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From: Mike .


What to do?????
From: Troy S
Date: 8/19/00
Time: 2:42:56 PM

I have a number of questions for the seasoned pros out there. I am currently living in Japan, have no debts about $30,000 in cash. I am an Australian citizen but my income is not taxed in Australia therefore I can not receive any tax advantages (correct me if I am wrong!)

What are some of the best ways for me to invest in real estate in Australia. I will be returning their after a few years and would like to have some IP's before I get back.

I have considered the following.

1) Purchase a high positive cashflow property and forego capital gains. If I can get a property (or 2,3) for $50-60K and rent it for 120-150 pw I could pay off a P & I loan for the entire house in about 5 years. If there is no capital gains I don't see how interest only loan would help. After 5 years I would have a house worth about $50K of which I put in approx. 10-15% (say $8,000). $8k in and then $42 K return in 5 years is pretty reasonable I figure. Am I missing something. These figures are not exact but are they on the right track.

OR

2) Purchase a pricier property say $150K an rent it out for a return of about 6-7% and then hope for some capital gain. In this situation I can see the value more clearly of having an interest only loan. This would be I imagine what most people are doing but most people have an income that they can receive tax benefits (something I can not).

OR

3) Similar to 2 above but go with one of the investment groups such as custodian, investment club, etc to get my first property and some equity and then look at other options.

OR

4) Go in with a partner living in Australia. Maybe difficult. Would have to look at the logistics more carefully.

Am I missing something? What would others suggest? Any help/ideas would be greatly appreciated.

Regards, Troy
 
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Buzz

Reply: 1
From: Mike .


Re: What to do?????
From: Buzz
Date: 8/19/00
Time: 5:19:38 PM

Troy

The biggest problem you will find is having your properties managed correctly, especially a positively geared property, because they usually have a few years on them and require maintenance more frequently. So you will be ripped off in that department, trust me. The result from that will be a positively geared property turned negative very quickly.

Good property managers are out there but are very hard to find. Speaking from personal experience stay away from the investment clubs they will only supply/find negative geared property and never buy negative especially in your situation.

I know there are no real answers here, but hopefully it helps.

Good Investing
 
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