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Investments (pg. 3)
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| Lilith |
| quote: | Originally posted by pkcRAISTLIN
this is the only bit i didnt quite understand. why would you sell it if it wasn't costing you anything? why not leverage it to buy something else? |
Early on you have to be fairly aggressive in your purchasing, if you can find something for the right price, get it and then move onto something which is going to bring in a higher overall yield then you may as well cut and run onto the better option.
By all means use its net worth to get the better property, but its one of those things (unlike shares where you have to make a spot decision sometimes) you do get a bit of time to think about it. I maintain a couple of high appreciating, high demand rental properties simply for that reason, when I want to buy something which is a smaller investment I use them as collateral. Find something I think will make money, buy it and rent it out, if/when it appreciates I'll sell it for a profit and move onto something else.
But that's basically 'what I do' when it comes to a job and it also requires a volatile housing market to do a lot with. If you're in a sedentary market and have to work as well you're basically restricted to what it will hold up with and how much time you can invest into looking. |
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| jonSun |
| quote: | Originally posted by pkcRAISTLIN
:stongue: sorry, thats too funny. |
yeah it made me sick. I didnt want that much money sitting in one stock for a long time, so i knew i had to sell before it went lower, like it eventually did. |
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| Beat Blog |
| quote: | Originally posted by pkcRAISTLIN
no way! every little bit helps ;) |
Blergh.
I studied this briefly at university (not that that means much), and it's a load of rubbish.
Why would you intentionally make a loss on a property to avoid tax when you could make a profit, pay the tax, and still make some on top of your capital gain, rather than hoping for good capital gain whilst making nothing? |
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| Krypton |
| quote: | Originally posted by jonSun
It was sometime in may i think. I think it might have been $155 or $156. I sold 2 days later after it dropped about $8 a share. I had 110 shares too. :( |
Heh.. back in July 2007, I invested half my portfolio in EGY at $4.76. My investment strategy is to hold until my target price is reach (even if it takes years), but I still watch the stock move day after day. Well, not even a month after I bought my shares, the stock price dropped 30%. But you got to have a set strategy and stick to it no matter what. I had a long-term value strategy. I studied the company front and back, and I knew it was a good company. When it dropped 30%, I actually bought even more shares. I viewed it as a Christmas sale at the mall. Fast forward to June 2008, the stock price rose to almost $9, essentially doubling my money. I valued the stock around mid $7, so when it reached $8, I sold. This just reinforced my philosophy of paying no attention to the market. If i know my companies are run by competent management and has the financial data to prove it, market pops and drops don't bother me in the least bit. |
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| pkcRAISTLIN |
| quote: | Originally posted by Lilith
Early on you have to be fairly aggressive in your purchasing, if you can find something for the right price, get it and then move onto something which is going to bring in a higher overall yield then you may as well cut and run onto the better option.
By all means use its net worth to get the better property, but its one of those things (unlike shares where you have to make a spot decision sometimes) you do get a bit of time to think about it. I maintain a couple of high appreciating, high demand rental properties simply for that reason, when I want to buy something which is a smaller investment I use them as collateral. Find something I think will make money, buy it and rent it out, if/when it appreciates I'll sell it for a profit and move onto something else.
But that's basically 'what I do' when it comes to a job and it also requires a volatile housing market to do a lot with. If you're in a sedentary market and have to work as well you're basically restricted to what it will hold up with and how much time you can invest into looking. |
gotcha, that makes a lot of sense. me, im in it for the ultra-long haul. ie selling up around retirement age so i dont have to worry so much about my super contributions. thats what you get when youre a poorly paid lazy public servant :p
| quote: | Originally posted by Beat Blog
Blergh.
I studied this briefly at university (not that that means much), and it's a load of rubbish.
Why would you intentionally make a loss on a property to avoid tax when you could make a profit, pay the tax, and still make some on top of your capital gain, rather than hoping for good capital gain whilst making nothing? |
youre looking at it the wrong way. of course you want to make a profit on your investment. good luck finding a property you can rent for more than your mortgage cost. my latest purchase = $1700/month in INTEREST only repayments. and thats on a fairly low-priced house.
for me, negative gearing is a nice 30% rebate i get every tax year that helps me afford the investment in the first place. |
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| Beat Blog |
| quote: | Originally posted by pkcRAISTLIN
youre looking at it the wrong way. of course you want to make a profit on your investment. good luck finding a property you can rent for more than your mortgage cost. my latest purchase = $1700/month in INTEREST only repayments. and thats on a fairly low-priced house.
for me, negative gearing is a nice 30% rebate i get every tax year that helps me afford the investment in the first place. |
Exactly.
You're getting a tax rebate...yet losing money at the same time.
There are plenty of ways to make money on properties that don't involve conventional renting. |
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| pkcRAISTLIN |
| quote: | Originally posted by Beat Blog
Exactly.
You're getting a tax rebate...yet losing money at the same time.
There are plenty of ways to make money on properties that don't involve conventional renting. |
such as? im intrigued :) |
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| Lilith |
| quote: | Originally posted by pkcRAISTLIN
gotcha, that makes a lot of sense. me, im in it for the ultra-long haul. ie selling up around retirement age so i dont have to worry so much about my super contributions. thats what you get when youre a poorly paid lazy public servant :p |
Well you don't always have to be that but you appreciate the security of government jobs has a predictable paycheck... I went the other way around as a 'dirty yuppie' and worked myself stupid for about 10 years until I'm at the point now I have problems with fatigue, burnt out and have to stop (zee doctors orders!)
But I'm bouncing back and just taking things a bit slower. |
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| tubby |
move to england maybe? my sister's currently got 5 houses she rents out, rental income more than covers the interest only mortgage and outgoings, so just sit back and wait for appreciation.
or invest in blair athol and start a series of hydro farms |
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| pkcRAISTLIN |
| quote: | Originally posted by Lilith
Well you don't always have to be that but you appreciate the security of government jobs has a predictable paycheck... I went the other way around as a 'dirty yuppie' and worked myself stupid for about 10 years until I'm at the point now I have problems with fatigue, burnt out and have to stop (zee doctors orders!)
But I'm bouncing back and just taking things a bit slower. |
if you need any lessons in how to take things REAL slow, send me a PM! :p |
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| Beat Blog |
| quote: | Originally posted by pkcRAISTLIN
such as? im intrigued :) |
Subdivision, renovation, live there yourself etc.
However, in the case that it's a pure investment and therefore hard to do any of the above, there are still lots of properties that make money on rent almost immediately.
Or in some cases, repayments outweigh rent for the first few years, but as rent increases with CPI and the repayments lessen according to how much of the principal sum has been paid off, the rent comes to cover the repayments after a while.
There's nothing inherently wrong with losing money for a few years to eventually make it back down the line, but I hear about a lot of people who sell their properties the instant they start becoming profitable, because they don't want to pay the tax!
I want to move to Japan. The rates there are 1%! |
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| Lilith |
| quote: | Originally posted by pkcRAISTLIN
if you need any lessons in how to take things REAL slow, send me a PM! :p |
Nah, I'm working real hard on my 'bohemian adult' image right now :haha:
Least I haven't painted any walls burgundy yet but thats only because it wont match the furniture... |
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