Hi All
I discovered this forum only a couple of days ago and have literally been stuck to my monitor absorbing the wealth of information here. Prior to finding a reference to the forum in Michael Yardney's book, I had a number of investment property questions. Reading his book and browsing these forums has taught me a lot, but in terms of satisfying my previous curiosities, I am more confused than ever. If anyone could shed some light, I would be very grateful.
As a bit of a backgrounder, I am in my mid 20s and have been working on developing the family's property portfolio over the past three years (I know, not the best time). My parents have a PPOR, but everything else has been acquired in the past three years by me (often with their financial help). Like most uninformed novices, I focussed immediately on CF properties. I had previously heard opinions similar to Yardney's about CG, but I could never internally justify them. After reading this forum, I have seen numerous posts with similar sentiment.
So, my main issue is with the distinction of CF and CG properties. Yardney shows a number of calculations and tables, but looking at the market, it doesn't seem so clear cut (of course). I just don't seem to be able to accept the idea in Yardney's book that CF properties simply have a higher portion of their return in CF. In an example, he proposes a CG property of 14% may have a CG of 10% and CF of 4%, then the inverse for a CF property. That would mean the CF property would grow to the point that the CF would be huge. Imagine finding an IP now for $300k that had a $2k per week CF?
Where I have the most trouble with this, is in practical situations. Right now I can buy an inner city property with two dwellings which provide a combined high CF. Is that classified a CF property to the majority of people? Do CG people think that will have a lower CG than the one next door with a single dwelling (obviously cheaper and lower CF)? I realise these are just terms and theories, but I think it would help me digest these theories if I knew what a CF and CG property were. If I had minimal equity, I would probably lean more towards these CF properties with a good CG potential. But with a bit of equity now, I'm torn between focussing solely on CG or a combination of CG and CF.
Lastly, I understand the more seasoned investors would recommend devising my own theories, but I think I'm stuck in that void where I can disagree with others, but don't have enough experience to back my theories up!
Many thanks
I discovered this forum only a couple of days ago and have literally been stuck to my monitor absorbing the wealth of information here. Prior to finding a reference to the forum in Michael Yardney's book, I had a number of investment property questions. Reading his book and browsing these forums has taught me a lot, but in terms of satisfying my previous curiosities, I am more confused than ever. If anyone could shed some light, I would be very grateful.
As a bit of a backgrounder, I am in my mid 20s and have been working on developing the family's property portfolio over the past three years (I know, not the best time). My parents have a PPOR, but everything else has been acquired in the past three years by me (often with their financial help). Like most uninformed novices, I focussed immediately on CF properties. I had previously heard opinions similar to Yardney's about CG, but I could never internally justify them. After reading this forum, I have seen numerous posts with similar sentiment.
So, my main issue is with the distinction of CF and CG properties. Yardney shows a number of calculations and tables, but looking at the market, it doesn't seem so clear cut (of course). I just don't seem to be able to accept the idea in Yardney's book that CF properties simply have a higher portion of their return in CF. In an example, he proposes a CG property of 14% may have a CG of 10% and CF of 4%, then the inverse for a CF property. That would mean the CF property would grow to the point that the CF would be huge. Imagine finding an IP now for $300k that had a $2k per week CF?
Where I have the most trouble with this, is in practical situations. Right now I can buy an inner city property with two dwellings which provide a combined high CF. Is that classified a CF property to the majority of people? Do CG people think that will have a lower CG than the one next door with a single dwelling (obviously cheaper and lower CF)? I realise these are just terms and theories, but I think it would help me digest these theories if I knew what a CF and CG property were. If I had minimal equity, I would probably lean more towards these CF properties with a good CG potential. But with a bit of equity now, I'm torn between focussing solely on CG or a combination of CG and CF.
Lastly, I understand the more seasoned investors would recommend devising my own theories, but I think I'm stuck in that void where I can disagree with others, but don't have enough experience to back my theories up!
Many thanks