Paying Down Strategy

Hi Rick,

Just wonder how did you get back approx 55-60% of the purchase price back in depreciation deductions alone? is it still possible now? We just had a look at a newly completed unit on the weekend. If we can get that much depreciation we would love to procees with the unit (with the price price of course) as this is the 1st time we look at brand new. Our past IPs were on Victorian (character houses) hence vrey low yield compare to this unit we look at.

thanks in advance for sharing your wisdom with us.

Cheers, Tracey
 
Well done crc! I applaud your effort & honesty here.
Most people would've quit after selling (or been foreclosed) which is why few post on this forum these days.
As you see it is equity that brings in cashflow & wealth and good night's sleep.
 
Just wonder how did you get back approx 55-60% of the purchase price back in depreciation deductions alone? is it still possible now?

Tracey, yes I purchase modern near new 2-3 bedroom 2 bathroom town houses or villas and commission a quantity surveyor to provide a depreciation schedule. Yes its easily done today. A QS can provide you further clarification on their findings for other clients also. There are a couple who frequent this forum.

I hope this helps.
 
Tracey, yes I purchase new or near new 2-3 bedroom 2 bathroom town houses or villas and commission a quantity surveyor to provide a depreciation schedule. Yes its easily done today. A QS can provide you further clarification on their findings also. There are a couple who frequent this forum.

I hope this helps.

can I ask where your buying them? what city?
 
Well done crc! I applaud your effort & honesty here.
Most people would've quit after selling (or been foreclosed) which is why few post on this forum these days.
As you see it is equity that brings in cashflow & wealth and good night's sleep.

thanks mate..I dont give up.. but I did change my stratergy to something which suited where I'm at now..

I still believe in property, but I'm not as aggressive anymore.. I want to enjoy life as well.. gearing up to high will limit lifestyle to much..

unless one can buy properties which are slightly CF- I might consider this.. but it would have to be something with CG potential..
 
I hear you CRC. with one development I have I could have sold all but 1 and retained it unencumbered. instead I retained them all - now I have an LVR of 100% and negative cashflow.

I use to think 80% was a reasonable level to gear to. a 20% drop or more tho leaves you with nothing. I think 60% is probably more reasonable - and cash flow neutral too.
 
This is a very good thread!!

It's all how long is a piece of string but I do see the merit in not letting LVR's get out of control and keeping cashflow in check.

Better to get there later but alive, as they say :)

One thing I am very amused by on this site is how people dont know when to call it quits on resi property and "move on".

I'm about 1 year away from my "goal" for resi. After that I will digest and pay down for a bit, then will put the effort to study and start picking up commercials using, in part, resi equity.

It just doesnt make sense to go down the resi path for ever - yields are too too low, and LoE is insanity.

That said, resi is the best tool for building a decent slab of equity from nothing - which can be borrowed against at very low rates, and with no covenants, to invest in other things.
 
One thing I am very amused by on this site is how people dont know when to call it quits on resi property and "move on".

I'm about 1 year away from my "goal" for resi. After that I will digest and pay down for a bit, then will put the effort to study and start picking up commercials using, in part, resi equity.

It just doesnt make sense to go down the resi path for ever - yields are too too low, and LoE is insanity.

That said, resi is the best tool for building a decent slab of equity from nothing - which can be borrowed against at very low rates, and with no covenants, to invest in other things.

I'm with you Trogdor, and I've been saying this here for some time.

I'm done with RIPs.

I reached my ''critical mass'' of RIPs as of last week and am moving on.

Only further ones I'll get will be PPOR upgrades.

Beyond a certain point this asset class just becomes a pain in the butt!

I don't think the geared up 20+ RIP strategies that some here are aiming for is a particularly effective one.
 
I hear you CRC. with one development I have I could have sold all but 1 and retained it unencumbered. instead I retained them all - now I have an LVR of 100% and negative cashflow.
.

say you kept two, 1 paid off, and one 100% LVR.. then you focused BOTH rents plus your wage into IP2.. you could pay it off pritty quickly.. say in 5 years?

in 5 years you would own two IP's, paid off, which are significantly higher in value.. and even if price remains flat.. your still doing well!

then you would have 2 lots of rent and wage to invest elsewhere once the loans are dead.
 
ah hindsight!

hey there's a growing chorus of commercial converts on this forum! I too am done with RIPs. I would only buy as flippers, dev sites, trade deals/bargains or for the kids when they are older or as new PPOR. defintely no buy / hold and be the bunny landlord type stuff
 
Well done crc! I applaud your effort & honesty here.
Most people would've quit after selling (or been foreclosed) which is why few post on this forum these days.
As you see it is equity that brings in cashflow & wealth and good night's sleep.

Are you suggesting that those posters who do not post here any more have been foreclosed, or have sold everything and quit the property game? I don't think so :rolleyes:.
 
I'm done with RIPs.

I reached my ''critical mass'' of RIPs as of last week and am moving on.

Only further ones I'll get will be PPOR upgrades.

I've been having similar thoughts of late. Aside from new PPOR, don't really need more resi to keep the asset base growing. But I guess never say never, they're not that time intensive.
 
Are you suggesting that those posters who do not post here any more have been foreclosed, or have sold everything and quit the property game? I don't think so :rolleyes:.

I don't think so either. There are other things in life than posting on SS. Hubby, who used to post regualarly rarely ever looks at the forum these days. He's just got a lot on his plate at the moment & SS is last on the list.

There has to be many others that are pursuing other interests at present. Just because they are not posting does not mean they are now broke.:rolleyes:
 
here's another scenario.

1x high CG, low yield property.

1x low CG, high yield property.

let one pay off the other and repeat ad nauseum.
 
Ok so I read the first few replies, but I didn't bother reading the rest.

BUT, it seems to me like you jumped on the property investment bandwagon as ACA and Today Tonight were making stories of how to GET RICH QUICK off property investing.

No offence, but the majority of people here know that buyingg at the top of the market hoping for big CG gains isn't the best idea. You picked the worst time of the market to buy, and it's very unfortunate, but your advice isn't that great for new investors. Due Diligence is advised for everyone!
 
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