This is my very first post to this forum so be gentle!
I have read a couple of good books lately – Rich Dad Poor Dad, and 0 to 130 in 3.5 in particular – and have become inspired to begin searching for some +ve gearded property to invest in.
I have been down the -ve geared track fairly succesfully to this point – I say successful as my 1st -ve geared property has finally gone +ve cashflow after about 10 years, but I have a second property that is VERY -ve geared (obviously I bought it before I read the books!) Even though it is costing me through -ve cashflow, I believe in this property as it is absolute waterfront on the sunshine coast so capital gain should work in favour.
I have decided to search for +ve cashflow property, my question to the forum is this – is the best approach tactically to sell the -ve geared property or keep it in the portfolio and simply add +ve cashflow properties to replace the lost income.
I have no cashflow problems currently in terms of meeting payments, and have heaps of equity so borrowing for cashflow +ve should not be a problem. If I sold the -ve cashflow property I would probably make a modest profit after tax, but the capital growth has been strong even through the slowing of the market (estimated $40k in just over 12 months).So – what do you all think?
Hi Doug
Firstly welcome to the forum and i hope this is your first of many posts.
On a personal note i adopt the poilicy never never sell as long as the properties you are holding you feel have some longer term advantage and will not be of detriment to your borrowing capacity or equity in the meantime.
In the properties are increasing in value why not structure your loans correctly and use the available equity to balance your portfolio.
A mix of both + / – never hurt anyone.
Without knowing the current mix of how your loans are structured it is difficult to give further advise in this respect.
Good luck with your search and email us if you want any further advice.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Thanks Richard
Just wondering – is it possible to get finance on apartment <50sqm as I have come accross a potential deal for a studio in Bris CBD, returning $230 wk and listed at $95k, haven’t got into the nuts and bolts yet but I’m guessing its less than 50sqm.
Regards
DougDoug Finch
tell us more doug – $230/wk $95k price…. come on, what else…..managed hotel room…..student accommodation…..
why don’t you pay for it with cash? better than having money in the bank?
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker BrisbaneIts student accomodation studio. Don’t have $95k in my back pocket….but do have equity! Saw some other similar but at 110k, and they are 19sqm (!)
Regards
DougDoug Finch
I am told and hear that lenders don’t like less than 50m2 but I have not had a problem, using equity though – so I suppose any more than 80% LVR might be a problem without other equity or the balance in cash. Your student accom deal seems too good to be tru.
Hi everyone,
This is my first entry on the forum (I’ve been observing for a while!). Great forum and excellent resource for investors.
I agree with Ronny – this deal does sound too good to be true. Can you tell us more about it Doug? What do others think of it?
Cheers,
Adam
This deal wasn’t as good as first appearance – i guess that isn’t uncommon, but still not too bad, it would still be cash flow positive with a 10 – 20% dep. I was actaully looking at an old listing (and old price), and the rent quoted on that ad was not right. The updated price / rent is $108k, $200pw return. Outgoings about $3.5k p.a.
Finance I am guessing is the diffuiculty as it is 19sqm.
Anyone like to comment, I have read conflicting reports about student accom.Doug Finch
Ok
So there is another similar but better deal here![biggrin]
Asking price $125k
Annual outgongs based on loan of $131k, $13622.
Annual Income, $14532Cash positive $909 pa, with no up front cash required and annual rent reviews with min 3% increase each year for last 8 years.
I can access a loan for 100% plus costs based on equity in other properties I have.
So this looks like a goer to me, ready to make an offer to try and make it even better! [cigar]
Can anyone help with these questions?
This is a studio in a high rise apartment block, I feel there is no need for a building inspection – am I right?
What is the best way to analyse the adequacy of the balance / contributions to sinking fund?
The furnishings are 8 years old – can I start a new depreciation schedule if I go ahead with purchase?
Any other considerations for this type of property?
All input gratefully received!!
Dougdoug, let it go …
“Finance I am guessing is the diffuiculty as it is 19sqm”
mate, you guessed it.
like, a garage is bigger than this, why would a lender treat it as A Class Security???
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker Brisbane
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