Regarding the 'lifestyle' poll

[JMC]

Hi,
I am eagerly trying to get into the property market (I live in Sydney, but see canberra as my other option due to my family being down there) but I am seeing fear hold me back.

The post that had everyone list there lifestyle and Investment situation was very inspiring, especially seeing so many people around my age involved (25). One question that I wanted to ask people with multiple IP's (especially those that purchased multiple times with in a 1-3 year period) is how secure are you? I mean having 11 IP's sounds fantastic, but are you really knee deep in debt? what happens to you if the interest rates rise by 1%?


My current dream is to stop full time work and work 3 days a week, buy an IP or PPOR (I don't own a PPOR) and go overseas for a 6 month stint - all in the next year and a half. I earn $65000 and have $32000 saved up.... do you think I am crazy?

JMC

 

[MarkB]

JMC

1. Interest rate risk can be managed - just fix your rates.

2. Depending on where you bought, what you bought and your servicibility, you could easily get one (perhaps even 2) IP's with that much of a deposit.

If the IP(s) are positively geared then it matters not where you are - you could be at work or off climbing the Himilayas (or anywhere in between).

If it (they) are negatively geared but positive casflow, then this situation may be dependant upon your marginal tax rate (which on $65k is 47 cents on the dollar, plus 1.5 cents medicare levy).

You should speak to an accountant who is experienced in such matters - as they will be able to advise you on income and timing issues.

MB

 

[Cosmo]

In good times it’s easy to buy multiple properties the trick is being able to hold them WHEN times are less favourable. I’ve been an active property investor since 1986 and watched the same euphoria in the last boom take over normally sane people. They bought multiple properties and failed to hold onto them when times became less favourable (high interest rates).
There’s a lot to be said for Jan Sommers method. Sure it’s slow, sure it’s boring, but it’s very bullet proof.

Be careful with what you read on this forum (or any forum!). Your looking at a very narrow spectrum of investors that appear to be very active and switched on. Is there some exaggerations in their posts ? Maybe. People will always tell you their success stories and sweep under the carpet their mistakes.

I don’t wish to rain on your parade but a newbie entering the market at this stage should be very careful.

 

[MarkB]

Originally posted by Cosmo
In good times it’s easy to buy multiple properties the trick is being able to hold them WHEN times are less favourable. I’ve been an active property investor since 1986 and watched the same euphoria in the last boom take over normally sane people. They bought multiple properties and failed to hold onto them when times became less favourable (high interest rates).
There’s a lot to be said for Jan Sommers method. Sure it’s slow, sure it’s boring, but it’s very bullet proof.

Be careful with what you read on this forum (or any forum!). Your looking at a very narrow spectrum of investors that appear to be very active and switched on. Is there some exaggerations in their posts ? Maybe. People will always tell you their success stories and sweep under the carpet their mistakes.

I don’t wish to rain on your parade but a newbie entering the market at this stage should be very careful.

Cosmo

Wise advice, but a couple of follow up questions:

1. These people who lost out owing to high interest rates:

- Did they not fix their rates?

- If they did fix their rates, did they fix them at the top of the cycle and then watch rates fall?


2. To which property 'market' (or markets) do you refer?


MB

 

[Cosmo]

Hi Pitt St,

1) We’re talking average joes here (aka newbies). They didn’t watch the market like more astute property investors would. You’re right one of these guys fixed at the top of the cycle and lived on fish fingers until it was all too much.

Luckily for me I had a loan from my dad during all this (dad, so sick of tenants etc sold up the crap in his portfolio, realised $1 million and lent it out to his children so they could by PPOR’s etc).

2) Sydney.