Just wondering if there is a easy formula to figure out if a property is going to be positive or negative geared ?
Or a checklist of some sort I am just trying to go through properties and see If they are a positive dental return
Do you want easy or accurate?
Easy- Look at rental yield. It needs to be at least 1% higher than the interest rate (very rough).
I like to work on real figures.
Costs out- interest, land and water rates, management fees, strata (if applicable)
Costs in – rent. You can also add depreciation)
See if it puts money in your pocket or takes it out. Quite quick to work out really. Of course it doesn't take into account maintenance etc.
There are a few spreadsheets floating around that you can just put the figures in and it works it out for you.
A lot of it comes down to what sort of income you have and what you can afford to buy. Frankly in Australia if the property is positive in many cases the growth will be low. If you are going to buy a property which is negatively geared then you have to make sure that the capital growth is strong enough to cover your losses.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
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Arun Bhuta wrote:Please be careful negatively geared and positive cash flow property are more preferred then just negatively geared and negatively cash flow property.?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Report post #4- note web link above the line……Mods please address….where is hari yellina these days?
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
http://redwoodadvisory.com.au
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Hi Ivan
It is fine i have emailed Arun asking him to adjust his post accordingly it or i will deal with it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Nigel Kibel wrote:A lot of it comes down to what sort of income you have and what you can afford to buy. Frankly in Australia if the property is positive in many cases the growth will be low. If you are going to buy a property which is negatively geared then you have to make sure that the capital growth is strong enough to cover your losses.Nigel Kibel, you are clearly not in the same property market as the rest of us. Our clients are getting at least 5.2% Yield + 8-12% p.a. Capital Growth
Modernity Investing
Email MeDear Renren,
Please be careful negatively geared and positive cash flow property are more preferred then just negatively geared and negatively cash flow property.
Arun Bhuta wrote:The last thing you want is negative cash flow after tax.
Hi Arun
Why's that?
If the property is providing me with decent growth – I'm not going to be too concerned about it costing a bit to hold onto.
It all comes down to the individuals longer term strategy.
Different strokes for different folks I suppose.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Dear Renren,
Let me explain you a property is negatively geared and negative cash flow.
Property value at $120,000
Loan on the property $95,000
Annual rental return $6240
Interest on loan=$4920
Total all other expenses excluding depreciation = $4070
Total cash flow loss=$6240-$4920-$4070=$2750
Depreciation=$4500
Taxable loss=$7250
Tax percentage 35%
Tax Refund=$2538
Cash return after tax (-)$212
The last thing you want is negative cash flow after tax.
Dear Renren,
It is all about knowledge and informed decision. No business is without risk but if risks are known and benefits out weight them , then business is worth.
Ignorance in business about risk is no no.
Arun Bhuta wrote:Dear Renren,It is all about knowledge and informed decision. No business is without risk but if risks are known and benefits out weight them , then business is worth.
Ignorance in business about risk is no no.
These sentences make no sense.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
These sentences make no sense.
Well certainly not in English.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
JacM & Qld007,
You are being unkind. I am very sure you can work out the intention of Arun's post, even if it's sentence structure is outside of the normal Australian vernacular. I personally are enjoying Arun's enthusiasm for the forum.
Modernity Investing
Email MeMark it is not a matter if being unkind or not wanting Arun to post but is more a matter of monitoring the content to ensure it is suitable.
I have spoken to Arun about his posts and reminded him of the rules if the forum (same as I did to you when you joined).
My concern for other members is when I see continual blatant advertising or obvious self promotion and requesting to members contact him.
I monitor all posts to ensure that any advice given is of a general nature unless the person is suitably qualified to provide more specific advice.
Not a case if being unkind to any one member but more a case of trying to protect the wider investing community.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Further to what Richard said, it is very worrying how much incorrect information Arun is posting. He is a person offering broking services it seems. We know only too well how catastrophic it can be when someone’s finances are not set up correctly. The forums are supposed to help people make their position better – not worse. As TerryW said in a separate thread… he’s dangerous
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Arun Bhuta wrote:Dear Renren,It is all about knowledge and informed decision. No business is without risk but if risks are known and benefits out weight them , then business is worth.
Ignorance in business about risk is no no.
Richard, Jac,
Let's stay ON subject here: Arun said "It is all about knowledge and informed decision" which means to me: It's all about knowledge and making an informed decision". Which is 100% correct in all cases to with anything to do in life.
Next "No business is without risk, but if risks are known and benefits out weight them, then business is worth." which means to me: No business is without risk, but if the risks are known and benefit out way the risks then the business is worth proceeding with.
Modernity Investing
Email MeDear Ren Ren, after all of the above. Did you find what you were looking for..?
Thanks for the support Mark.
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