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From: Mike .


Can it still be done?
From: Judy
Date: 15 Jan 2001
Time: 19:34:17

I would like to hear from anyone who started investing using Jan's blueprint in the 1990's. I am receiving conflicting information that it did work in the 70's and 80's but is not anywhere near as viable in the 90's. Would be interested to know the experiences of those who have started relatively recently.

Cheers for the help. Judy
 
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Santa Clause

Reply: 1
From: Mike .


Re: Can it still be done?
From: Santa Clause
Date: 16 Jan 2001
Time: 09:29:06

I bought my first investment property in late 1993 after reading Jan's book. By 1998 I had comfortably reached the net $1m mark. I have had a couple of setbacks, but the stuff is not rocket science and it works. Still. 'wrapping' and those supposedly new concepts are variants on the theme, and have their place, but the basic 'Somers/Johnson' strategy is to my mind still the best.
 
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Michael Croft

Reply: 1.1
From: Mike .


Yes Judy there is a Santa Claus!
From: Michael Croft
Date: 16 Jan 2001
Time: 06:08:53

I started playing with property in the early 80's. Made many many mistakes and made money. Started getting serious when interest rates hit the high teens, was still making money and mistakes, net worth increased. Early 90's bought, renovated and sold more, mid 90's bought and held, late 90's combined the two (buy renovate and hold) made more money this way (cashflow positive and cap gains). Year 2000 made best cap gains ever and rents are on the up and up. Year 2001 is looking even better.

In short there is no time like the present!, do it now! and other such cliches BUT do your research!! I have lost many hundreds of thousands of dollars (perhaps even millions if I count opportunity cost) along the way because of lack of research but momentum got me through. So read, read and read, go to seminars, visit this forum(and others) and learn. You will be in the distinct minority if you do.

Further to the above we are in lending nirvana at the moment (well almost I went through the 80's), interest rates are low and possibly coming down and lending criteria are fairly flexible.

Anyway a lot of the time (if not all) its a mind set, so good luck. Forgot to mention that I did this in Canberra which is not renowned for cap gain but I've averaged over 10% on all properties.

Michael
 
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Paul D

Reply: 1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: Paul D
Date: 16 Jan 2001
Time: 11:24:21

Hi guys, Indeed we started to follow Jans advice back in 1997 and exclusively investing in Canberra mainly because we live here and like the place. On any Saturday we can do a 40 minute drive and check all 6 properties. We have built a good working knowledge of local values, we have an excellent local agent and despite the knockers we are now looking for IP7 in Canberra. We are achieving good returns on the basis of Jans buy and keep strategy.

While we have looked in the direction of Brisbane in recent times, many postings on this forum have me very wary about buying up there at the correct price. Rather than use the 221D option we bit the bullet early and settled for getting a tax return behind time which we feed back into our operating account and monthly rents also feed into this same account and we rarely have to supplement this.

I have been to many different seminars offering property all over Australia and continue to be amazed by the bagging they give Canberra as an investment destination, clearly they can not manipulate the sale prices as readily as in other states to provide their mega fees.
 
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Sim

Reply: 1.1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: Sim'
Date: 16 Jan 2001
Time: 17:19:33

I tend to agree with your comments about the media bagging places like Canberra... they do it to Adelaide as well.

I saw a suburb-by-suburb breakdown of median house sale prices in Adelaide on the weekend, and there are some suburbs that have had nearly 40% capital gains in the 12 months to December 2000. There are also quite a few that have had 10-20% gains. Of course, as with all statistics you need to take into account the sample size and other obvious traps... but I get a bit annoyed when people look at a city as a whole and say "the city is a hole" ;-)

Especially when you get such good rental returns too !!

It just pays to know your local market really well.

Keep up the good work ! Sim'
 
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The Wife

Reply: 1.1.1.1.1
From: Mike .


I'm so ashamed.......
From: The Wife
Date: 16 Jan 2001
Time: 17:47:03

Yep....that's me, I'm one of the people who doesn't like to buy in Canberra, and you know, I know people here who are doing really well with property.

Don't get me wrong, I LOVE Canberra , I think it's gods country! Beautiful place....I just can't seem to get a good deal here.

I think it all started when a Real Estate agent threw me out the front door of his shop and called the police....heck, I was just trying to get a good price?

And then there's the one who spat on me and faxed all the other agents in Canberra telling them not to deal with me....I was just trying to haggle for goodness sake?

I'm 5'1" why do they cringe when they see me coming?

I've decided that Canberra agents just don't like to see me get a bargain, and they have all ganged up on me. Well I'm not going to buy in Canberra, so THERE!

I'm sure they will miss me.....not....
 
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Bob

Reply: 1.1.1.1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: Bob
Date: 17 Jan 2001
Time: 07:46:06

Nice to hear - I can't seem to do better than Canberra, especially when the tax advantages of non-freehold purchase are taken into account.

Speaking of which, could you email me regarding an accountant, if you've got a good one? quiggles@cyberone.com.au
 
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Alston

Reply: 1.1.1.1.1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: Alston
Date: 17 Jan 2001
Time: 14:56:50

Bob

You write "... especially when the tax advantages of non-freehold purchase are taken into account."

Can you please explain these tax advantages over the normal tax aspects of IP's.
 
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Bob

Reply: 1.1.1.1.1.1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: Bob
Date: 18 Jan 2001
Time: 17:04:44

Sure. In Canberra, the land you buy isn't freehold - it's a 99-year lease (I'm not planning to live that long, so it doesn't make any difference to me.) But since it's a lease that you're acquiring, stamp duty and all the legals are deductible in the year of "purchase". So if you're like me and on the top marginal tax rate, you get half of it back at the end of the year. Even if (like me you close the deal on 29 June). Pretty neat really.

I've heard the same applies in NT, but I don't know.
 
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PaulD

Reply: 1.1.1.1.1.1.1.1.1
From: Mike .


Re: Yes Judy there is a Santa Claus!
From: PaulD.again
Remote Name: 203.54.251.190
Date: 19 Jan 2001
Time: 11:50:20

Hi all, We had an interesting situation with stamp duty in Canberra this year. Our new unit was due for completion around 30 June, stamp duty was paid in May, the unit was not finished until the new financial year.

I spoke to ATO and said can I claim the stamp duty before I have actually earned income on the unit. The first ATO person who was in Sydney did not know about S/D being deductible - great start!

Anyway found someone who did know, subsequently claimed S/D in the year payment occurred before we had even settled on the unit. Moral of the story: when talking to ATO check, check and re-check, and ask them what State they are answering the phone in. Cheers
 
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