All Topics / Help Needed! / Investment property

Viewing 19 posts - 1 through 19 (of 19 total)
  • Profile photo of renrenrenren
    Member
    @renren
    Join Date: 2014
    Post Count: 2

    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

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    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.

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

    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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    We have just launched a new website join our membership today

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539
    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
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of RedwoodRedwood
    Participant
    @redwood
    Join Date: 2013
    Post Count: 340

    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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    SMSF - PROPERTY INVESTMENT - WEALTH CREATION AND FINANCE SOLUTIONS

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    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 | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mark CoburnMark Coburn
    Participant
    @mark-coburn
    Join Date: 2006
    Post Count: 181
    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

    Mark Coburn | Coburn & Co - Investment Advisors & Buyer's Agents
    http://coburnandco.com.au
    Email Me | Phone Me

    |Ph: 0405 243 547 | Property Investment Advisors |Mortgage Brokers|

    Profile photo of Arun BhutaArun Bhuta
    Participant
    @arun-bhuta
    Join Date: 2014
    Post Count: 41

    Dear Renren,

    Please be careful negatively geared and positive cash flow property are more preferred then just negatively geared and negatively cash flow property.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    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
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Arun BhutaArun Bhuta
    Participant
    @arun-bhuta
    Join Date: 2014
    Post Count: 41

    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.

    Profile photo of Arun BhutaArun Bhuta
    Participant
    @arun-bhuta
    Join Date: 2014
    Post Count: 41

    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.

     

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539
    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 Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    These sentences make no sense.

    Well certainly not in English.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mark CoburnMark Coburn
    Participant
    @mark-coburn
    Join Date: 2006
    Post Count: 181

    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. 

    Mark Coburn | Coburn & Co - Investment Advisors & Buyer's Agents
    http://coburnandco.com.au
    Email Me | Phone Me

    |Ph: 0405 243 547 | Property Investment Advisors |Mortgage Brokers|

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Mark 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 | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    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 Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Mark CoburnMark Coburn
    Participant
    @mark-coburn
    Join Date: 2006
    Post Count: 181
    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

    Mark Coburn | Coburn & Co - Investment Advisors & Buyer's Agents
    http://coburnandco.com.au
    Email Me | Phone Me

    |Ph: 0405 243 547 | Property Investment Advisors |Mortgage Brokers|

    Profile photo of Little_StoneLittle_Stone
    Participant
    @little_stone
    Join Date: 2014
    Post Count: 17

    Dear Ren Ren, after all of the above. Did you find what you were looking for..?

    Profile photo of Arun BhutaArun Bhuta
    Participant
    @arun-bhuta
    Join Date: 2014
    Post Count: 41

    Thanks for the support Mark.

Viewing 19 posts - 1 through 19 (of 19 total)

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