Building a Property Portfolio Impervious to Market Forces....

Thanks...I do all the research and make the decisons. Works well for me.

 

Hey @sash , I am willing to join your team and do the research, in case you are interested.
Hire some newbies in lieu of some tips.

 

• His approach is not possible unless you are on high income. The locations where he buys suggests his properties tend to be negatively geared (some possibly quite heavily negative)
• He tends to be a bit fast and loose with numbers. Funny because he used to be an accountant. He seems to base his projections on properties doubling every 7-10yrs and a year-on-year growth of 10%.

 

I watch his show on Foxtel. Always funny where they do the purchase or pass segment where it is usually an inner city eastern suburbs unit going for around 800k renting for $600 a week with strata 2k a 1/4. No doubt the CG is there but how many of those can you really hold On an average income?

 

He seems to base his strategy on capitalizing interest and pays for holding costs with new borrowings.
I would imagine he has cleaned up by purchasing inner Sydney properties in the last few years.
I'm not sure if the outcome using this method would be pretty in a falling market or with recent changes in borrowing capacity no matter what your income is.

 

Sash, this is a very good read. Thanks for sharing your knowledge and experience.

When you say you have 35% LVR and your strategy is Interest only and money in offset. Do you mean that you deduct the money in offset from loan amount hence creating a lower LVR? Or is it purely from capital growth (which means you do not take equity out to fund new purchase)?

 

Where do we get this education from Leo?

 

In my opinion:

1. Property books. Not 1 book, but a variety of them. Most of the newbie mistakes that are made are probably covered in 3-7 books.
2. Property articles in magazines
3. Property Chat has a vast amount of knowledge and experienced posters to draw knowledge from.

Those three points have more than enough knowledge to learn from to build many millions in wealth if you wanted to. All thats left is to add commitment and action.

That's all it takes. Its not complicated.

 

Yes that is correct. If I added the amounts in offsets..my LVR would be higher more like 47%

Having said that the amount going to offset as pure cash after paying all expenses and savings is in the order of 10-20k per month.

 

@sash that monthly 10-20k is purely from rent or including your massive PAYG?

 

@sash what is your end goal strategy ? Seems like you buy fairly neutral to positive cashflow houses ? I would like to get to your position, I'm 25 ATM 6 Ip's 2.2 mill worth, I would say about a middle income 125k per year. With your leverage so low wouldn't you be paying tax on your rents ? Positively geared ?

 

Wow in NSW that is middle income? I am on similar wage but I didn't feel that way until my wife stopped working haha.

 

Haha yeh when your on one income it hurts abit. I started earning that wage at 24years old but always been over a hundred since 21, but seems like a struggle to achieving my goals of retirement around 30 to 35 on that sort of wage

 

Yep about 80-100k positive...that why the depreciation from newer houses come in handy.

 

Both.....but about 50% is from rents...

 

Wow that is awesome! But with such a low leverage how do you manage to get depreciation still ? Wouldn't your portfolio be positively geared ? Congrats as well, that is a real accomplishment. Did you have a really high paying job to achieve this over the years ?

 

A good job definitely helps...but the more important thing is getting the balance between equity growth and rental income.

 

@sash, when you are available next time, I might need to let you do a portfolio health check for me.

 

Sure..

 

A lot of people ask you about exit strategy but wouldn't your current scenario ~10k per month positive be enough to sustain a retirement? That's not even touching your equity.