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Hi all, After lots of discussion I thought this thread could go as far as it could, now I find that Steve and I have reached some common ground. Kev, I interpret long term as 10-20 years or longer, I thought I made that clear in my example going back 22 years. In regard of the $80,000 out...

Hi all, As this thread has probably gone as far as it can I'll conclude with a few salient (I feel) points. 1/ No-one has come up with any examples to disprove my claim that using an annuity as a standalone strategy for purchasing property is a LOSING strategy over the LONG TERM. 2/...

Hi all, Welldone yeslist, I have no dispute that the how the concept has worked over the last couple of years. Despite being labelled a cashbond basher, and not having a clue I have made statements like the following in earlier posts "Yes I am one of those cynics, I don't know that the...

Hi all, Firstly a big THANKYOU to Steve for his input to this thread as it has made me have a reality check. And NO I still don't like the numbers. As everyone else seems to like summarising my position I thought I would have a go at it myself. 1/ Every investor likes to think they...

Hi all, Steve, I'd love to answer your question to me, but want just a little more information, like the price,purchase costs, rental return, property management fees, rates, insurance and vacancy. Thanks. That way I can work out the real growth rate needed. "A $44,000 property would need...

Thanks for that brains, I too have had PM's of support, and have noticed that the number of hits to this thread has been rising rapidly in the last few days, without many commenting. Steve, thanks for the quick reply, however the question was not fully answered, maybe I didn't ask it...

Hi all, I'll bite!! Tibor, No arguments from me about borrowing against equity for funding annuity in retirement, sounds like a fair strategy. I also have no dispute whatsoever about the effectiveness of using ANY method to purchase "good" property over the last 5-6 years. My...

Hi Mikhaila, Firstly congratulations on your new purchase. Did you use Steves cashbond to fund it? Let's look at a couple of points you bring up. At the purchase of our property in 1981 the gross yield was 7.6%. The gross yield of your purchase is 4.9%. The loss that you claim of 1.4%...

Hi Mikhaila, The situation I am discussing involves a particular property in a middle residential suburb of Melbourne. The numbers I used were based on actual house cost, interest rates we paid, and rent levels in the area at the time.( I followed these as I argued with my wife at the time...

Hi all, Interesting how if someone offers an alternative point of view using numbers of an actual example it's BASHING. Steve, it's 22 years too late to suggest I never buy property and 19 years for the second one, and 16 years for the third one etc. Please re-read my post and comment on...

Hi Steve, I have done the numbers! And I still don't like what I see. In your scenario the figure to break even if its a property investment is around 3.5% , because your $138,000 would only buy a $130,000 property given a 106% lend using other equity. Also when I used numbers for...

Hi all, Just wanted to bump this thread for further discussion as I am becoming convinced that over the long term this cashbond strategy can only work in a high growth/ low and dropping interest rate environment. The other proviso is that you need to be cashflow positive. Because we are...

Hi all Kev, In regard to wher I got my figures from, it was your workings on the 220k cashbond and Steve's on using it for the 400k property, so I looked up a possible candidate suburb for high growth(has been in past few years) , that was around the 400k. Even if we assume the banks will...

Just looked up some figures on a growth suburb in Melb to see if they stack up per my cashbond example. Taking Carnegie as the example for about $360k you would get a 2 bed house that needs work if you are lucky. So for $360k +costs+ cheap reno you may get under $400k. However rentals are around...

Duncan I know it would be nice to have the $117k twice, but it doesn't work that way. If you took the $23.5k every year and paid of loan, then return at end of year 5 will only be $561k, less $503k costs. Remember I added the $117k. Of course there are extra interest savings, but the overall...

Hi all (Another not guru response.) Playing with the numbers I still don't see the benifit of the cashbond. eg purchase cashbond cost $220k, purchase prop $400k, total cost $620k. yield of prop(melb-syd) say 4.5% = ~$350PW assume 90% occ, 6% loan and $2500p/a for rates,insur,maint...