Your property investment debt.

[Richard Feynman]

Now this would be really interesting poll. Richard could you please create one?

Ours is 13x. Will go to 25x once we drop to one wage

You and the partner are on almost identical salaries eh?

So, about the poll thing.

I might have a SS poll day soon*. If I don't end up banned, we will have about as many news polls as I have dollars of debt

* I might not be kidding.

 

[Coota9]

Richard,

Should have poll for property investment equity..or has it already been done?

 

[D.T.]

Richard,

Should have poll for property investment equity..or has it already been done?

Isnt that what the networth one is?

 

[Singo]

So, about the poll thing.

I might have a SS poll day soon*. If I don't end up banned, we will have about as many news polls as I have dollars of debt

* I might not be kidding.

Ok, on your poll day could you create one asking for how long each plan to live? Say 61-70, 71-80, 81-86, no idea etc. It would be interesting as investors plan for their retirement, how long they are actually planning to live

 

[impala67]

Interesting one DT.

18x here.

+1. I agree.

15 for me for now, down to just under 8 if I include the rental income.

Singo's Poll idea might be a good one also. 100* not out for me.

 

[BayView]

What I will say is that when they start quoting on the 6.00pm news; "the cost of the average mortgage has gone up/down by $x" when there is an interest rate change...we are not in that category.

 

[D.T.]

What I will say is that when they start quoting on the 6.00pm news; "the cost of the average mortgage has gone up/down by $x" when there is an interest rate change...we are not in that category.

Not very difficult

 

[hobo]

I can't work out whether to answer based on the debt we took out to buy shares in the property JV, or whether to count our proportion of the full debt within the company... so I've not answered.

"PLENTY" comes to mind, though.

 

[rugrat]

I have an issue with how to answer this. I own 5% of our IP, but that's not truely representative of the debt I owe. We are both liable for the entire debt. We are married and have been together since teenage years - so although 5% may be on a peice of paper, I have a legal claim to a lot more then that. And then of course we are single income, so his income is in actualitity the only income paying anything.

 

[landlubber]

Congrats!

My sincere congrats to those forumites who are in the top levels of this poll. You don't reach those levels except by application of some intelligence and some hard work. By now any worries are the banks ... Not yours .....hahahahaaa! LL

 

[roe]

Where is the debt free option
there are people who own properties and has no debt

 

[landlubber]

Where is the debt free option
there are people who own properties and has no debt

My goodness why would you do that .... and hang around this forum? Property (particularly residential) is a low yielding asset class. The return is just awful. It's only gearing ( bless them banks) , depreciation and neg.gearing against other income that turns it into a "thing of beauty".....Property without debt is like champagne without the bubbles, eggs without salt. LL

 

[roe]

My goodness why would you do that .... and hang around this forum? Property (particularly residential) is a low yielding asset class. The return is just awful. It's only gearing ( bless them banks) , depreciation and neg.gearing against other income that turns it into a "thing of beauty".....Property without debt is like champagne without the bubbles, eggs without salt. LL

That is one way of thinking and I leave it at that

 

[landlubber]

That is one way of thinking and I leave it at that

Clearly that is your option... but have you done the numbers? IF you're in residential (with no debt) you're probably getting around 4-5% gross rent less your expenses ( rates, insurance, repairs, vacancy factor, agents etc) which is probably reducing your nett nett return to around 2% ...and then you're paying tax on that income.

Easy peasy to use the same $$$ with a quality share portfolio ( banks,telstra etc) which will give you ca 5-6% dividends regular as clockwork plus franking credits which adds up to ca 7-8%. But the big difference is NO expenses.

So ...just some rough calcs ...it's like a 400% difference in your income....which I'm guessing is your focus if you're not geared.

Both asset classes have the same (roughly) long term CG.

Up to you ol' son !! LL

 

[devank]

If you are not making use of the the 'leverage' real estate gives then I don't see the point in staying in residential either.

 

[landlubber]

Exactly !

If you are not making use of the the 'leverage' real estate gives then I don't see the point in staying in residential either.

Exactly. That's the big one !! LL