Stacking up numbers with cash flow positive properties

[vaughan]

While I agree with you, I also get annoyed when people attribute NONE of their success to luck.

Regardless of how much hard work is involved, there is always an element of luck as well (IMO).

Stuff happens. Whether it is good luck or bad luck depends on your preparedness for the event.

EG: Sydney property doubled in value between 2000 and 2008. I have a house in Sydney that doubled in value.

Bad luck: I can no longer afford to buy in Sydney.
Good luck: I can buy an IP with all my equity.

It has been hard work learning how to access that equity and buy a good investment property. It has also been hard work paying the mortgage for the 8 years between 2000 and 2008.

Where is the luck?

 

[JT7]

While I agree with you, I also get annoyed when people attribute NONE of their success to luck.

Regardless of how much hard work is involved, there is always an element of luck as well (IMO).

I think that if you put in the hard work, take the leap of faith and stay focussed on whatever strategy you decide to employ... eventually you will attract 'luck' or what we call 'luck'.... Success

 

[Peter_Tersteeg]

Hard work does tend to attract more 'luck' than being lazy. Those who are successful will usually also have stories of bad luck and often additional stories of how they overcame this.

Vaughn may be unlucky that he can no longer afford to buy in Sydney, but this won't stop him from using his equity to create luck somewhere else where he can afford to buy. When that area increases in value he'll be lucky there as well.

 

[JT7]

Hard work does tend to attract more 'luck' than being lazy. Those who are successful will usually also have stories of bad luck and often additional stories of how they overcame this.

Vaughn may be unlucky that he can no longer afford to buy in Sydney, but this won't stop him from using his equity to create luck somewhere else where he can afford to buy. When that area increases in value he'll be lucky there as well.

Sometimes I get so focussed and 'head-down **** up' trying to achieve my goals I find it difficult to see the forrest through the trees so to speak. Encouraging to hear from those who have travelled round the cycle a couple of times that there is light at the end of the tunnel.....

 

[sprightly]

thank you all for the wonderful feedback.

thanks Deltaberry for your excellent response.

i guess alot of the things mentioned are risks and can be mitigated with insurance and research.

Have you come across a web site that will give you good data to the potential places to invest?

with so much information information available on the internet, i dont really want to pay for it......

I know there is a web that that promotes it ....

do you know of any web sites that is free and can find information about positive cash flow properties? their yield ? their geographics, infrastrucutre etc?

 

[skater]

do you know of any web sites that is free and can find information about positive cash flow properties? their yield ? their geographics, infrastrucutre etc?

Um....here.

 

[HD_ACE]

Also dont forget about sacrifices along the way !!

Cheers

 

[Nathan]

I thought it was impossible getting 10 properties and making $50kpa when starting out...

Looking back it was pretty easy, have a clear vision as the world stands aside for a person who knows where they are going...

I think that you need to be conservative and realistic with numbers but for $100kpa I would say buy 15 properties today in a capital city with pp around $250,000 and 8% yields.

This will get you there in around 5 - 10 years pending how aggressive/passive you wish to be.

Goodluck!

 

[luce.rocks]

Hard work does tend to attract more 'luck' than being lazy. Those who are successful will usually also have stories of bad luck and often additional stories of how they overcame this.

My father in law likes to say 'Luck finds you working'. He worked his butt off and made a small fortune over 40 years. He was very lucky that Spanish property did so well for so long. Unfortunately, bad luck also found him working and he lost 95% of it all.

 

[D.T.]

I thought it was impossible getting 10 properties and making $50kpa when starting out...

Looking back it was pretty easy, have a clear vision as the world stands aside for a person who knows where they are going...

I think that you need to be conservative and realistic with numbers but for $100kpa I would say buy 15 properties today in a capital city with pp around $250,000 and 8% yields.

This will get you there in around 5 - 10 years pending how aggressive/passive you wish to be.

Goodluck!

Are your proposed numbers net of interest costs or do they require some debt reduction?

 

[BLTN]

I think that you need to be conservative and realistic with numbers but for $100kpa I would say buy 15 properties today in a capital city with pp around $250,000 and 8% yields.

8% yield? Isn't that practically unheard of for property? And for $250K, I would have thought that all you could get would be a unit, which (once strata fees etc are included) have considerably lower yield than they appear to have.

Genuinely curious about this as I know you know what you are doing, but not sure where you are finding 8% yields in capital cities for that price... I'd be buying about 8 of them with my current equity I've got!

Also I'm assuming when you say buy in capital cities you mean buy in Perth (say) as opposed to in mining or regional towns in WA, is that correct?

 

[redwing]

It is easily doable over time. It took me personally 8 years to get over 100,000 in income as well as having an average job. Having a clear strategy is important. Just start with one property and leverage yourself forward.
Cheers
Charlotte30

$100k clear

 

[sprightly]

I thought it was impossible getting 10 properties and making $50kpa when starting out...

Looking back it was pretty easy, have a clear vision as the world stands aside for a person who knows where they are going...

I think that you need to be conservative and realistic with numbers but for $100kpa I would say buy 15 properties today in a capital city with pp around $250,000 and 8% yields.

This will get you there in around 5 - 10 years pending how aggressive/passive you wish to be.

Goodluck!

Thanks Nathan,

Is that really possible to get a yield of 8 percent with a property priced at $250k?

Can u give me examples?

 

[starter]

Thanks Nathan,

Is that really possible to get a yield of 8 percent with a property priced at $250k?

Can u give me examples?

You can also work backwards for this.

8% yield on purchase price of 250k (not taking into account purchasing costs since yield is mostly quoted as against purchase price, equates to weekly rent of $385 per week. Over the last few years you could have definitely gotten these in Western Sydney with a bit of looking, a bit harder now but it's definitely still possible. Especially if you're willing to do a bit of cosmetic reno to lift the rent as well.

My latest purchase for example was a unit in St Marys at 201k which rented straight away at $300 per week, so yield of 7.7%. So not far of at all and this was a stock standard purchase that I didn't have to touch at all.

 

[Charlotte30]

cashflow positive properties

Charlotte I think we need to hear more of your story...were your ip's in nz or aus or elsewhere and how did you get to 100k in 8 yrs - pretty short time really. Do tell???[/QUOTE]

My ips are all in Christchurch, NZ and I have 7. I started in 2002 and I invest in high density land close to the city. I started with one freehold property. My story is one of buying property with an upside. Adding a house behind and revaluing each property so I can borrow more money. I Leveraged forward until the market started to tank in 2007. Then consolidated for about 4 years. Built a PPR behind one of my rentals in 2011 and turned previous PPR into a rental. Earthquake happened and caused a few problems. Upside was being able to increase rents. Bought an absolute dump in 2012 and renovated. This also has enough land to build a house behind. Current rents between 390-435 per week. I now have a line of credit to make purchasing easier.

Charlotte

 

[Bennny]

PT_Bear hit the nail on the head.

Heaps of ways to make money in property by adding value - renovation, buy and hold, development etc etc etc.

Nathan Birch has slaved his guts out and deserves every dollar he has.

Ten ways to skin a cat - do what suits you.

 

[china]

Work backwards...



The real question now becomes how to get $2.5M in properties, without any loans over them.

One solution may be to accumulate a portfolio to the value of $2.5M, then get the properties to double in value and sell off some to pay down debt. You could simply wait for capital growth or find ways to manufacture it yourself.

Other solutions may include finding ways to make the 5% rental yield into 10%, so you can work with $2.5M in properties with the loans attached.

Get higher cashflow properties that don't have the growth, instead use the cashflow to pay off debt.

You could also find ways to take out the 80% consideration at the start. That way you only need $2M to get the same result. Using shares instead of property may do this for you.

So many options

Another option is to save 2.5m and just buy the properties. Could be the simplest way if you are on a good income and minimal expenses/frugal life. After 15 years of back busting work, I have managed to save 2m. But it is getting easier to reach the 2.5m as time goes as the 2m is also put to work earning bank interest and share dividends.

 

[china]

Having 100k income per year from rent isn't hard.

One way (not the only way) is to pay P & I until the property is paid off.It just takes time. Sit back and when it is retirement time, assuming you are willing to work until close to retirment age, you are there with a nice income.

I think this is just another form of a strict savings plan, with the added benefit of cap growth and contributions from rent.

 

[Charlotte30]

cashflow positive properties

$100k clear

No not clear. Last financial year 123,000 gross and 60,000 clear.
Charlotte30

 

[knightm]

No not clear. Last financial year 123,000 gross and 60,000 clear.
Charlotte30

Charlotte thank you for elaborating. I love having my eyes opened all the time. I had a hunch you might be in Christchurch. I have met a few people who lived through the tremors and heard some truly humbling stories. It must have been such a harrowing time.

Great outcome on the income front after time

Well done.