Why do you feel the need to apologise? I wouldn't. You had valid points in your first posts. Keep doing what works for you. Some here find it as a personal attack for some reason i cant figure out.
crisis - i've cracked
- Thread starter lizzie
- Start date
Why do you feel the need to apologise? I wouldn't. You had valid points in your first posts. Keep doing what works for you. Some here find it as a personal attack for some reason i cant figure out.
have considered many things.
property has been very kind and generous to us in the past so if we sold out of all the ips and just reno'd the house and continued paying into super at the rate we are ... by the time hubby retires, and we downsized the house as the kids would've all left, we'd have over $2mil at our fingertips.
even invested at a lousy 5% means we'd have an income of $100,000/yr - tempting.
however, super can't be accessed for another 17 years - and $100,000/yr won't be as much as it is nowadays - so do we really want to wait 17 years before retiring? not if we can do it in 8 (or less)!
besides - making $100k a year (tax free) while be a stay at home mum is also very tempting ...
People with different investing styles don't always agree (hence why they have different investing styles). If Conic gets to where she wants to be by saving and investing in high-yield stuff that's great. Traders would think us buy and holders are a bunch of idiots for just adding to our positions. That's fine too. As long as we all get to where we want to be, who cares.
I still believe that the plan that has the greatest probability of success is the one you believe in and apply over the long term. I wouldn't succeed at just saving and going for high yield products because I would always 'think' that leveraging gives better returns, so I would be unlikely to stick to a save / high yield strategy. Just like I wouldn't succeed at trading because I don't believe I will succeed at trading. On the other hand, a person who doesn't believe in buy and hold for property will get nervous when prices fall (and sell) or think it's overshot when it goes up (and sell). Either way, they won't be applying the buy and hold principle, and so won't be successful at it.
Applied consistently, a lot of strategies work. The question is, which one do you believe in enough to apply for decades?
Alex
I still believe that the plan that has the greatest probability of success is the one you believe in and apply over the long term. I wouldn't succeed at just saving and going for high yield products because I would always 'think' that leveraging gives better returns, so I would be unlikely to stick to a save / high yield strategy. Just like I wouldn't succeed at trading because I don't believe I will succeed at trading. On the other hand, a person who doesn't believe in buy and hold for property will get nervous when prices fall (and sell) or think it's overshot when it goes up (and sell). Either way, they won't be applying the buy and hold principle, and so won't be successful at it.
Applied consistently, a lot of strategies work. The question is, which one do you believe in enough to apply for decades?
Alex
I guess it depends a lot on the context. If it's somebody being a smart-*** and saying "get over it, it's only money", I'd agree that's not very helpful - especially when it's only your money, not theirs!
If it's my Mum giving me a hug and a Kleenex and saying "never mind, we're all healthy and once we've got this sorted out, it'll be past and life will be much brighter", it does make me feel much better. But perhaps that's just me...
Agree Trace,
but some people are just not good at hearing that sort of comment after a bad event, no matter how it's said. Better to say nothing maybe.
It's all in the outlook of the person who is the victim of course.
That's why so few do it, and so many of us are overly critical of bleeding heart renters who think we're stiffing them.
Unfortunately, mistakes; and we've all made 'em, can be VERY expensive, but the alternative is to do nothing and stick it all in the Bank. LOL
The correct outlook to have, of course, is that if it was so easy, then why isn't everyone doing it.
I actually prefer it to be a bit tougher than simply shelling out for the good old Mutual Funds.
e can leverage to blazes, and the returns are good if you stcik at it.
Just don't tell everyone.
LAA, You should say 'one alternative'. There are lots of ways to make money, especially with money.
FWIW...i only buy IPs when the general market looks for a decent upswing and and when the gross yields are at least neutral. Which wont be for a couple years yet. I just cant stand pumping money in assets going backward regardless of tax benefits.
Its not the most popular way to invest in property because a lot of investors think they have to buy all the time. When its just as important to know when not to buy.
FWIW...i only buy IPs when the general market looks for a decent upswing and and when the gross yields are at least neutral. Which wont be for a couple years yet. I just cant stand pumping money in assets going backward regardless of tax benefits.
Its not the most popular way to invest in property because a lot of investors think they have to buy all the time. When its just as important to know when not to buy.
Unfortunately, mistakes; and we've all made 'em, can be VERY expensive, but the alternative is to do nothing and stick it all in the Bank. LOL
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I'm a "never seller", but there has to be fun at the back of this caper, and if you have made some decent profits, but due to the current predicament the fun has gone out of it, then selling up, taking the profit, paying the necessary taxes/costs etc and sitting back with a marguerita on the balcony for a spell is a good thing.
With your knowledge, you can do it all again next year after a little rest, and do it better.
QUOTE L.AAussie;I'm a "never seller", but there has to be fun at the back of this caper, and if you have made some decent profits, but due to the current predicament the fun has gone out of it, then selling up, taking the profit, paying the necessary taxes/costs etc and sitting back with a marguerita on the balcony for a spell is a good thing.
Live to fight another day ... sound advice
Live to fight another day ... sound advice
Hi Lizzie
Could you elaborate on what type of trust structure you have as I am about to set one up for the first time, currently our properties are held in joint names and everything we buy from now on we want to have in the right tax vehicle.
I have Dales book on trust magic and it seems to be the best thing to do, however it seems quite complicated in some areas also.
How has the trust structure let you down and what can you do to rectify it?
best of luck
kind regards
dags
Could you elaborate on what type of trust structure you have as I am about to set one up for the first time, currently our properties are held in joint names and everything we buy from now on we want to have in the right tax vehicle.
I have Dales book on trust magic and it seems to be the best thing to do, however it seems quite complicated in some areas also.
How has the trust structure let you down and what can you do to rectify it?
best of luck
kind regards
dags
Is selling out half or so an option? Lighten the load a bit, but still have something on the go? You've got some heavy carry costs there, and have had for a while from the sounds of it. Perhaps gone in a touch harder (LVR etc) than desireable (I wouldn't solely blame structure)? Easy to know now!
Alternatively, if build/subdivide cheapies provides good cashflow, and from the sounds of it you may have done it before and not found it stressfull, why not stick with doing that?
Alternatively, if build/subdivide cheapies provides good cashflow, and from the sounds of it you may have done it before and not found it stressfull, why not stick with doing that?
Lisa: 'You know dad, the Chinese use the same word for crisis and opportunity'
Homer: 'Yeah I know! Crisitunity!'
Mark
Homer: 'Yeah I know! Crisitunity!'
Mark
When life throws curveballs at us Lizzie, people seem to split into two different groups:
- those that knuckle down and get things done
- those that give up
I'm pretty sure I know which type of person you are.
Do you?
Donald Trump was able to take a multi-billion dollar problem and turn it into a huge success. Imagine how he felt at the time!
Mark
- those that knuckle down and get things done
- those that give up
I'm pretty sure I know which type of person you are.
Do you?
Donald Trump was able to take a multi-billion dollar problem and turn it into a huge success. Imagine how he felt at the time!
Mark
the major problem properties were the ones held in a family trust because we couldn't access any losses to claim against other income. i think part of the reason why we put the properties in the trust on the accountants recommendation was that we bought in a boom time and expected the good times to last a little longer.
well, they lasted about 6 months longer!
the reason we really came unstuck was that we have been funding a portion of the losses (as the bills, mortgages, taxes still have to be paid) out of a loc against our ppor. one word - compounding! a dangerous word.
unfortunately the cg of the ip's hasn't kept up with the losses and compounding.
cashflow, or the lack of it, is what will drag us under so we have bitten the bullet and decided that everything must go to reduce our debt significantly and hence improve the cashflow.
the value of the development site - which was a big ask to have to sell and hurts like buggery - has increased by 50% on what we paid for it 6 months ago, purely thru a good buy and da approval.
after all the other ip's are sold, selling the development site will further halve the remain debt and make a huge difference to our cashflow, will allow us to get rid of the remainding debt on the ppor very quickly and pay for reno's.
a big decider was also that our ppor is currently worth around $1.2mil - bought 14months ago for $1mil.
if we finished the renovations, which will cost around $70-80,000, the house will then be worth closer to $2mil. so we are better off selling everything, putting our cash into the renovation and downsizing in 2-3 years when the older kids have all left home - we should have no debt so can take all the tax free profit and investing then.
yes, we have done a couple of cheapie subdivisions in the past ... but the "secret" is to sell the older house and keep the new one.
but if we don't sell the ip's - then everything will get sucked under very quickly. renovations unfinished (which will decrease the value) ppor included.
well, they lasted about 6 months longer!
the reason we really came unstuck was that we have been funding a portion of the losses (as the bills, mortgages, taxes still have to be paid) out of a loc against our ppor. one word - compounding! a dangerous word.
unfortunately the cg of the ip's hasn't kept up with the losses and compounding.
cashflow, or the lack of it, is what will drag us under so we have bitten the bullet and decided that everything must go to reduce our debt significantly and hence improve the cashflow.
the value of the development site - which was a big ask to have to sell and hurts like buggery - has increased by 50% on what we paid for it 6 months ago, purely thru a good buy and da approval.
after all the other ip's are sold, selling the development site will further halve the remain debt and make a huge difference to our cashflow, will allow us to get rid of the remainding debt on the ppor very quickly and pay for reno's.
a big decider was also that our ppor is currently worth around $1.2mil - bought 14months ago for $1mil.
if we finished the renovations, which will cost around $70-80,000, the house will then be worth closer to $2mil. so we are better off selling everything, putting our cash into the renovation and downsizing in 2-3 years when the older kids have all left home - we should have no debt so can take all the tax free profit and investing then.
yes, we have done a couple of cheapie subdivisions in the past ... but the "secret" is to sell the older house and keep the new one.
but if we don't sell the ip's - then everything will get sucked under very quickly. renovations unfinished (which will decrease the value) ppor included.
You have a good head on your shoulders Lizzie (as I suspected). Good luck in the future with all of your endeavours. As the saying goes 'Sometimes you have to take a few steps back in order to move forward'.
Mark
Mark
Not at all offended, just curious as to what you are doing on a property forum, if you are quite comfortable with your current situation & suggesting that others sell all properties & save.
They don't, actually. You can't split characters like that and interpret them separately. Characters have different meanings when used as a phrase and when used separately. In any case, the word crisis is made up of 'danger' and 'change'. By itself the 'change' bit is neutral.
Opportunity is the second character PLUS another character.
Alex
i hope i'm the "knuckle down", make the hard decisions and move forward type.
believe me, i ain't giving up on property - just taking a short side trip for a bathroom break and feed to make the journey more comfortable!
i finished reading donald trump "art of the deal" last week. great read!! i would love a part II for 1986 onwards. that man had some serious gumption - but i feel he also had some serious cashflow and funds behind him to start with - even though he doesn't specify such.
Hi Lizzie
Do you need to sell all of your ips or is there point at which it turns from negatie to postive due to debt reduction and you can hold at that point? Or are you aslo focusing on reducing debt on PPOR and therefore sell all? With CGT is it worth spreading it over two financial years or will the looses you carry mop up the capital gains?
Do you need to sell all of your ips or is there point at which it turns from negatie to postive due to debt reduction and you can hold at that point? Or are you aslo focusing on reducing debt on PPOR and therefore sell all? With CGT is it worth spreading it over two financial years or will the looses you carry mop up the capital gains?
