Not quite. Don't forget rates, maintenance and building insurance.
Building insurance is optional when you have no mortgage.
Anecdote: Last time I sold I rang the insurer to give notice of termination of the insurance on the coming completion day. The girl I spoke to said "We can't do that, you'll have to get your solicitor to confirm to us after completion that it actually took place". I explained that I was instructing her to terminate the policy and no longer asking. She kept on refusing and I spoke to her supervisor who just backed her up and then explained that they had to protect the lender. I said "lender? what lender? I've never had a lender for this property!". He then said "What? No lender? No lender at all?" I said "yes". He then agreed to terminate the policy as instructed.
the moral is if you're an insurance clerk, her supervisor or anyone else who can't bite back (at risk of losing their job) don't mess with the mighty Turdberg
the moral is if you're an insurance clerk, her supervisor or anyone else who can't bite back (at risk of losing their job) don't mess with the mighty Turdberg
....ta for the feedback and confirmation that my posts here annoy you and schooner (and others). Good to know I'm meeting one of my prime objectives.
Oh, ok :rolleyes: So it costs about $70 a week Vs $400plus a week and increasing.
I am still $17k + a year better off by owning Not to mention CG and further use of site in the future.
Don't do a Rav on me. You were exaggerating the savings by omitting holding costs and you know it. Your point was valid without having to resort to such shennanigans.
IP portfolio that performs regardless of market movements!
Hi All,
With all the doom and gloom around, I thought I would share a way to structure your portfolio which will perform whether the market is falling/flat or booming!
As I have said previously, this is part of my risk mitigation strategy of buying properties with balanced growth and cash flow and tightening expenses.
My portfolio has grow from about $1m to about $5m in about 6 years based on this strategy.
The premise of this strategy is based on the following: 1. Buy in 5 major cities or larger regional (i.e. over 100k in the greater catchment) metropolitan areas 2. Buy with minimum of 7% yield with a view of increasing this to 9-10% in 2-3 years 3. Buy in areas with infrastructure improvements within 3-5 years 4. Diversify your portfolio around the country - to reduce risk as well as reduce any land tax liabilities 5. Balance between gorwth and CF - this the only optimum way to continue to grow your portfolio and your wealth in my opinion without significant risk
Having said that..some of your investments may not always getting growth or cashflow. Unfortunately, this is happening across 2 properties in Qld and 1 in Melbourne (though the CG has been fantastic). But this only represents less than 20% of my portfolio...but my overall portfolio is still CF.
So now down to the nitty gritty of my portfolio:
1. My existing portfolio is geared at an LVR of 37% (would like this to be 34%) this is despite me acquiring 3 properties this year for about 800k 2. The overall portfolio is returning 5.1% 3. The CF+ position once fully let (have 2 vacant due to reno) is around 3k per month 4. Equity has grown 420% over 6 years
My portfolio is structured in way it will perform whether the market is falling/flat (as it is now) or booming!
How is this possible? Well easy to see property performs in a booming market...so no explanation required. As for falling/stable market...see below...
I believe my portfolio will still perform in falling/flat market as rents and interests drop.
My current IR repayments are about 126k per year. The rents have been stable or slightly dropping in the last year.
Given that IR are about to drop (fixed rates have already dropped)...if my rates drop to an average of 6%....I will say about 30k in interest repayments. Further more I have started increasing rents by 5% which will bring about 7k in additional rent.
So my 36k positve income will become 72k per annum if additional rent and interest reductions are included. If I take 4k for additional increase in costs I am at 68k ...not bad!
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