do people still think that is a viable method, moving forward from today?
Yes ...... read this thread and you'll see why .....
Cliff
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do people still think that is a viable method, moving forward from today?
It's interesting reading the above comments because most of the posters who have CF+ IPs are in less desirable areas (and yes, they're happy with buying there). Just confirms my thinking which is that it's very hard to buy CF+ IPs in your typical "blue-chip" or A or B-grade suburb. When I say CF+ I mean you've bought an IP and it's become CF+ within 1-2 years or straight from purchase.
I've never used capital growth as a part of my strategy and I'm honest when I ask, do people still think that is a viable method, moving forward from today?
He asks, hopefully not hijacking the thread...
I've never used capital growth as a part of my strategy and I'm honest when I ask, do people still think that is a viable method, moving forward from today?
He asks, hopefully not hijacking the thread...
I've never used capital growth as a part of my strategy and I'm honest when I ask, do people still think that is a viable method, moving forward from today?
He asks, hopefully not hijacking the thread...
I've never used capital growth as a part of my strategy and I'm honest when I ask, do people still think that is a viable method, moving forward from today?
He asks, hopefully not hijacking the thread...
[B said:skater;Just take a look around at the successful people around here, and you will find that they've all done things their own way. There is no "one size fits all" in investing, only what suits you. The main thing the successful have that the unsuccessful don't is determination and drive. The ability to keep on keeping on. The will and the faith in themselves to hold on through a bad patch, and sometimes the get up and go to start again and learn from mistakes.
You also need to realise that success means different things to different people. It could be a six figure passive income, it could mean enough to retire overseas, or it could simply mean an extra couple of hundred $ pw to see you through retirement. So long as you have met your goal, you are a success[/B].
It's horses for courses. When we started, we couldn't afford to buy anything that wasn't positive geared, as we were broke. The IPs were all in larger places, some outer Sydney, some regional. Over time, rent increases and they got growth, which in turn meant more money for more IPs.
We've also got some where there's been minimal to no capital growth, but they've got good cash flow. There's no point in us selling them, and they've always been fully let, so they just sit there.
If we were young go-getters, like Westminster, we'd unload them & look at doing something different, but we're old now, and really can't be bothered.
I think there will always be capital growth for well located property, but not everyone can afford to hold onto something that is largely negatively geared. At the end of the day, if you've found something that works for you, in your situation, then just go with it and don't listen to the noise from others telling you that you're doing it wrong, just because its not the same as everyone else.
Just take a look around at the successful people around here, and you will find that they've all done things their own way. There is no "one size fits all" in investing, only what suits you. The main thing the successful have that the unsuccessful don't is determination and drive. The ability to keep on keeping on. The will and the faith in themselves to hold on through a bad patch, and sometimes the get up and go to start again and learn from mistakes.
You also need to realise that success means different things to different people. It could be a six figure passive income, it could mean enough to retire overseas, or it could simply mean an extra couple of hundred $ pw to see you through retirement. So long as you have met your goal, you are a success.
TMNT,
Deltaberry,
Without knowing how taxation plays into your strategy, do banks take your consistent capital gains into consideration when calculating serviceability or are you limited by your income, dividends, (royalties??), rents and potential rents of a property you are looking at?
It's horses for courses. When we started, we couldn't afford to buy anything that wasn't positive geared, as we were broke. The IPs were all in larger places, some outer Sydney, some regional. Over time, rent increases and they got growth, which in turn meant more money for more IPs.
We've also got some where there's been minimal to no capital growth, but they've got good cash flow. There's no point in us selling them, and they've always been fully let, so they just sit there.
If we were young go-getters, like Westminster, we'd unload them & look at doing something different, but we're old now, and really can't be bothered.
I think there will always be capital growth for well located property, but not everyone can afford to hold onto something that is largely negatively geared. At the end of the day, if you've found something that works for you, in your situation, then just go with it and don't listen to the noise from others telling you that you're doing it wrong, just because its not the same as everyone else.
Just take a look around at the successful people around here, and you will find that they've all done things their own way. There is no "one size fits all" in investing, only what suits you. The main thing the successful have that the unsuccessful don't is determination and drive. The ability to keep on keeping on. The will and the faith in themselves to hold on through a bad patch, and sometimes the get up and go to start again and learn from mistakes.
You also need to realise that success means different things to different people. It could be a six figure passive income, it could mean enough to retire overseas, or it could simply mean an extra couple of hundred $ pw to see you through retirement. So long as you have met your goal, you are a success.
Well that's why A grade investments with cashflow is hard to come buy. About the only stuff I buy.
It's horses for courses. When we started, we couldn't afford to buy anything that wasn't positive geared, as we were broke. The IPs were all in larger places, some outer Sydney, some regional. Over time, rent increases and they got growth, which in turn meant more money for more IPs.
We've also got some where there's been minimal to no capital growth, but they've got good cash flow. There's no point in us selling them, and they've always been fully let, so they just sit there.
If we were young go-getters, like Westminster, we'd unload them & look at doing something different, but we're old now, and really can't be bothered.
I think there will always be capital growth for well located property, but not everyone can afford to hold onto something that is largely negatively geared. At the end of the day, if you've found something that works for you, in your situation, then just go with it and don't listen to the noise from others telling you that you're doing it wrong, just because its not the same as everyone else.
Just take a look around at the successful people around here, and you will find that they've all done things their own way. There is no "one size fits all" in investing, only what suits you. The main thing the successful have that the unsuccessful don't is determination and drive. The ability to keep on keeping on. The will and the faith in themselves to hold on through a bad patch, and sometimes the get up and go to start again and learn from mistakes.
You also need to realise that success means different things to different people. It could be a six figure passive income, it could mean enough to retire overseas, or it could simply mean an extra couple of hundred $ pw to see you through retirement. So long as you have met your goal, you are a success.
My strategy is to develop, creating equity and positive cashflow relative to the size of the project. As my equity and serviceability grows, so do the size of the projects. This is exponential.
skater: Nice, very nice post.
willair:
In terms of capital gains being accepted as serviceability: The bank manager of my most recent lender said that if I sold a place, the capital gains would likely be deducted from my tax return when calculating serviceability because it would be a one off and not sustainable. I guess if I was selling properties at least every year it would be visibly ongoing and a different story.
From reading about other investors buying a CF+ properties, most of the time I see they're located in pretty crap locations, ie: population numbers are low, they're located out in woop woop, or in some undesirable suburb that you wouldn't get your dog to live these...basically, the way I see it, is that...
...
Yes, I know there are exceptions, where an investor bought a bargain IP at bottom price in a A-grade location or the investor put in 30% deposit or equity and now the IP is CF+, but most of the time when I'm reading or hearing about these investors, most of these properties seem to be located in undesirable locations.
If you have a choice then which option is better? Eg purchase 1x NG ip near cbd with good cg v 3-4 sub 200k 7% ip with low growth? Option a costs $300pw but in 18mths you have extra 100k equity. Option b costs 0 and no growth in18 mths.