a question

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From: H T


folks

I need some property gurus to bounce ideas off.
We have just paid our mortgage off on our principle res (500k+) and I was content to live in that and buy more ip's, however an old house in a (i think) undervalued suburb in melb has come up that I can see big up side on, simple because of the land size and the presentation of the property. We would need to borrow 300k to fund this little adventure but we can rip through that loan quickly as we both have big incomes.

This house can be lived in but needs a solid 150k to bring back to its former glory.
we have 4 ips with a bit of equity (200) in them.
we are in our early/mid 30's

My question is to you guys would you
- concentrate on further ip's 'cause of the potential tax (we dont mind neg gearing) benefits
- go with the big land own home thing where I can see potential to maybe subdivide or just have a nice victorian home on a nice big block - an increasingly rare site.

HT
 
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Reply: 1
From: Michael Yardney


HT
You are now asking a question about balancing lifestyle and investments.
You obviously have accumulated a number of investments at an early age, more than most Australians will accumulate when they retire.
Sure that new equity in your home will allow you to buy a few more investments, and your current home is obviously not a hovel, but why shouldn't you buy the new one and do it up?
Firstly this should be your little treat to yourselves for achieving so much at this early stage in your life. I always like to get myself a little "trophy" or reward after each successful deal.
Secondly I don't fully agree with Robert Kiawasaki and others that your home is a liability and not an investment. If you use the extra equity you build up in your home wisely, for example to borrow against and buy investments, that can't be bad can it? So if this new property could be a desirable home with a development twist, why not go for it?
Finally what's the use of building up all that wealth if you can't enjoy it. You deserve a nice new home on a big block of land (and that Mercedes in the drive -GO FOR IT!
Michael Yardney
Metropole Properties
 
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Reply: 1.1
From: H T


thanks Michael

I guess I'm so keen to get out of the rat race that I lose site of the fact that we're only relatively young and have accumulated a reasonable amount of investments already.

I suppose it will slow down our overall strategy but if you buy well in a good location for your own property, there's allot to be said for the tax free gain you get on the sale. It was robert k.'s thinking that makes me think that your own home is not a great investment. The book "the millionaire next door" is a great read to - about the perception that people have about millionars is false, many have humble life styles and live in middle class neighbourhoods.
I still subscribe to the NO NON-DEDUCTABLE debt attitude, hell my mode of transport is a VH commodore worth about 3k.

I like this phrase - so much so i might start using it as a sig....not that it applies to me!

"Big hat, no cattle"

HT
 
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Reply: 1.1.1
From: Duncan M


>"Big hat, no cattle"

Hahaha..

Where did this quote come from?

Dunc.
 
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Reply: 1.1.1.1
From: H T


from a must read for all apprentice millionaires, "the millionaire next door"
I think in reference to texans who drive the big car and own the big house but dont have no oil well/cattle

HT
 
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Reply: 1.1.1.1.1
From: Mark Laszczuk


Here's my idea for a signature (it relates to my situation): 'no hat, some cattle'. As my investments grow, so will the signature. One day it'll read: 'big hat, s..tloads of cattle'.

'no hat, some cattle'
Mark
 
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