the power of leverage over the power of income

[bicko]

So as the increase in property prices rounds the corner, it s time to look at the basics and think if even we achieve only minimal capital gains, does the magical power of money leverage stack up against the constant positive cashflow from IPs that may not continue gain in value as other negative geared Capital City investments.

 

[see_change]

Gee

I don't see the choice that I'd pick . Leverage , Cashflow positive and Capital gains ....

See Change

 

[perky29]

I chose option 1.
Option 2 would be very unsafe in todays environment in MOST country areas (although Nth QLD and NZ may offer some opportunity).
Any regional NSW or Victoria property would have a very high risk of negative growth over the next few years - so is the worst option.

 

[BV]

I voted for option 1.

-ve geared Properties are found in areas with higher demand
Higher demand means higher returns (long term) and price stability
during slow times.

If I could find a +ve geared property in a large city
or in an area “Normally dominated” by -ve geared properties
I would go for it.

I say “Normally dominated” because in the current environment
you might find that properties in some areas are only -ve geared
because of the recent boom and the fundamentals may OR may not
be there for the prices to stay at their current levels during slow times.

 

[LisaS]

Wouldn't it be nice to have +CF & growth. Oh well, I can always dream. Although I think there are still some out there.

I would have to go with Option 1 at the moment, but think option 2 will be attainable in a couple of years again.

Lisa

 

[geoffw]

Wouldn't it be nice to have +CF & growth. Oh well, I can always dream. Although I think there are still some out there.

I would have to go with Option 1 at the moment, but think option 2 will be attainable in a couple of years again.

Lisa

It was possible to buy that a few years ago- although us unsuspecting buyers didn't realise that the +CF growth was there.

Would you believe that, in Queanbeyan where I live (just near Canberra), it was possible to get 12% return 3 years ago?

Rents have gone up- but it's hard to get more that 5-6% return now, as prices have gone through the roof.

Where was that crystal ball when I needed it?