Property

[dr00]

country property is also something to look at for positive cashflow apparently. im reading a book at the moment called "0-130 properties in 3.5 years" by robert knight which is basically about investing in positive cashflow properties. he has over 130 properties generating about $200k a year in positive cashflow.

im only about a quarter of the way in but my uncle recommended it to me as the best book hes ever read on property investment, and hes got millions in property all round australia. both residential and commercial.

[ButtNekid]

I understand the negative gearing negative cash flow bit,

BUT

does it not work like this

I earn $100K per year give or take, pay 42 cents which means i take home say $58K.

I buy a rental for say $200K, after the renter kicks in $200 pw, I pay the balance on the mortgage of $100 per week, meaning my expenditure on the property is $5,200 per year. Now that $5,200 is not a loss, it is going in to pay off my rental property along with the renter of $10K per year (thanks mate).

That $5,200 plus all the rates etc and any improvements/maintenance items total $10 K per year, meaning my taxable income now reduces to $90K and i now take home $52.2K per year (ie only a reduced take home income of $5,800), but that reduced income is not lost, it has gone to pay off a house??? Aint this money that the tax man would have taken anyway???

It is over simplified but that is how i understand it to work.

As i said, ill go and see an FP and let you know what he comes up with. I am sure there are heaps of people in here that are in my situation (ie a good income after years at Uni and want to make good use of it asap). If i need to sell off my liabilities in the short term for longer term wealth, so be it (say bye bye to the ute i aint even taken delivery of hehe)

FOR SALE: UNUSED 2006 VZ 6 Litre, all the fruit, $49,289.... that's $10K below market value and you can take delivery of her from new....... (i bargained with the dealer very well and inside contacts help - Holden's profit on my ute is .... $485 hehehe) 0438 942 693

[dr00]

generally you will make interest only repayments so you will not be paying off the house. the idea is the capital growth is more than all those expenses. you can buy 1000 positively geared properties and the more you buy the less reliant you become on your working income, but the more negatively geared ones you buy the less money you have for life and the more reliant you become on your working income.

[aaargh1]

bragging bastards i hope all your investment houses are full of squatters - and i bet mummy and daddy helped u all get in the first ones...........

when your bragging how well you hqave done and how much you made spare a thought for all us poor bastards who have to pay more than is physically affordable.
cos of all the greedy investors around we are all screwed

THANKS I HOPE YOU CAN SLEEP AT NIGHT
[/b]

it has been said but.... ON A VERY EXPENSIVE BED WITH EGYPTIAN COTTON...
dood i came from absolute nothing austudy, dole to now.... it is totally up to you to make your own world, yes sometimes starting from nothing takes longer, but he who laughs last..... i am so proud of everything being MINE and no spoons.... it is easier to make a million from a million than a dollar from a dollar, but you have to Want to do it

Instead of crying about it, how about striving yourself to achieve what these people are sharing and work harder, smarter, or get an education, take risk, delay gratification, listen to those with a net worth more than yours, (like those above)….…… instead of thinking the world owes you something.

[/b]

all this

If anyone should be having a whinge, it should be us.....having to pay a pension to you baggy arsed losers who retire with fuckall cos you weren't prepared to give it a go and make the sacrifices required.

Instead of the I want it now and i'll get it on credit attitude, how bout going without for a while like the rest of us did.


WHEN INTEREST RATES WERE BETWEEN 17 AND 18 PERCENT...so don't you dare even think about having a whinge about rising interest rates.

[/b]

all dat

Commercial property is often overlooked but a good choice when chasing the yield as all outgoings (rates, taxes, managing agents fees etc) are paid for by the tennant and not you, therefore the rent is net in your pocket and the yield is generally higher than resi.

Deej
[/b]

uh huh

[Deej]

country property is also something to look at for positive cashflow apparently. im reading a book at the moment called "0-130 properties in 3.5 years" by robert knight which is basically about investing in positive cashflow properties. he has over 130 properties generating about $200k a year in positive cashflow.

im only about a quarter of the way in but my uncle recommended it to me as the best book hes ever read on property investment, and hes got millions in property all round australia. both residential and commercial.
[/b]

Not a bad book that but it contains only one vital lesson - buy property and gear it to have a positive cash flow.

Here endeth the lesson.

generally you will make interest only repayments so you will not be paying off the house. the idea is the capital growth is more than all those expenses. you can buy 1000 positively geared properties and the more you buy the less reliant you become on your working income, but the more negatively geared ones you buy the less money you have for life and the more reliant you become on your working income.
[/b]

Bing.

[Deej]

does it not work like this

I earn $100K per year give or take, pay 42 cents which means i take home say $58K.

I buy a rental for say $200K, after the renter kicks in $200 pw, I pay the balance on the mortgage of $100 per week, meaning my expenditure on the property is $5,200 per year. Now that $5,200 is not a loss, it is going in to pay off my rental property along with the renter of $10K per year (thanks mate).[/b]

Nope, you only get the tax benifit on the shortfall between income (rent) less costs (interest, R&T, levies, management, maintainace, depreciation, etc). Therefore you will get a tax refund, say, if just looking at interest along, of $2184 which means you are still out of pocket $3016 (assuming that interest figure you mentioned is interest only and not P&I).

That $5,200 plus all the rates etc and any improvements/maintenance items total $10 K per year, meaning my taxable income now reduces to $90K and i now take home $52.2K per year (ie only a reduced take home income of $5,800), but that reduced income is not lost, it has gone to pay off a house??? Aint this money that the tax man would have taken anyway???[/b]

Nup, you dont get any tax benifits for paying off the principal amount of the loan, only the interest amount (the cost). Hence the reason most investment property loans are just interest only as you are best spending your additional cash paying off your homeloan (if u have one) rather than the investment property cos you dont get any tax benifits for interest on your place of residence, best get rid of that first.

FOR SALE: UNUSED 2006 VZ 6 Litre, all the fruit, $49,289.... that's $10K below market value and you can take delivery of her from new....... (i bargained with the dealer very well and inside contacts help - Holden's profit on my ute is .... $485 hehehe) 0438 942 693
[/b]

The best investment decision you will make all day.

[Infusi0n]

Wow, talk about being left behind. I look at my education (currently 1 year into PhD-ism) and my tax-free scholarship derived income (18,400 PA) and wonder how the hell I am ever going to compete with my friends who left school at 18, got straight into the IT industry and have been earning 40/50k up until now (25). Most have houses and are getting into investments heavily, I still live with the Folks ... Now the general consensus is that a continuation of education will result in a higher pay, this is not true with PhD Post Docs in Science, out of 8 years of Uni I will be walking into 45-50k CONTRACT jobs and NOT into 65/70k permanent positions such as academia used to offer (and still offers to those with the correct resume). Now certainly every job has perks associated with it, Two things are available to me, 1) The ability to truly travel almost anywhere in the world and have a recognised degree, at this level it is more about contacts than the piece of paper, but you do need it. 2) There is a certain job satisfaction you get working in the medical field (especially oncology) that I know people who I work with enjoy).

So in my young, fairly uneducated (business wise certainly) and conservative mind I would say that those who want to succeed should start Young. 7 Years of education have definitley put me behind the rest with money and investments.

[dugy]

So in my young, fairly uneducated (business wise certainly) and conservative mind I would say that those who want to succeed should start Young. 7 Years of education have definitley put me behind the rest with money and investments.[/b]

Only this year have I started to earn more than I did when I was a T/A on the mines in 1995.
If I had've stuck it out imagine the real estate I could be sitting on......
FIFO on on the mines, doing 80hrs a week isn't what I wanted to be doing when I'm 40.
So at the time I figured getting a piece of paper from uni was the best decision....

[hobbs]

If anyone should be having a whinge, it should be us.....having to pay a pension to you baggy arsed losers who retire with fuckall cos you weren't prepared to give it a go and make the sacrifices required.

Instead of the I want it now and i'll get it on credit attitude, how bout going without for a while like the rest of us did.



My wife and I worked our arses off in the eighties, put off having a family, went without luxuries and eating out, and as a result paid our first house off in 18 months.

WHEN INTEREST RATES WERE BETWEEN 17 AND 18 PERCENT...so don't you dare even think about having a whinge about rising interest rates.



I will and do sleep well at night....and i'll sleep even better knowing that there may not even be a pension when whinging children like you get to retirement age and you are forced to take care of yourself.
[/b]

mate i am not a child i am 31, i drive a truck from 4 am to 6-7 pm 5 days a week and take home a grand, but still it is hard to get mergage when the cheapest house in paper (carramar which is 45 min drive from work) is still 350 - its even 280 for a fibro dogbox in gosmells

[Hewie]

Simon .. can I suggest that until your making a significant and constant amount from your investments that you keep the equation simple.

Tax reducing investments are wonderful things but they arnt the be all and end all.

I know having the latest and greatest it fun.... but as Deej says delay gratification.

I could have a nice car... I have an excel. I dont give a shit. When Im sitting on my 80 foot boat in the bahamas ... retired @ 40 it will be worth it.

I once worked with a guy that made 3 million a year. (after tax) he drove a datto until it died.

[Fastgirl]

mate i am not a child i am 31, i drive a truck from 4 am to 6-7 pm 5 days a week and take home a grand, but still it is hard to get mergage when the cheapest house in paper (carramar which is 45 min drive from work) is still 350 - its even 280 for a fibro dogbox in gosmells
[/b]

Well if you have the licences for driving trucks, go north then and work in the mines for 12 months, dont spend any money for 12 months, and I guarantee u will be able to afford a home for $350k. If you have a partner, she to can drive trucks on mine site, in fact female truck drivers are thought of as being better handlers of the big trucks. Look into it, go to a recruitment agency and inquire to see if this could be an option.

Dont think you cant when you havent look at other avenues you can use your skills. And working 14 - 15 hours a day, and taking home $1000 per week can be improved on.

[Deej]

I could have a nice car... I have an excel. I dont give a shit. When Im sitting on my 80 foot boat in the bahamas ... retired @ 40 it will be worth it. [/b]

80 foot? Comon Hewie? Thats just a tender!

[Hewie]

80 foot? Comon Hewie? Thats just a tender!
[/b]

Did I say 80 .... thats meant to be 280.

[dr00]

definition of delayed gratification:

hehe

[Deej]

Did I say 80 .... thats meant to be 280.
[/b]

Or 414!

Largest Private Yacht in the world. Belongs to Paul Allen (co-founder - Microsoft). USD$200m.






Soon to be outdone by Larry Ellison's (Oracle) dingy at a mear 452'8" (ask any girl, those 8 inches are critical). Currently undergoing sea trials.

[gsxrando]

so true.......



Starting a trade was best thing i ever did when i was 17...

Wow, talk about being left behind. I look at my education (currently 1 year into PhD-ism) and my tax-free scholarship derived income (18,400 PA) and wonder how the hell I am ever going to compete with my friends who left school at 18, got straight into the IT industry and have been earning 40/50k up until now (25). Most have houses and are getting into investments heavily, I still live with the Folks ... Now the general consensus is that a continuation of education will result in a higher pay, this is not true with PhD Post Docs in Science, out of 8 years of Uni I will be walking into 45-50k CONTRACT jobs and NOT into 65/70k permanent positions such as academia used to offer (and still offers to those with the correct resume). Now certainly every job has perks associated with it, Two things are available to me, 1) The ability to truly travel almost anywhere in the world and have a recognised degree, at this level it is more about contacts than the piece of paper, but you do need it. 2) There is a certain job satisfaction you get working in the medical field (especially oncology) that I know people who I work with enjoy).

So in my young, fairly uneducated (business wise certainly) and conservative mind I would say that those who want to succeed should start Young. 7 Years of education have definitley put me behind the rest with money and investments. [/b]

yeah but is he happy with his life??????? I fucken would be !!!

Or 414!

Largest Private Yacht in the world. Belongs to Paul Allen (co-founder - Microsoft). USD$200m.






Soon to be outdone by Larry Ellison's (Oracle) dingy at a mear 452'8" (ask any girl, those 8 inches are critical). Currently undergoing sea trials. [/b]

[ButtNekid]

haha me ute is now for sale before i even took delivery of it. I figure if i dont buy that, i can walk straight into a house asap and begin my wealth accumulation! so in say 5 or so years, the delayed gratification come flowing!

Cheers for all your comments, unlike some, i have walked away with a new found wisdon, now to find a buyer for the ute!!

[Fastgirl]

haha me ute is now for sale before i even took delivery of it. I figure if i dont buy that, i can walk straight into a house asap and begin my wealth accumulation! so in say 5 or so years, the delayed gratification come flowing!

Cheers for all your comments, unlike some, i have walked away with a new found wisdon, now to find a buyer for the ute!!
[/b]

Great to see you taking the advice on seriousley Simon. You have taken the steps necessary in order for your life to be different in a positive way.

[Hewie]

MMMMM octopus.

[Deej]

MMMMM octopus.
[/b]

mmmmm spensive...

U know it is said to cost 20% of the purchase costs a year to run Octapus? That’s a mere USD$40m p/a just to keep the thing afloat.

Spensive pussi.

haha me ute is now for sale before i even took delivery of it. I figure if i dont buy that, i can walk straight into a house asap and begin my wealth accumulation! so in say 5 or so years, the delayed gratification come flowing!

Cheers for all your comments, unlike some, i have walked away with a new found wisdon, now to find a buyer for the ute!!
[/b]

U owe me a beer in year five.

*Dus a discounted cashflow calc to bring back value of beer to net present value*

*scratches head*

Thats a glass of water!! Must delay gratification and strive for the beer, must.

EDIT: If I reinvest my beer in you until year 10, can I have a bottle of Billecart Salmon?