Are you a Yardney or a Lomas?

[Piston Broke]

I think of property as a long term investment so for me it's at least 30 years or even more, never to sell. You seemed to have a bad experience but for me personally the last 10-12 years have generated over $1mill in equity. I am not sure where the 90% statistic comes from but most would say the last 10-12 years had positive effects on property in Australia.

You didn't read my post which said "last few years". 10-12 is more than a few years.
OK I get it, you want to come here and brag about your paper profits (you will one day have) which you can't cash in for another 10 yrs. Or do you just want to play "my willy is bigger than yours".

No one is a guru or an expert but some succeed while others don't, don't you think?

Not at all, I just haven't seen many on API, YIP, with their names on books or doing seminars.
If wealth (10mil+) obtained mainly by buying/selling/developing is the criteria, then I seem to know a few.

Somehow I do not think you even read the article, did you? Well that's up to you but at least I am always open to any new information, how else are we to learn and achive?

There is no new information about the continually rehashed CG vs income argument, I could hold a 3 hour seminar on it.
Stuart is just writing articles and blogging to promote his book, like others there, who rely on the endless supply of people who want to get rich and buying the "dream".
They need an "expert" to tell them what they want to hear so that they can justify it to themselves.

Learing on past bad experiences is the way, and yes no one has a crystal ball so education is the key and I would add a positive mindest too.

Actually i think my crystal ball works much better than those who write on API and YIP, including the editor and writers who have trouble with basic maths.

 

[redwing]

Ok .. I'm a bit of 'newbie' myself, and reading this makes me very excited.. wish I had the guts, know-how, and $$ to follow through with a strategy like this... one day... soon ... i hope!!

I think Ausprop has a post within the forum that may temper that strategy with a dose of caution also. No danger, just caution with regards to the numbers and expectations

 

[mattnz]

I think Ausprop has a post within the forum that may temper that strategy with a dose of caution also. No danger, just caution with regards to the numbers and expectations

You just need the right market, where you have strong returns like 30-40% profit on costs and reasonable amounts of capital behind you (like $150-$200k). I'm currently doing exactly this.

 

[MIW]

You didn't read my post which said "last few years". 10-12 is more than a few years.
OK I get it, you want to come here and brag about your paper profits (you will one day have) which you can't cash in for another 10 yrs. Or do you just want to play "my willy is bigger than yours".

Since when is a property investing a few years game? To me it's about compound growth (opportunity window, of say 40 years between working age from 20 to 60 years). My start was in 2000 that's all. Why would I cash my profits as they generate positive cash flow now? Anyway, I try to share only my experience and I don't mean to brag. If I did then I appologise.

Not at all, I just haven't seen many on API, YIP, with their names on books or doing seminars.
If wealth (10mil+) obtained mainly by buying/selling/developing is the criteria, then I seem to know a few..

Why do you assume everybody wants to write a book or do seminars, some are just content with what they do, some may wish to share how they did it, and others may become fully involved to profit along.
I buy the magazines for motivation, inspiration and information as it works for me.

There is no new information about the continually rehashed CG vs income argument, I could hold a 3 hour seminar on it.
Stuart is just writing articles and blogging to promote his book, like others there, who rely on the endless supply of people who want to get rich and buying the "dream".
They need an "expert" to tell them what they want to hear so that they can justify it to themselves.
..

You know my good friend many years ago said something along the similar lines. That when I buy their book I profit them. Well my answer was, that as long as I learn something new, even if it's one thing, and I apply it to my life to make it better, well then I do not care.
That "dream" is so important as that's what keeps me going. Most inventions we now use would have to come from dreams first, from the minds who dreamed BIG!
I look at the materials or experts as mentors who have done it before so I try to learn and apply that as I do not wish to reinvent the wheel.

Actually i think my crystal ball works much better than those who write on API and YIP, including the editor and writers who have trouble with basic maths.

So after all you do have a sence of humor...I like that. I can see that you are not a follower whereas I am.

 

[mrmonopoly]

Another dirty little secret re depreciation: while it is nice to get tax benefits up front, the cost base is adjusted on the sale of the asset, which means that you pay more capital gains tax. This why cashflow analysis is important.

IF you sell. If you don't sell you dont incur any CGT. Even if you do sell then you can still apply the basic principle of a dollar being worth more today than tomorrow etc.

 

[--(< PJ >)--]

I've been reading this site for a few years now, had a PPoR for many years and an IP for 3 years.

Two of the peoples commentary I read are Mr Yardney and Ms Lomas.
I enjoy reading (or viewing) the opinions of both and appreciate what I have been taught, however I cant help but believe that they use fundamentally different strategies.

My gist on Mr Yardney is that a focus on positive cashflow is not such a good idea, its all about buying well located property and having capital growth and improving yields over time.

Ms Lomas appears to be very strong on positive cashflow (I haven't read the recent book yet) and seems to favour lower cost areas with higher yields.

I find myself stuck in the middle, I plan to continue to buy property in more expensive areas for capital growth (i.e. I favour the Yardney method) but I see sense in what Ms Lomas says.

I'd be interested in how others how found the middle ground when developing their own strategy.

Why not both? Have you actually had a look at the 5 and 10yr growth figures of major regional centres (e.g. suburbs in Gladstone and Rockhampton in QLD) and compared them with 'blue chip' suburbs in Capital cities? An average of 12% growth PER YEAR vs 5%... quality regional centres with good critical mass and solid employment growth win over overpriced under yielding capital city suburbs hands down. Bernard Salt wrote a good article in a recent API mag about the risk of baby boomers putting bulk property on the market in inner suburbs of capital cities to help their retirement shortly. While the extent to which this might happy is uncertain, it could get messy if it does.

P.S. I'm thinking about changing my strategy, and taking a short term loss on a property. It's a development site on the side of a hill overlooking the ocean in Yeppoon outside of Rocky. There's a duplex on the block already. While the rent isn't high enough to be positively geared, I think it could grow well in value and yield if it tracks the local economy over the next few years.

 

[Zeddy]

I'm a firm believer that there is a time and a place for everything. Taking a bit from both sides to create a rounded out portfolio.

IPs #1 and #2 were cashflow neutral at purchase. Positive cashflow now.

IP #3/PPoR is cashflow negative, but bought during a downturn in a good suburb. It was bought for $50K less than what the vendor purchased it for 3 years ago.

IPs #1 and #2 continue to provide me good cashflow with reasonable growth, while fingers crossed IP#3 will provide me with higher growth with development potential in future.

 

[Piston Broke]

Since when is a property investing a few years game?

Since reading advertisements for seminars from book writers and those API and YIP articles.

 

[MIW]

Since reading advertisements for seminars from book writers and those API and YIP articles.

Funny! Don't give up though......

 

[Peter 14.7]

Easy - take the best of both worlds.

Only choose properties that will deliver all three criteria of high growth, high yields and do nothing.

Happy days....

Wise the Dazz is.

I don't follow them per say. I have ( or had) a mix of CF- and CF+.

All are CF+ now.

Again you need to ask yourself, what is YOUR strategy.

Do you need CG to buy more prop or do you need CF + to buy more prop. YOU really need a strategy. So many I know say buy and hold but that is not a strategy that is technique. A strategy is a plan attached to a goal.

Think about that before you adopt one or another.

I know Dazz strategy is "buy commercial" because Dazz hates residential leases terms.

Mine was to pay off the PPOR so I went high growth low CF. I sold in 2003, owned PPOR and got down to 1IP but now have grown to a multiples.

Does this make sense?

regards

Peter 14.7

 

[Dazz]

I know Dazz strategy is "buy commercial" because Dazz hates residential leases terms.

Hi Pete,

Not quite. My strategy was chosen because I thought it would deliver high growth, high yield and bugger all to do as a Landlord.

After actually doing it for a wee bit, I can confirm this is exactly what it has delivered.

My earlier, unfounded suspicions.....about there existing something better than what the expert authors ALL warned me off, proved to be correct.

Risky ?? Was at the start. An intelligent investor over the years actually gains tools and techniques for nullifying the risks, learns to adapt and roll with the punches, hones one's skills.....just like other investors do with their chosen sport.

What scared the livin' bejesus out of me at the start (and still scares witless most people) is all taken in the stride nowadays. In fact, it can be turned around such the thing that scares people the most, loss of Tenant, can turn out to be the best opportunity to secure a much higher paying Tenant on a better Lease.

 

[Aaron_C]

Any system where the government tries to intervene/get their hand in it usually turns out to be a bad investment. See Residential Tenancies Act and the Retail Leases Act, the latter of which is not as bad as its residential counterpart but still annoying nonetheless.

 

[Piston Broke]

My earlier, unfounded suspicions.....about there existing something better than what the expert authors ALL warned me off, proved to be correct.

I can relate, just before purchased my "forgotten" IP everybody told me I was crazy and will lose my money. Brokers, bankers, accountants, RIP buy'n'holders were all horrified an "apparent" level headed pragmatic like me confused would buy such a "low quality high risk" property. The seemed so concerned it was concerning.
And yet turned out great, and I learned a whole new game to play.

 

[MIW]

I know Dazz strategy is "buy commercial" because Dazz hates residential leases terms.

I dislike residential lease terms and the hassles attached. With commercial you have less of those, however, I have no knowledge of how I would even go about investing into commercial property.
I have a friend who bought CP in Bowral, quite few years back for $400K and let's it out for about $100K (25% yield). That's a pretty good cashflow investment....

 

[Aaron_C]

I have the luxury of 3 terrace houses that can be rented out as both residential and commercial. Guess which way I'm trying to go now?

 

[agent007]

My strategy is more in line with Margaret Lomas.....I would not have the portfolio size I have without CF.

I agree with what you say about MY. With the MY strategy you will stall after 1-2 properties due to the high holding costs. In times like this CF strategy wins hands down.

Hi Sach,

May I ask what's the gross/net yield across your portfolio?

Thanks

 

[oracle]

Over a long period of time 20+ years both strategies would have worked. The extent of your success would depend on how well you implemented those strategies.

Assuming the overall return (Income+CG) were fairly similar in both strategies over the long term, what would make the biggest difference in the end is tax. You will have more dollars working for you with CG strategy than with Income strategy.

But as you know income is nearly guaranteed while CG is not.

I personally like both strategies as they both have merits. You need to use them at your advantage. 10% return on an average outer suburb property is a good deal so is 20-25% discount for a inner city blue chip property.

Bottom line is you got to learn to identify and pick good deals from the average ones and that is what will ultimately make you successful in a relatively short period.

Cheers,
Oracle.

 

[Africandaisy]

The Lomas school is both capital growth and cashflow. If you are buying property with high cashflow and getting no capital growth, you most likely didn't follow the rest of the Lomas guidelines on selecting the right area and property. How do I know? I am a happy Destiny Financial client working the Lomas method.

Ditto.

I think the Lomas srategy is good for people like me, on moderate incomes, who want to minimise risk.

 

[Piston Broke]

Over a long period of time 20+ years both strategies would have worked.

Any strategy works when there is boom.
Rising tide lifts all boats.

The best secret strategy of the rich and wealthy is to take a German sheperd (this is very important) for a walk, and wherever he pees, buy that house.
It's proven with 100% accuracy.

 

[oracle]

The best secret strategy of the rich and wealthy is to take a German sheperd (this is very important) for a walk, and wherever he pees, buy that house.
It's proven with 100% accuracy.

I tried it, several hundred years ago I bought a house in Babylon for the long term, considered to be the richest city in the world at the time, today it's a desert and my house is gone and no one wants to buy my land. Needless to say I lost all my money.

I thought I might give it a try again. Bought a house in Detroit right where the German sheperd peed, unfortunately after several years the mortgage is still larger than the value of the house.

You got any more strategies for me to try PB??

Cheers,
Oracle.