Depends on how lenders view my not having a "paid employed job" any longer.
Otherwise we plan on buying another property in June or July.
What is your Cash Flow Position of your IPs?
- Thread starter sash
- Start date
Depends on how lenders view my not having a "paid employed job" any longer.
Otherwise we plan on buying another property in June or July.
Looking at about $9K -ve across two IP's.
Looking to take this years tax return to renovate one, to up the rent and increase depreciation as it's basically tapped out.
2011 will be a year to further pay down debt on PPOR, and increase cashflow of IP's through renovations to try to move into cash flow neutral territory.
Might increase investment in equities as well in the back half of this year. I'll make a call on where the market / economy / my cashflow is in early 2012 to start setting sights on accumulating another IP.
Looking to take this years tax return to renovate one, to up the rent and increase depreciation as it's basically tapped out.
2011 will be a year to further pay down debt on PPOR, and increase cashflow of IP's through renovations to try to move into cash flow neutral territory.
Might increase investment in equities as well in the back half of this year. I'll make a call on where the market / economy / my cashflow is in early 2012 to start setting sights on accumulating another IP.
alas this did not last but still have a CF+ position but it is more like 38k!
How come your CF is only 38k when you have $3m-$5m asset base with 35% gearing? Not to mention your buys were probably pre-09 boom?
Well...one of the reasons is that my fixed rates are coming off from 5 something to very high sixes and low sevens.
I did have 60k per annum.....25% of my portfolio is post 2009....the other reason is that expenses have gone up considerably in the last 3 years ...in partcular expenses such insurance and some rates.
I did have 60k per annum.....25% of my portfolio is post 2009....the other reason is that expenses have gone up considerably in the last 3 years ...in partcular expenses such insurance and some rates.
I would've thought your CF would be much higher. Just a rudimentary calc:
Portfolio: $3m
Debt: $1m (35% gearing)
Interest Per Year @ 8%: $80k
Rent @ 5% Yield (since you hold outer suburbs properties): $150k
CF+ = $70k
I didn't factor in landtaxes / rates etc, that must be some $30k or something then I guess. Obviously if your portfolio was $4m or $5m it'd be even higher (since all I know is your portfolio is somewhere b/t $3m-$5m)
Cos the asset base is mainly residential property.
Hmmm.....well let me go with your assumptions....but you maybe surprised for 10 properties say $300 per property....each costing say $4k annum for rates, water, insurance, property management, strata, repairs, etc.
So that leaves with only 20k after these expenses....some of inner city properties in Sydney cost me even more. Though they have tripled in some instances in 10 years.
I have a friend with a 650k unit in a bluechip Sydney suburbs he is really crying, he only gets 550pw in rent. Strata is about 4k.....rates another 1k....water $650....Management $2k.....insurance $350....repairs about $1500 (tradesmen over quote as they think he is rich). So $9.5 gone just on fees...
His mortgage is about 500k.....about 38k per year. The growth has been ordinary at about 60k over the last 3-4 years he has held it.
The ones I bought in Melbourne 3.5 years ago are fantatic they are now returning between 8.2% and 9.8% gross. One is neutrally geared before any tax breaks...the others are positive before tax breaks. Total purchase value was about 470k (including stamps & LMI). Now worth about $845k. A 375 equity increase of 80% increase in 3.5 years.
So that leaves with only 20k after these expenses....some of inner city properties in Sydney cost me even more. Though they have tripled in some instances in 10 years.
I have a friend with a 650k unit in a bluechip Sydney suburbs he is really crying, he only gets 550pw in rent. Strata is about 4k.....rates another 1k....water $650....Management $2k.....insurance $350....repairs about $1500 (tradesmen over quote as they think he is rich). So $9.5 gone just on fees...
His mortgage is about 500k.....about 38k per year. The growth has been ordinary at about 60k over the last 3-4 years he has held it.
The ones I bought in Melbourne 3.5 years ago are fantatic they are now returning between 8.2% and 9.8% gross. One is neutrally geared before any tax breaks...the others are positive before tax breaks. Total purchase value was about 470k (including stamps & LMI). Now worth about $845k. A 375 equity increase of 80% increase in 3.5 years.
Hrm, I missed this thread.
We're completely between everything at the moment and haven't even been given a figure we *can* rent the spare house at, since we're not allowed to set our own rental amount. Also don't have a date we can rent it out from, and don't have a separate rates/notice for the other house so it is going to be absolute hell trying to do taxes with two houses on the one rates/water notice. So, sitting ... waiting.
New house arrives in 4 days ... I'm expecting the rent from the old house to exactly equal the payments for the new house, so we'll be positive but overall our financial situation will be down by the rates etc on the second house - so $100pw for the difference on the PPoR and $1500 a year for rates/insurance/water, assuming they ever give us a second rates notice, which they had better do or all the powers that be are missing out on being paid.
I can live with that kind of expense to sit in a fancy schmancy brand new house.
We're completely between everything at the moment and haven't even been given a figure we *can* rent the spare house at, since we're not allowed to set our own rental amount. Also don't have a date we can rent it out from, and don't have a separate rates/notice for the other house so it is going to be absolute hell trying to do taxes with two houses on the one rates/water notice. So, sitting ... waiting.
New house arrives in 4 days ... I'm expecting the rent from the old house to exactly equal the payments for the new house, so we'll be positive but overall our financial situation will be down by the rates etc on the second house - so $100pw for the difference on the PPoR and $1500 a year for rates/insurance/water, assuming they ever give us a second rates notice, which they had better do or all the powers that be are missing out on being paid.
I can live with that kind of expense to sit in a fancy schmancy brand new house.
I am negatively geared by about $1000/year at the moment (after tax).
When I purchased this townhouse 2 years ago, it was slightly positive to neutral cash flow.
But interest rates have come up a bit since then pushing it negative (even despite rental increases).
Looking forward to interest rates coming down in the near future!
When I purchased this townhouse 2 years ago, it was slightly positive to neutral cash flow.
But interest rates have come up a bit since then pushing it negative (even despite rental increases).
Looking forward to interest rates coming down in the near future!
So a $20 / week increase will take care of that for you, hopefully very soon !
In the 2010 - 2011 financial year it cost me $158 per fortnight to hold. Total $3,792 pa.
The scale that you have chosen for your poll is rather depressing sash.
Stopping at 40K +ve is rather indicative of what most investors can / could hope for when economically dealing with the twin ravages of both residential Tenants and Govt depts.
One fully owned 500K tiny little office or factory would put an investor in the top category.
Shoot higher would be my suggestion.
Stopping at 40K +ve is rather indicative of what most investors can / could hope for when economically dealing with the twin ravages of both residential Tenants and Govt depts.
One fully owned 500K tiny little office or factory would put an investor in the top category.
Shoot higher would be my suggestion.
I have only managed about $500-$1000 cash flow positive in the last 2-3 months. Hope to change that to $3k plus CF+ when I have rented out some of my vacancies.
Another GFC with rates at 5% should take my CF+ to 70k+ per annum...that should insulate me from a job loss.....
Dazz you stategy is high risk....I prefer low risk resi!
Another GFC with rates at 5% should take my CF+ to 70k+ per annum...that should insulate me from a job loss.....
Dazz you stategy is high risk....I prefer low risk resi!
The scale that you have chosen for your poll is rather depressing sash.
Stopping at 40K +ve is rather indicative of what most investors can / could hope for when economically dealing with the twin ravages of both residential Tenants and Govt depts.
One fully owned 500K tiny little office or factory would put an investor in the top category.
Shoot higher would be my suggestion.
The returns are potentially very big, and they have great tax advantages (i'm not just talking negative gearing but also CGT advantages).
But residential property is a very long term game, all the 'traditional' books on residential investing talked about the requirement to see through two cycles in order to really reap the benefits. Now assuming each cycle is around 10 years thats a 20 year viewpoint. None of these traditional residential investing books talk about 0-130 properties in 10 minutes. But rather to accumulate slowly as both equity and salary rise. If equity is not rising, then one has to be more patient.
You are a smart guy HomePage, your non-residential posts are very intelligent, but i feel your commentary on residential property is geared far to much to the short term.
By 2025 those with current exposure to residential property will be feeling pretty chuffed with themselves.
Individual choice - 12 years property investor
Shouldn't IP cash flow be geared to one's self risk, what are you comfortable with and your current situation in your portfolio? If you are in accumulation phase perhaps some negative gearing is ok. If in defined phase than a neutral or more postive cashflow would be warranted. Very individual choice. Also, in terms of price doesn't mean much if not considered in overall money terms.
The main question would be what is the goal? I know in my scenario it's passive income to surpass my expenses so then I will escape the rat race and live by the true choices in my life.
Eventually, once you stop borrowing, lock into a rate, and rents keep increasing, then the cashflow will become positive....there's food for thought!
Shouldn't IP cash flow be geared to one's self risk, what are you comfortable with and your current situation in your portfolio? If you are in accumulation phase perhaps some negative gearing is ok. If in defined phase than a neutral or more postive cashflow would be warranted. Very individual choice. Also, in terms of price doesn't mean much if not considered in overall money terms.
The main question would be what is the goal? I know in my scenario it's passive income to surpass my expenses so then I will escape the rat race and live by the true choices in my life.
Eventually, once you stop borrowing, lock into a rate, and rents keep increasing, then the cashflow will become positive....there's food for thought!
