank you again, and I will always look forward to reading your posts with eagerness. YOU ARE ALL SO HELPFUL….THANK YOU [thumbsupanim]
Monopoly,
congratulation on your achievements!
My thought is that it might be time for you, with your husband (!), to attend a Steve Navra seminar to look at conservative investing approaches. (If you haven’t already done so, that is…)
TerryTerence McMahon
HomeWin
FinanceSaskatoon,
Thank you for your suggestion. Who is Steve Navra and where can I find out more about him first.I ALWAYS make it a policy to research any venture before I head out. I have always been doing things my own way, and to date have done okay, 3 IPs and my PPOR owned outright (debt-free) is in my eyes very successful.
Anyway, please do let me know more about this person.
Cheers,
Jo
Monopoly,
I know Steve fairly well, he’s a good guy, though fairly busy nowadays
His approach to using different assset classes synergistically is very good & he is an extremely ethical individual.
Considering your equity position, Steve’s Cashbond approach could be quite suitable for you.
It’s a bit complex to explain here – you could head over to Somersoft where Steve posts regularly & there have been a number of discussions about his approach.
You could also attend one of his seminars – which are some of the few I actually recommend as they are excellent – though get a good night’s sleep first as he covers a lot (even when it was two days long as when I did it years ago).
More info on Steve & his companies are at:
Financial advisory services: http://www.navra.com.au
Managed fund: http://www.navrainvest.com.au (you only pay fees if you exceed the ASX 200’s performance)Cheers,
Aceyducey
Thanx Aceyducey,
I will look into it and who knows, I may learn something new hey???
Cheers,
Jo
P.S. Thank you for the links I have added them to my favourites.Originally posted by Monopoly:… but we decided to try and get 2 if possible, which now has become a reality, and there is a 2nd property we can purchase for 170,000 – HOWEVER [blink]as I (personally) have a $77,000 capital gains tax bill owing, would it be wise to buy #2 IP, or should I just pay the bill to the taxman…
Buy in Canberra. You can claim all costs in the first year (not deprecatie over 5).
Buy under your name and offset the costs against your bill.Jas
Why do companies offer you “free gifts?” Since when has a gift NOT been free?Monopoly,
I also have a CGT bill to pay [guilty] But I’m thinking if I have other mega debts ot offset it, I should be ok :o) So I get back a large sum in tax and then I have to pay less CGT. If you work part-time (and therefore your wage probably isn’t that large), paying 77K CGT sounds very high! You must have made a huge CG to be paying 77k @ 50% reduction X 20% or 30% tax rate.
I say buy the 2nd IP
) Sounds like you are a bit of a risktaker. Maybe just don’t tell your husband you bought it, so he can still sleep at night [sleepy2]kay henry
) Sounds like you are a bit of a risktaker. Maybe just don’t tell your husband you bought it, so he can still sleep at night [sleepy2]You must be logged in to reply to this topic. If you don't have an account, you can register here.
