Good idea, this is what I was trying to explain through my earlier posts, ie. I was referring to uping the ante!!!
Well it's party time, got to go.....HAPPY NEW YEAR PEOPLE!!
Reassure me
- Thread starter Brenda Irwin
- Start date
Well it's party time, got to go.....HAPPY NEW YEAR PEOPLE!!
Fair enough Bloss,
Oh and BTW...my apologies on the gender faux pas!!!
That's OK and to save confusion I now have my own BoatBoy thingy.
Bloss is still around, she'll probably change the pic and won't post as often as me.
Someone has to go to work and bring in the $$$
BB
Bloss
Maybe you're missing a point .
While property goes up in the long term , Certain types of property don't go up consistently , and that includes the type of property that Brenda and myself have bought over the last 4-5 years.
If you look at places like ipswich / logan etc, you will find that they go sideways ( or backwards ... ) for long periods and then have a big catch up spurt during which they out perform the rest of the market. This spurt period was the period that Brenda timed so well. We bought several properties off people in 2002-2003 that were selling for less than their previous purchase price which occure maybe 5-10 years previously and then they preceeded to double in the next 2 or so years .
We have sold several properties to pay for a development in Sydney.
My next decision will be whether to sell our remaining logan properties and put that money into a significant deposit for a well placed property ( or two ...) in Sydney.
I'd have a guess as to which will have significant capital gain earlier in the next cycle.
See Change
Maybe you're missing a point .
While property goes up in the long term , Certain types of property don't go up consistently , and that includes the type of property that Brenda and myself have bought over the last 4-5 years.
If you look at places like ipswich / logan etc, you will find that they go sideways ( or backwards ...
) for long periods and then have a big catch up spurt during which they out perform the rest of the market. This spurt period was the period that Brenda timed so well. We bought several properties off people in 2002-2003 that were selling for less than their previous purchase price which occure maybe 5-10 years previously and then they preceeded to double in the next 2 or so years .We have sold several properties to pay for a development in Sydney.
My next decision will be whether to sell our remaining logan properties and put that money into a significant deposit for a well placed property ( or two ...) in Sydney.
I'd have a guess as to which will have significant capital gain earlier in the next cycle.
See Change
There wouldn't be any tax to pay as the property was purchased prior to 1985 CGT introduction. Also the same for the next 2.
Would make the calcs a bit more interesting. Still, don't know if I'd sell though in that situation.
I can see were you're coming from there Seech, and we have wondered about some of those areas like Logan and Ipie ourselves, and your right, if you can't hold out for the long haul, "Plan B" for me is the "Plan A" for you.
Being fairly new to the game and , and while thing's seem to be doing much better than that 10% average where we have brought, we'll try to hold out and not sell, and just leverage into a few more.
God know's where though, it's not as easy in CQ anymore and to Doze,split and build down here mean's we may have to tip hard earned into the pot every week for a few more years until the yeild increases.
And that sound's like Bloss working till 50, and that ain't an option.
It seems to me that even if working on a 5% average we seem to have close to a $100k increase in equity on our property per annum,compounding, and as our rent cover's all of the outgoing's we feel/hope that we'll be looking pretty good when Bloss retire's from the 9 to 5 work in a couple of year's at 45 year's old.
We know we can live like God's on the boat for $50k per year in OZ, so in a place like Langkawi [malaysia] we should be looking real good.
We just need to figure out how to pull $$$$ out of the equity to live on.
Any good suggestion's, that don't involve selling at this stage??
Should I start another thread?
Hope you all had a good start to the year,
BB
Being fairly new to the game and , and while thing's seem to be doing much better than that 10% average where we have brought, we'll try to hold out and not sell, and just leverage into a few more.
God know's where though, it's not as easy in CQ anymore and to Doze,split and build down here mean's we may have to tip hard earned into the pot every week for a few more years until the yeild increases.
And that sound's like Bloss working till 50, and that ain't an option.
It seems to me that even if working on a 5% average we seem to have close to a $100k increase in equity on our property per annum,compounding, and as our rent cover's all of the outgoing's we feel/hope that we'll be looking pretty good when Bloss retire's from the 9 to 5 work in a couple of year's at 45 year's old.
We know we can live like God's on the boat for $50k per year in OZ, so in a place like Langkawi [malaysia] we should be looking real good.
We just need to figure out how to pull $$$$ out of the equity to live on.
Any good suggestion's, that don't involve selling at this stage??
Should I start another thread?
Hope you all had a good start to the year,
BB
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Bloss
Maybe you're missing a point .
While property goes up in the long term , Certain types of property don't go up consistently , and that includes the type of property that Brenda and myself have bought over the last 4-5 years.
If you look at places like ipswich / logan etc, you will find that they go sideways ( or backwards ...
Just to give me a head's up here do you find that the rent's go backward's as well?
I can see them sitting and not moving, but backward's, please, say it ain't so.
BB
Yes I think it was. But look at the type of property she invests in, in her situation selling ANY would be a mistake as most have huge CG potential, but she did so to maximise her ability to buy bigger/better etc etc. And that's a good thing isn't it???
"Buy and Hold" works best if the property is performing well, and is likely to continue the upward trend in years to come eg. in high demand areas / "bluechip" districts.
Holding onto a property for the sake of making CG is fine, and if you don't plan to do anything else, are paying things off at a comfortable rate then there's no problem; by all means sit it out for as long as possible. But if it means you're strapped to make repayments, can't but want to move forward, and/or that you're limiting your options because of reluctance/fear why risk "cutting your nose off to spite your face"??
An ideal "Plan B" (if finances permit) is to sell 1:1 as Peter suggested, but if this is not possible, alternative wealth creating strategies should be considered.Ultimately, IMO "SELL" is a four letter word and best avoided if possible, HOWEVER without doing so I would not be in the position I am in today. As much as I hated parting with any of my "babies" I had to do what was financially the most viable thing to ensure greater profit in the longer term.
And yes BB, rents can go backwards, albeit rare sadly it does (and can) happen.
I am certainly not suggesting selling is good for all.
In my case, I am no spring chicken and I only started investing 9yrs ago.
I want to grow my assets fast and have a good passive income now.
I really don't want to be 65 before I can have good security and a better standard of living. But thats just in my case at this time.
I did worry about the rent returns as my ips are Ipswich and Murgon.
Murgon is primarily a meatworks town and if it closed, it could affect my ips.
I chose to sell a few to reduce the risk of vacancies. The rent returns there are still very good.
Ipswich is a different matter. With Brisbane rents rocketing up and gov't housing being decreased, I worried about substandard tenants moving to Ipswich. Any tenants coming out of gov't subsidised housing have no tenancy reports on them, so it is likely that many are not going to be good tenants.
It is difficult to get the rents up in Ipswich also. Even after after a new bathroom, kitchen, and internal painting, the best I could get the rent up was $15. I decided to sell a few Ips in Ipswich also.
In regards to CGT, yes, selling will uncur some tax. But it is a 'one off', you don't carry it over year after year, like the interest you have to pay on loans year after year.
My secret is, I put the estimated tax monies into an interest earning account and hold off having my accountant lodging my tax until around Feb the following year. At least that way I get to earn some extra income from the profits before the ato get them in Cgt.
In my case, I am no spring chicken and I only started investing 9yrs ago.
I want to grow my assets fast and have a good passive income now.
I really don't want to be 65 before I can have good security and a better standard of living. But thats just in my case at this time.
I did worry about the rent returns as my ips are Ipswich and Murgon.
Murgon is primarily a meatworks town and if it closed, it could affect my ips.
I chose to sell a few to reduce the risk of vacancies. The rent returns there are still very good.
Ipswich is a different matter. With Brisbane rents rocketing up and gov't housing being decreased, I worried about substandard tenants moving to Ipswich. Any tenants coming out of gov't subsidised housing have no tenancy reports on them, so it is likely that many are not going to be good tenants.
It is difficult to get the rents up in Ipswich also. Even after after a new bathroom, kitchen, and internal painting, the best I could get the rent up was $15. I decided to sell a few Ips in Ipswich also.
In regards to CGT, yes, selling will uncur some tax. But it is a 'one off', you don't carry it over year after year, like the interest you have to pay on loans year after year.
My secret is, I put the estimated tax monies into an interest earning account and hold off having my accountant lodging my tax until around Feb the following year. At least that way I get to earn some extra income from the profits before the ato get them in Cgt.
Didn't think that for a minute Brenda. And as I was trying to explain "selling" is good provided it is employed as a means of maximising one's portfolio, by reinvesting into better money making avenues (be it, bigger/better located properties, shares, businesses etc).
Secret for what??? Delaying paying the CGT??? Unless you're paying a huge amount of CGT the saving (let alone the compounding interest) would be minimal. HOWEVER having said that, I do agree wholeheartedly, better the money is in your pocket than in the taxman's (at least for the time being)!!!My secret is, I put the estimated tax monies into an interest earning account and hold off having my accountant lodging my tax until around Feb the following year. At least that way I get to earn some extra income from the profits before the ato get them in Cgt.
Don't be afraid of CGT; it isn't the great all evil people make out. Sure it hurts, hell I know only too well...I've paid over 250K in CGT over the last few years!!!
It may sound an astounding sum but when you think about how CGT is calculated, you'll soon see that for it to be so, the profit levels associated to such taxes would have far outweighed the pain. I havn't personally seen rents go backwards , BUT when we were buying in Logan 2002 , we came accross some properties when the rents were slightly higher than standard and the agents said that was because the tenants hadn't realised that rents had gone down and hadn't renegotiated.... Not sure how widespread it was.
Since we've bought rents have gone up and with one preoperty we do need to increase rent again with next renewal.
See Change
Fair enough, just had the alarm bell's ringing in my head a bit, but at the end of the day we'd have to wash off around 20% across the rent roll before it started hurting.
Logan is an interesting thing. Every time I do the hunt, It seem's to scream undervalued opportunity to me. 4 lane highway, train close by, close to GC and Bris, and good infrastructure, but just does'nt seem quite right to me.
I've also got an "in " in the town planning dept.
We've almost had contract's signed a couple of times on potentual unit site's but have run away at the last minute.
Don't rightly know why as the number's didn't look bad.
BB
Logan is an interesting thing. Every time I do the hunt, It seem's to scream undervalued opportunity to me. 4 lane highway, train close by, close to GC and Bris, and good infrastructure, but just does'nt seem quite right to me.
I've also got an "in " in the town planning dept.
We've almost had contract's signed a couple of times on potentual unit site's but have run away at the last minute.
Don't rightly know why as the number's didn't look bad.
BB
Perhaps I should have used an example as you did Seech.
BoatBoy,
Like Seech, I also personally haven't had any of my rents go backwards, but I HAVE seen it happen to friends of mine who own several apartments in the CBD. Due to an oversupply they had to drop the rentals on apartments to entice potential tenants. This was not an uncommon occurrence, and I believe some landlords were going as far as offering all sorts of incentives (ie. free holidays, whitegoods, a week/month's free rent etc) just to get them through the door!!!
Survival tip #1....Never "assume" full occupancy on any rental property!!!
A wise investor always assumes at least 20% vacancy, and factors this into the equation when doing their sums on purchasing or refinancing properties.
Survival tip #1....Never "assume" full occupancy on any rental property!!!
A wise investor always assumes at least 20% vacancy, and factors this into the equation when doing their sums on purchasing or refinancing properties.
Totaly understand the first and second post.
They are all in a 60,000+ regional with a less than 1% vacancy rate, so feel fairly confident at the moment, and do have a reasonable "slush fund" to fall back on in the worst case scenario.
BB
Boat Boy,
As they say , often the motive to buy is that it is better to own something than nothing,
Why do you think Logan is undervalued and how do you come
to the conclusion, I Think some part,s are overvalued ,i was at a party
in Logan over the new year one of my mates has lived in the area for 18
years he tells me a different story,Its ok to buy properties in logan cheaply
but the problem you will face is the ability to resell this type of property
in a short time frame, do not allow your reactions to be dictated by the agent,s
action;s.good luck willair.........Boat Boy,
Why do you think Logan is undervalued and how do you come
to the conclusion, ,Its ok to buy properties in logan cheaply
but the problem you will face is the ability to resell this type of property
in a short time frame, do not allow your reactions to be dictated by the agent,s
For somwhere that is a city in it's own right, that would seem to have better access to Brisbane than say Ipswich and Redcliffe and reasonably close to the beach it seems cheap in comparison.
If not wanting to sell in the short term would it be that much of a problem.?
We were wanting to build, rent, hold and have a block of unit's, not sell.
And we've never had our reaction's dictated by agent's action.
Having had 10 year's of sales background in a previous life, i'd like to think i'd have an edge on the limited skill's most of them have.
As I said, gut feel dictated walk away, but I still find it an interesting place that I feel offers more than other area's selling for bigger number's.
Sure, there's a few rough head's, but isn't there everywhere?
BB
Good question –
I have often wondered about the same thing. Except in my case my portfolio is negative geared and I need to find $1200 a month. Is it really worth it in this non growth period. Should I sell a property to lessen the negative burden?
Well I look at it this way.
- My PPOR is paid off and I look at spending $1200 a month as basically paying rent.
- The $1200 a month is for a property portfolio of $1.6m. These properties are all in the southern beachside suburbs of middle Melbourne. All walking distance to the beach and railway. The properties range from units to a development site.
- I am the sole breadwinner and the losses are offset against my tax.
- I believe the properties are in good growth areas.
- The older properties support the latest acquisition.
- As Jan says – the important key is ‘Time in the market – not time the market’
In reading your story in API etc I have always been a little concerned about your rural purchases, even if they are positive geared. I believe you are on the right track by taking some gains and limiting your exposure to these rural properties.
I have often wondered about the same thing. Except in my case my portfolio is negative geared and I need to find $1200 a month. Is it really worth it in this non growth period. Should I sell a property to lessen the negative burden?
Well I look at it this way.
- My PPOR is paid off and I look at spending $1200 a month as basically paying rent.
- The $1200 a month is for a property portfolio of $1.6m. These properties are all in the southern beachside suburbs of middle Melbourne. All walking distance to the beach and railway. The properties range from units to a development site.
- I am the sole breadwinner and the losses are offset against my tax.
- I believe the properties are in good growth areas.
- The older properties support the latest acquisition.
- As Jan says – the important key is ‘Time in the market – not time the market’
In reading your story in API etc I have always been a little concerned about your rural purchases, even if they are positive geared. I believe you are on the right track by taking some gains and limiting your exposure to these rural properties.