Congratulations Sash! Almost 20 IPs is great!!
Where do you invest? Do you go for CG or yield? Negative, neutral or positive?
Limiting Beliefs about the property journey
- Thread starter MsAli
- Start date
Congratulations Sash! Almost 20 IPs is great!!
Where do you invest? Do you go for CG or yield? Negative, neutral or positive?
I go for a balanced approach.
7% plus growth....7% plus return when I buy. The aim is to get to a 8% plus return in 2-3 years. This has worked for me in most but not all instances.
I invest primarily in the 5 major capitals.
7% plus growth....7% plus return when I buy. The aim is to get to a 8% plus return in 2-3 years. This has worked for me in most but not all instances.
I invest primarily in the 5 major capitals.
Nice! From what I understand besides looking at the past stats, I wasn't sure if you could easily predict 7% growth. Yield can be calculated but how can growth be speculated? Purchasing in capital cities with that sort of rental yield sounds like a good strategy!
Hi MS Ali, just wondering how you are managing this?
A few comments to consider. Please don't think I'm criticising as I fully respect your honesty and openness.
From my perspective it seems you may have a fairly common condition. That is, being attached/addicted to achievement? You have done really well to get going with your investment path but after achieving each property, for some folks, it's never enough? What you have achieved goes stale and it must be replaced with another goal to work toward. What are you reaching for? If you are going to go stale after each achievement then why all this chasing if there is no satisfaction in the present? Achievement is wonderful when it is balanced - and this happens when the attachment to the feeling of it is reduced and you can be satisfied with "what is" whether good or bad.
Thanks for sharing your thoughts.
That's what it is... it is a never ending cycle
trying to change it, but it is a little bit like filling a void.... but then again, I don't want to work for 40 years of my life, so the motivation of becoming financially free keeps us going.Hey Rockstar,
I'm managing this by actively focusing on shifting my subconscious mind by bringing to light what beliefs I have been carrying for so many years. It's amazing how many disempowering beliefs I have discovered within myself and then have consciously worked with that "inner" self to come to terms with what? why? - honouring it and then letting the Universe do it's magic. Not sure if it is making sense...But the closest book that describes the process that I can recommend is "The Seat of the Soul" by Gary Zukav. I have actively invested in my self and spiritual development over the past 5 years. Basically I've focused on "growing up". I believe the majority of the society are stuck in early developmental stages, but once you mature (heal on a deeper subconscious level), you attract much more in your life than you do while you are ignorant, lack empathy or insight into yourself and what you are capable of doing.
A few comments to consider. Please don't think I'm criticising as I fully respect your honesty and openness.
From my perspective it seems you may have a fairly common condition. That is, being attached/addicted to achievement? You have done really well to get going with your investment path but after achieving each property, for some folks, it's never enough? What you have achieved goes stale and it must be replaced with another goal to work toward. What are you reaching for? If you are going to go stale after each achievement then why all this chasing if there is no satisfaction in the present? Achievement is wonderful when it is balanced - and this happens when the attachment to the feeling of it is reduced and you can be satisfied with "what is" whether good or bad
I appreciate your feedback and I don't see it as critical. Yep I relate!! Trust me, I have shifted it SO much. I used to be all about All or Nothing. At least I know I'm enjoying the process
. Goal post does move - all the time - yet to find a balance. I'm not sure when and what will be enough really. But for a change it's good to be aiming high for MY goals rather than goals to get the next promotion, the next pay rise....So much more power in this property journey than in one where the employer is the false God. Thanks for sharing your thoughts.
My pleasure
Completely agree and hope you reach your insights and goals for both mundane and spiritual growth asahp.
Best wishes, RS Completely agree and hope you reach your insights and goals for both mundane and spiritual growth asahp.
Thank you Rockstar
. Why not go for both!..
A couple of great threads by sash
IP portfolio that performs regardless of market movements!
&
Having 6 out of 16 properties vacant!
hi ms Ali
i think it is great you have the properties you have at 26. i myself bought at the age of 22 and was forced to sell it 6 months later as i got retrenched from my 1st job out of university. over the years i have acquired nearly 20+ properties some i have kept but majority sold especially during the boom. i have the belief that cash is king esp in difficult times.
i don't consider myself the average investor and i like to do things out of the square. My parents think i am crazy but i push the limits to what i can do and take the opportunities as they come. i once bought and sold a property in 1.5 months and made "net" 6 figures and then bought another 3 while paying all the interest in advance for 1 year. thinking back it was crazy but i just went for it out of accident by getting an ridiculous offer from an overseas buyer.
i personally feel it is the quality of properties you acquire not just the sake of having 30-50 properties and then and say you are worth a million in equity which is kind of not really with CGT and selling costs. i use a mix of hold, reno, cashflow etc and holding forever with that much debt and no cash to enjoy life is quite hard.
yes it was applicable maybe 10 years ago but nowadays properties are really expensive to what someone would have paid back then.
i personally rather have 1 fully paid property over 5-6 cheaper properties generating the same returns.
as for tradies - dun worry abt them. they will be ones that burnt you and ones that don't. just gotto keep doing and now your building act like your bible.
i think it is great you have the properties you have at 26. i myself bought at the age of 22 and was forced to sell it 6 months later as i got retrenched from my 1st job out of university. over the years i have acquired nearly 20+ properties some i have kept but majority sold especially during the boom. i have the belief that cash is king esp in difficult times.
i don't consider myself the average investor and i like to do things out of the square. My parents think i am crazy but i push the limits to what i can do and take the opportunities as they come. i once bought and sold a property in 1.5 months and made "net" 6 figures and then bought another 3 while paying all the interest in advance for 1 year. thinking back it was crazy but i just went for it out of accident by getting an ridiculous offer from an overseas buyer.
i personally feel it is the quality of properties you acquire not just the sake of having 30-50 properties and then and say you are worth a million in equity which is kind of not really with CGT and selling costs. i use a mix of hold, reno, cashflow etc and holding forever with that much debt and no cash to enjoy life is quite hard.
yes it was applicable maybe 10 years ago but nowadays properties are really expensive to what someone would have paid back then.
i personally rather have 1 fully paid property over 5-6 cheaper properties generating the same returns.
as for tradies - dun worry abt them. they will be ones that burnt you and ones that don't. just gotto keep doing and now your building act like your bible.
Thank you redwing. Wow
Sash has done great. I learnt SO much from his IPs thread. I agree with his 7%+ yield philosophy! That's what we target in Sydney too. Amazing success!!!!Thank you for sharing your story Melbournian. That is awesome!!! So you reckon that 6 figure net is possible every now and again? Or do you need someone like that overseas buyer to do that? Did you do any reno the property? I used to think often overseas buyers (assuming they are not citizens of Australia) need to buy brand new?
Interesting point. Actually I've been torn between whether one should go for 30 or 50 properties and BUY ANYTHING that comes their way. Nathan does that. I like his attitude and open mindedness to it all. However at the same time I wonder, do I have the tolerance level to buy in some of the areas he buys in? I also know he first bought in metro before moving onto regional and now buys purely on numbers. Though again I wonder what is the "sell-ability" if one just buys anything and everything? Great to push the boundaries and hope I can bring a shift in my mindset to keep working on thinking outside the square....still question it.
Agreed
Haha yeh
...Interesting learning experiences hey
The closest to limiting? things I had was the actual learning about 'doing' the investing.
Self confidence and belief to become financially independent was not the problem, (quite a powerful driving force actually), but the tin tacs of the doing.
I was able to research my regional cities, and having lived in them gave me good long term knowledge. The sourcing loans, property managing, insurance, the figures involved all then developed, I learnt what rental return was from my mortgage broker, and that if I kept buying well, getting good returns I was able to keep adding and adding to the portfolio.
So I would say my determination and self belief was a strength that got me into property investing, research took me to deals, and the actual doing after that, making offers, sourcing loans etc was learnt on-the-job. Plus I gained a hell of a lot from Jan Somer's books and also Steve McKnights.
So far, so good. And I enjoy it immensely, it is fun for me.
May you continue to 'learn and do' also.
Self confidence and belief to become financially independent was not the problem, (quite a powerful driving force actually), but the tin tacs of the doing.
I was able to research my regional cities, and having lived in them gave me good long term knowledge. The sourcing loans, property managing, insurance, the figures involved all then developed, I learnt what rental return was from my mortgage broker, and that if I kept buying well, getting good returns I was able to keep adding and adding to the portfolio.
So I would say my determination and self belief was a strength that got me into property investing, research took me to deals, and the actual doing after that, making offers, sourcing loans etc was learnt on-the-job. Plus I gained a hell of a lot from Jan Somer's books and also Steve McKnights.
So far, so good. And I enjoy it immensely, it is fun for me.
May you continue to 'learn and do' also.
Same for me, OO. I "woke up" one day and realised it was "time" to put my foot on the wealth accelerator. The strong desire came first - then the belief - then the positive action. The vehicle was property, the fuel was bank loans, the destination was financial freedom. I've had to make a few gear changes, refuel, burnt out a few tyres, missed a few turns, occasionally looked into the rear view mirror and tighten the seat belt but the motor is still going strong and no road rage encountered as yet! I've met a few fellow travellers along the road who have helped me stay on the right road and am grateful for the journey. Also grateful to be inspired by stories and advice from many SS peers like you.
Love it Rocker. Just love it. Seriously, I feel the luckiest buggar on earth most days. On others I drink skinny lattes.
Hi MsAli,
Nice reading this thread as it's very aspiring.
I'm 28 with similar background as yours and just bought my first PPOR (500k) last year Dec before stamp duty exemption was discontinued.
For the PPOR, I got my parents assistance for the initial deposit and now I'm renting out part of the property to help with my mortgage.
With my average and single income, I can pay the loan+keep my lifestyle at the moment but NOT with a lot buffer (e.g. if I lose my job, lose my tenant, etc).
1. How did you save up for your first PPOR ? I graduated and started working full time at 22 but I was renting all the way. Hence it leave me with minimum savings. Did you stay with your parents etc.
2. After the first PPOR, IPs are bought on average one each year. Just curious, what is the proportion of savings vs net income OR purchase price vs net income ?
I'd like to follow the path by gathering some IP in the coming years...
Appreciate your advise.
Thanks,
InspiredByProp
Thanks InspiredByProp.
Congratulations on your acquisition!
I lived at home for about two years since graduation. However that is not to say I didn't have to contribute at home. In fact I contributed more than most kids in our culture tend to. I just religiously ensured that I saved about 30% of my income at the time. I could have saved more however I was investing in my personal development a lot AND I lacked some decent sense of money so I did splurge a bit where me and my twin went and bought a new car (although a cheapie Kia Rio) on Finance a few months after I started working. As well as the fact that I was eating out literally every single day for lunch, as well as often a muffin or a quick pasta salad from woolies. I bet on average we would have spent $6,000 a year between us for 4 years. That gives you a 5% deposit for a sub 200k IP!! (Btw we stopped eating out much in April this year. The saving is heaps and the food is heaps better - not to forget the time saved going to the take away shops!).
When we moved out at 24 we had a home to set up (my sister's place)...So it wasn't cheap. Hence quite a bit of money has been pumped into that for the past two years. We earn well for our age and that has been to our advantage. Even ever since moving out we aim to save at least 20% of what we earn now. It really helps to have a sis to talk to, go halves on everything and generate ideas - even though we have only bought independently in our own names. I read Richest Man in Babylon last year and I figured that I must save at least 1/10th of what I earn, 2/10ths on servicing loans and 7/10th on life style.
Also can I add, originally I intended to buy a PPOR close to $400k. However then met some awesome investors who inspired me to instead buy the PPOR out west. I paid a BA to find me a 2BR villa for $190k. It was a first home for 6 months and we did a 5k reno.
I could have bought something last year but I had to go through a bit of a learning curve and analysis paralysis so finally just bought in May. Though my sis bought hers in December 2011. So since November 2009 we have bought 4 properties (one is where we live). For IP's we target sub 200k properties which have a rental yield of at least 7% and below what everybody else is paying (i.e. you make money when you buy - as most say). At current interest rates each is positively geared. We don't want our lifestyle to be impacted. We intend to continue our savings (and building a buffer - which we still are!). Ideally we'd like to use the equity from the latest purchases to buy the next set of IPs. Also buying in this range and the fact that these are positively geared is important to us as the economic times are "tough" at work.
As mentioned we still save 20% of our incomes we believe this should improve to at least 25% as we get done with our HECS this financial year.
I read another one of your posts. I'm not an expert and learning like yourself, however with that much equity, if I were you I'd still move forward and draw down equity and keep buying as long as it doesn't impact my lifestyle
Congratulations on your acquisition!
I lived at home for about two years since graduation. However that is not to say I didn't have to contribute at home. In fact I contributed more than most kids in our culture tend to. I just religiously ensured that I saved about 30% of my income at the time. I could have saved more however I was investing in my personal development a lot AND I lacked some decent sense of money so I did splurge a bit where me and my twin went and bought a new car (although a cheapie Kia Rio) on Finance a few months after I started working. As well as the fact that I was eating out literally every single day for lunch, as well as often a muffin or a quick pasta salad from woolies. I bet on average we would have spent $6,000 a year between us for 4 years. That gives you a 5% deposit for a sub 200k IP!! (Btw we stopped eating out much in April this year. The saving is heaps and the food is heaps better - not to forget the time saved going to the take away shops!).
When we moved out at 24 we had a home to set up (my sister's place)...So it wasn't cheap. Hence quite a bit of money has been pumped into that for the past two years. We earn well for our age and that has been to our advantage. Even ever since moving out we aim to save at least 20% of what we earn now. It really helps to have a sis to talk to, go halves on everything and generate ideas - even though we have only bought independently in our own names. I read Richest Man in Babylon last year and I figured that I must save at least 1/10th of what I earn, 2/10ths on servicing loans and 7/10th on life style.
Also can I add, originally I intended to buy a PPOR close to $400k. However then met some awesome investors who inspired me to instead buy the PPOR out west. I paid a BA to find me a 2BR villa for $190k. It was a first home for 6 months and we did a 5k reno.
I could have bought something last year but I had to go through a bit of a learning curve and analysis paralysis so finally just bought in May. Though my sis bought hers in December 2011. So since November 2009 we have bought 4 properties (one is where we live). For IP's we target sub 200k properties which have a rental yield of at least 7% and below what everybody else is paying (i.e. you make money when you buy - as most say). At current interest rates each is positively geared. We don't want our lifestyle to be impacted. We intend to continue our savings (and building a buffer - which we still are!). Ideally we'd like to use the equity from the latest purchases to buy the next set of IPs. Also buying in this range and the fact that these are positively geared is important to us as the economic times are "tough" at work.
As mentioned we still save 20% of our incomes we believe this should improve to at least 25% as we get done with our HECS this financial year.
I read another one of your posts. I'm not an expert and learning like yourself, however with that much equity, if I were you I'd still move forward and draw down equity and keep buying as long as it doesn't impact my lifestyle
Thanks for the insight MsAli. Lots to learn from your response.
Just another question, what formula do you use for 7% rental yield ?
e.g.
Rental Yield
= (Annual Rental Income - Annual outgoings (council+strata+water) - interest payments) / purchase price
= (17,000 - 5,000 - 5,000)/ 100,000
= 7%
Note: Annual outgoings should or should not include property management fees (if we rent it through agent)?
Just another question, what formula do you use for 7% rental yield ?
e.g.
Rental Yield
= (Annual Rental Income - Annual outgoings (council+strata+water) - interest payments) / purchase price
= (17,000 - 5,000 - 5,000)/ 100,000
= 7%
Note: Annual outgoings should or should not include property management fees (if we rent it through agent)?
Hi InspiredByProp
Here is a link to a recent thread which considers the rental returns:
http://somersoft.com/forums/showthread.php?t=79420
We (MsAli and I) calculate rental return as follows:
Rent per week * 52 weeks / purchase price.
Eg. $340 rent * 52 weeks / $230,000 = 7.7%
Hope this helps.
Thank you redwing. Wow
Thank you for sharing your story Melbournian. That is awesome!!! So you reckon that 6 figure net is possible every now and again? Or do you need someone like that overseas buyer to do that? Did you do any reno the property? I used to think often overseas buyers (assuming they are not citizens of Australia) need to buy brand new?
Interesting point. Actually I've been torn between whether one should go for 30 or 50 properties and BUY ANYTHING that comes their way. Nathan does that. I like his attitude and open mindedness to it all. However at the same time I wonder, do I have the tolerance level to buy in some of the areas he buys in? I also know he first bought in metro before moving onto regional and now buys purely on numbers. Though again I wonder what is the "sell-ability" if one just buys anything and everything? Great to push the boundaries and hope I can bring a shift in my mindset to keep working on thinking outside the square....still question it.
Agreed
Haha yeh
hi msali - i think you have the right attitude to pursue your financial objectives. i too came to australia at a similar age to you and i am a few years older than you.
Well - having the abilty to hold and generate say 7-10% return for certain properties may not necessarily be the same for properties which are easy to offload Previously when there was no restriction on buying for overseas buyers which was just after the GFC, i offloaded many of the properties then as they did not require FIRB approval which helped to generate those net 6 figures on say a 400-500K property in such a short time. i do think it is possible through manufacturing growth but not as easily as before.
it really depends - how much you are comfortable doing as in financailly - buying a property for me can be short term or long term. i for one am comfortable just sittting back as opposed to acquring land or property as i had my run prior to the GFC and before that too. i suppose i more interested in generating income through online business ventures or trading.
i actually have nathan on my facebook and i personally think it is great seeing his renovations as well as having mine on them to gather feedback. i have spoken to him a couple of times on facebook too.
i also never take difficult or greedy trades as a bad experience it is all learning for me and the more knowledge i have enables to me better risk manage for the future.
Thanks Monalisa.
Gosh, just lookep up the rental market around this area... And it seems like my PPOR is only yielding <5%
Gosh, just lookep up the rental market around this area... And it seems like my PPOR is only yielding <5%
