Anyone Live In City Cbd?

[Beer Baron]

its not really a loss. you're actually getting $400 p/w of your mortgage paid for you, i dont know if thats covering your costs or not, but $400 of a $650 p/w payment (for e.g.) is better than $650 completely out of your pocket when you come to live in it (if you do). you're virtually getting the place for 1/3 of the price.

thats the way i see it and thats the reason why i'd never look into renting.

my money has always been in property/development and a fair bit of investing (shares). property has showed a much greater ROI if you can get into it.

if you sell you'll get a bit of money out of it but you might as well refinance and keep the property if you want to re-invest some of your cash.

yeah I have the place slightly negatively geared. but most people I speak to these days think negative gearing is a waste of time. you are better off going for places that are cashflow positive. which is actually pretty hard to do. my place was more heavily geared when I first had it. since I increase rent every year it's now almost cashflow positive (which means my tax offset is lower, but I'm not putting hardly any money into the property).

if you can find say a 1 bed place for $350K or so and rent it for $400pw then you will almost certainly be getting positive cashflow and of course in that case it's a winner as only $70K of your money is tied up and the property is paying for itself. but trust me it's not that easy.

[SECURITY]

eventually its going to be worth more to you if you've got your loan out of the way in whatever time it takes then rely on the rent as a primary source of income when you're older.

$400 and possibly $500 p/w in the future isnt a bad thing when the place is paid off. and its going to be more steady than any other investment you decide to venture into.

the worst thing you can do to yourself as a young home owner is sell the place if you can afford to keep it. its going to get harder and harder to get into property in the future.

[Alien]

and the trick here is to

find someone who will pay cash for the first 6 months without asking for a receipt or involving an agent.

nice advice dude!

[Abo Bob]

i think security is right

i'm getting the apartment not so much for capital growth but for rental return

basically, with the rent being paid, i will be getting the apartment for less than 1/2 of the price

in the city, as long as there is the cbd and there are students, i think it will rent out ok

4-5% minus expenses is not a good return on your money Eric. You need the capital gain to make it worthwhile.

Also, the more the government drops payroll tax the less attractive negative gearing is. It's still worthwhile though, particularly if you're in the top brackets.

I want to get into property development but the outlays and the learning curve on your first attempt will be huge.

[Beer Baron]

4-5% minus expenses is not a good return on your money Eric. You need the capital gain to make it worthwhile.

Also, the more the government drops payroll tax the less attractive negative gearing is. It's still worthwhile though, particularly if you're in the top brackets.

I want to get into property development but the outlays and the learning curve on your first attempt will be huge.

couldn't agree more. like I said, negative gearing is great and makes you feel nice when you get that fat tax refund (especially if you offset enough to drop to a lower bracket) but a loss is still a loss (it's just less of a loss when you are using negative gearing). even at the top marginal rate you are only getting back 45odd cents in the dollar. what would you rather. 45 cents? or 1 dollar? I know which one I prefer.

[sh@un]

^ lol

everyone hates the tax dept so much they are happy to lose moneh not to have to pay tax

[Beer Baron]

yeah I can't fault that logic either.

[Michele]

NEVER NEVER sell. Always use the equity to buy again. A well positioned property should double in value every 7-10 years. Only ever go interest only on investment property, rent should 'all but' cover the interest, you may be out of pocket for incidentals which are claimable and equates to near nothing in the scheme of things when you consider your captial growth. Build your empire by setting a target to be 4million in debt, but be worth 8m in xx amount of years.

PS I don't work in real estate... but I am building my empire this way and it works.

If you want to know how... these people will show you, and its free.

http://www.tic.com.au/Default.aspx

No its not a scam or time share etc etc you can personally me if you think its dodgy. They're like an agent, only they research great locations and property has to meet certain criteria before they will take it on... they anticipated many of the booms including Perth and Gold Coast well in advance and helped people find properties. They are also like a support group and have some very interesting free conferences to help with tax etc and property investment. I have no invested interest in them other than I have bought properties through them. They do not try to flog you stuff/property etc and they'll leave you alone.

When I go to their meetings, I am inspired by how many properties these people are aquiring with the right information. Some have a target to purchase 1-2 properties a year... and they do.

I also recommend a book called "From 0 to 260+ Properties in 7 Years" by Steve McKnight who can show you some formulas for finding and evaluating a positive geared property.

[Beer Baron]

lol, thanks michelle. and yes I've read steve mcknights book (about 3 or 4 years ago). doesn't mean these guys have all the answers.