I went to a news agency today and had a quick read on Propety Invertor magazine. It has an article about a 32 years old woman that started investing in IP in 2002 and now has portfolio 2.4 mill (11 IPs) and still buying. She used to work as a secretary on low income also used to sell properties. I wonder how many investors are like her? Started with practically nothing and relying heavily on rents alone. I don’t know if she has much equity behind her when she started. If the interest rate doesn’t go up she will get out of it pretty wealthy (she still buying). It would be suicidal to do this in early 90’s but I quess time has changed. Or has it?alfamickParticipant@alfamickJoin Date: 2004Post Count: 41
I thought that article was cool, but overplayed the situation a bit. The thing is, she quit her job but on the strength of her husband’s income, i.e. it’s not quite the same as someone quitting the workforce and investing full-time – it’s someone going from 2 incomes down to 1.
MicklazyboyMember@lazyboyJoin Date: 2003Post Count: 23
I havn’t read the article, but might have a similar story. Two years ago at 28 years old and with about $250k equity I gave up work to invest in res property, after 1 year my wife also left work. It’s great, in fact have just sold the last of our properties to invest in other things. In two years I purchased property worth about 2.5m. Last year I made $850k after tax, sure beats working for $35k like I use to.My advice don’t just read about it, do it!!!!
Lazyboy, will you be able to do the same if you start now? Your timing was perfect but the boom is over.aussierogueParticipant@aussierogueJoin Date: 2003Post Count: 983
zen – he made 850k after tax and all you can intimate is that he was lucky. your very tough!!
lazyboy – credit where credit due. regardless of the reasons, many of which im sure had alot to do with smart investing – well done!!! wish it were me!!lazyboyMember@lazyboyJoin Date: 2003Post Count: 23
Hey Zen, you are completely correct. I most likely couldn’t get the same results if I started today, that’s why I’m not starting today! and also why I have cashed up my IP’s. The great thing about residentaial property is that there are ways of completely eliminating your risk,(buy +cf in good areas where the demand is certain, etc.) The mistake some investors make is that they fall in love with their investments.In my view an investment is there to work for you, once it has done it’s job it’s time to move on.sydjfMember@sydjfJoin Date: 2004Post Count: 1
I have read the same article and I am having trouble understanding how she is achieving positive cash flow if the average gross yield across her whole portfolio is 6.9% (my calculations). The last two properties she bought (Ferny Grove and Jimboomba) are earning only 4.66% and 4.4% gross yield respectively. I thought maybe she is relying on claiming fantastic tax depreciation costs to give her positive cash flow. I have talked to a quantity surveyer and he told me you should never rely on a T.D.S. (tax depreciation schedule) to give you positive cash flow. Does anyone out there have any ideas on how this lady might be achieving positive cash flow?
No I am not saying that it’s all luck. Lazyboy did well because he bought well and correct timing. He did something when he saw the opportunity and he is lucky. That’s what I am saying. Obviously he is not expecting that the market will be as good in the next few years otherwise he wouldn’t have sold his IP’s. Good for you lazyboy. You can only count the profit after you sold them like what you did.
Bad experience can make you too cautious and good experience make you very motivated on optomistic.
I went through the 1990’s with very high IR, even though might never happen again it has made me too cautious, especially now. I admit that but still find it difficult to think differently. Especially now. Maybe I need couselling.[biggrin][biggrin]AceyduceyParticipant@aceyduceyJoin Date: 2003Post Count: 651
I don’t consider taking action when seeing an opportunity as ‘luck’.
Luck may be involved in an unexpected evemt or opportunity occurring, but it takes skill and confidence to actually use that opportunity to create wealth.
We’ve moved from shares to businesses to property back to shares and businesses in the last 10 years, riding each wave as it comes.
I don’t KNOW which asset group (or sub-group) will do well tomorrow, so that bit is ‘luck’ – however I have found that being in the right place at the right time has very little to do with chance and a lot to do with knowledge, confidence, the ability to recognise opportunities and the ability to execute.
In theory, there is no difference between theory and practice. But, in practice, there is.
– Jan L.A. van de SnepscheutFFCommMember@ffcommJoin Date: 2004Post Count: 627
” I have read the same article and I am having trouble understanding how she is achieving positive cash flow if the average gross yield across her whole portfolio is 6.9%”
I think she is using the tax benefits to create positive cashflow.