Get Rich Quick Scheme

[pentae]

Actually merlin I am about to sell ONE of my investment properties to fund the purchase of an 89 model GTR.

If your interested, its:

$95,000 2 bedroom 1 bathroom townhouse in a low income area

rental return $120 per week, already tenanted.

And as for the "dumbest idea" someones ever heard.. its really not that retarded.. if you buy 4 cars, sell them for a profit of 5k each thats a 25% return within a few months.

Particularly if you sell them once the 15 year rule is abolished and nobody has r32 sevs compliance yet.. r32 prices will skyrocket.

[Guest RedLineGTR]

we should have a financial section on sau as well

[Guest RedLineGTR]

btw was a very good read and have grown somewhat wiser

[meshmesh]

Actually merlin I am about to sell ONE of my investment properties to fund the purchase of an 89 model GTR.

mesh > :slap:

[pentae]

meshmesh: its complex.

[meshmesh]

Property value doubles every 7 years.

It's more like every 10years, but is subject to so many variables..

There is also risk here:

Interest rate rises -  if they go up from 7% to say 9% - that's an extra $140/week that i need to provide

No Tenant - have to be able to afford periods with no tenant for a while

Property Maintenence - have to factor in maintenence costs.

You picked a crap area - need to do research to make sure property will appreaciate at higher than average

Risk prevention:

1) No Tenant: Landlords Insurance - CGU is one company that's offer's landlord insurance, depending on how many properties you have it can be as low as $99per year.. covers vary, but roughly covers you for malicious damage, theft, and tenants doing a runner, and they rental coverage for up to 13weeks.

2) Interest Rates: we always budget 2% over the current market rates, regarless if it's a development project or another investment property.

3) Property Maintenance: "well that's not a risk" that's included in your budget.. everythinf else is covered under Home & Contents or Landlords Insurance.

4) Choosing the right location: well my line of work revolves around property, each quarter ourbank managers arange a meeting with a company called charter keck cramer The give advice to state/federal governments & reserve banks.. so they are the best in the biz (they also have some free info for download from there site. However based on our needs (and these will differ from everyone esle, so go seek a professionals opinion) generally speaking about the "Melbourne" market, you'd like to stay within 7-13k's of the CBD. However Melbourne's CBD appartments are a no no at the moment and docklands is not so bad if you're happy to wait around 10-15years to reap your rewards .. simply "demand vs supply" the only thing docklands has for it is > keyword > "water views".

[G0DF4Th3R]

if u wanted to do the 89 GTRs, should have done it a year ago?

wouldnt it have been cheaper then and less ppl were scrambling for every last car?

[MerlinTheHapyPig]

It's more like every 10years, but is subject to so many variables..

Risk prevention:

1) No Tenant: Landlords Insurance - CGU is one company that's offer's landlord insurance, depending on how many properties you have it can be as low as $99per year.. covers vary, but roughly covers you for malicious damage, theft, and tenants doing a runner, and they rental coverage for up to 13weeks.

2) Interest Rates: we always budget 2% over the current market rates, regarless if it's a development project or another investment property.

3) Property Maintenance: "well that's not a risk" that's included in your budget.. everythinf else is covered under Home & Contents or Landlords Insurance.

4) Choosing the right location: well my line of work revolves around property, each quarter ourbank managers arange a meeting with a company called charter keck cramer The give advice to state/federal governments & reserve banks.. so they are the best in the biz (they also have some free info for download from there site. However based on our needs (and these will differ from everyone esle, so go seek a professionals opinion) generally speaking about the "Melbourne" market, you'd like to stay within 7-13k's of the CBD. However Melbourne's CBD appartments are a no no at the moment and docklands is not so bad if you're happy to wait around 10-15years to reap your rewards .. simply "demand vs supply" the only thing docklands has for it is > keyword > "water views".

Thanks for the advise, i'll definantly check them out. I'll be talking to my financial advisor about it later this month anyway. I work in construction management (which is a great industry to work in for that sort of thing) and have been bugging our development guru with non-stop questions about it!

I worked on some of the docklands apartments actually, they aren't that great, the finish quality we were seeing was crap, and about the only attraction was water front view

[The Jake]

Why would you sell your property?? If it's positively geared and rent is paying off the property, if you have enough equity can't you just refinance or pull out some equity to pay for it???

Residual income > taxed capital gains.

- J.

[meshmesh]

a sort of "OK" book to read is : 0-130 properties in 3years (~something like that).. A lot of things I don't agree with but it's an OK book that gives you the basics of investing in property.

[MRK25T]

a sort of "OK" book to read is : 0-130 properties in 3years (~something like that).. A lot of things I don't agree with but it's an OK book that gives you the basics of investing in property.

Is that book by McKnights? A guy here at work bought it and its doing the rounds at work.

[KamikazeR33]

heres an idea

pull a cosy 480million us dollars out of ur account, buy au dollars with that... hold onto it for a few days while it climbs. then sell sell sell

i must admit the government doesnt like what that guy did but hey, he made quite a killing

[DLuded]

get a loan, negative gear it (has many advantages such as tax breaks) and if you buy wisely you will only have to pay a small amount each week on top of the payments. later on when ur older you be laughing. also capital gains with property now is looking positive- however i really wouldnt rely on houses doubling their value each 7 years. its may have happened in the past but prices can dramatically fall aswell.

the higher the risk, the higher the return. if you want a 100% secure investment then something like a government bond is the answer, but remember the returns aren't that great. however, after studying finance for 3 years ive found out that financial advisers are nothing but scum. they are extremely unethical and in some cases all they do is give you advice so their own personal portfolios will increase in value. the answer is to look around and do research before you invest in anything

[The Jake]

a sort of "OK" book to read is : 0-130 properties in 3years (~something like that).. A lot of things I don't agree with but it's an OK book that gives you the basics of investing in property.

By Steve McKnight. Reading it atm

Out of curiosity what don't you agree with?

- J.

[666DAN]

*edited cause I was wrong*

Sorry not ING...that was what was stuck in my head...I meant Heritage National Mortgage Trust (sound the same though ) and it was 9.5% not 10%

For those that wanted to know, contact:

[email protected] or go to www.rfa.com.au

As far as I remeber it was funded through property as like most retirement villages..they get to keep the housing after the occupant dies and re-sell it onto another couple for a stupid price....the cycle repeats.

It was based on it being a secured 24 month fixed term though....6 months gave a 7.75% return.

Either way there are 100,000 better get rich quick schemes...you've just got to put in the effort and time.

[meshmesh]

By Steve McKnight. Reading it atm

Out of curiosity what don't you agree with?

- J.

Don't get me wrong, the book makes a lot of sense and he's on the money "to some extent" with the way he goes about his portfolio, I just don't agree with his choice of locations. The fact I can buy some property for a ridiculous price like $50, $90K or whatever that's located 150+K's out of the city purely for it's positively geared return and some "future boom" is "in my mind" a little silly and risky. You can source properties closer to the an established or soon to be established "so called boom" in metropolitan areas that don't have that risk associated with country locations.

To be honest the book bored the hell out me... but it's still a good read to get the basic understanding of the property market.

[The Jake]

I think he just made some examples using country locales but then again I ain't finished with it yet. I've read a lot dryer material on the subject though

What other books do you recommend on the subject Mesh?

On a side note, have you read any of the stuff by Jan Somers? Interesting how she talks about negatively gearing property and how Steve (like Robert Kiyosaki) is pretty much against it. I would have thought positively geared property makes sense but you try and explain it to some people and they can't get their heads around it.

- J.

[meshmesh]

The Jake, the last book I read before that, was called "Charlottes Web" or something like that. I'm not into books, can be bothered sitting in one spot for too long... and don't believe everything I read either. Unfortunately the world we live in everyone has an alterative motive, book or not. So I guess most of what knowledge we have is based on others failure's and sucess, the opinions of professionals we pay and then we make an educated decision on what path we take.

[MerlinTheHapyPig]

some sites that i've found useful for those who are interested:

www.somersoft.com.au awesome forum.

www.apimagazine.com.au

http://www.investclub.com.au/aspnet/index.aspx

[Veilside R33]

thankyou merlin! much appreciated,the somersoft link is wonderfull.

im 19 i have quit my dream (training as a pro golfer) and im about to sell my car and into property investing, obviously there are a million questions running through my head, and i am currently doing alot of research. planning etc...

this site seems great for help and advice so thanks for the link.

heres a thread that will help with advice to anyone with little clue about to get started in property.......http://www.somersoft.com/forums/showthread.php?t=14845