How I increased my income

I am not sure you ever retire from investing. My mum is 74 and looking to buy another IP. Of course she doesn't have much cash, so it will be a cheapie in Adelaide. Investing is in her blood so she will invest even if there is not much to invest with.

 

Just secured this one off the market, I have a few handy contacts in Atlanta. It settles in 4 weeks time.

Its rent ready, around 1540 sq ft. This particular property is in a higher entry level subdivision and will rent for anywhere from $1195-1250 per month

The net yield is just over 9%

 

Nice post mtr

Other than obvious and common factors that affect real estate markets in Australia.

Are there any major differences or barriers for Aussies to invest?

Eg laws/regulations for foreigners to own
Differences in tenant /agent/insurance mindsets

 

Investing in US a totally different beast than Oz market.
Some pros and cons

Pay less tax
No stamp duty
No land tax
CGT can be deferred (rules apply)
No regulations for foreigners, anyone can buy
Easy to rent if you buy the right product
Cash flow from day 1


When I started investing in US in 2011 it was a very different environment from today. Tenants would skip paying rent.
I now have career tenants, the ones that never leave and pay rent on time... very nice. Good property management is key, and also hard to find. I have good PM in place.

Insurance more expensive, this property would cost around $450-500 pa, considering the property is under $100K, this is very expensive.

I pay county taxes each year, similar to our rates in Oz, this varies dependent on which State you invest in US, Atlanta taxes are reasonably low.

Hard to source finance in US for foreigners, these will be equity loans, not conventional loans.

There will always be more risk investing o/seas, risk vs reward needs to be weighed up.

MTR

 

Great post providing valuable guidance for a US investment

 

So after all the hassle of buying overseas and all the travel costs etc, you're only making about 10% p.a?

 

I’d like to consistently make 10%!

 

Making money is never a hassle, its fun.

So you have not read this.

US - Atlanta, GA - USA Property Investing

My income from USA is more like $170K pa and increasing.
Capital growth has not been mentioned but to date I have turned $500K cash into $2M since investing in USA.

The way the US property market is going I expect my capital to grow.

The idea is to continue creating cash flow and the growth is a bonus.

My question to you is how do you generate this type of cash flow in Australia with same amount of capital??

 

You can.....ya have to know how....harder for CF but CG not that hard.

 

talking income though.. not CG... sure we have had great markets in Syd and Melb even Perth......but unless you take your profits, sell down how do you increase your income??

When I was developing typical 4 townhouses I know I needed to sell 3 to generate an income of $10K pa.... now that is much more work than buying in USA

If anyone can give me an actual example of how they do this in Australia I am all ears, I will be the first to jump in, boots and all.

 

MTR..yes you can get these returns...but I would not want to do that just in one market.....having your income sources from just one source and one market is dangerous.

What happens when Atlanta like all other property markets moves outside of its cycle?

Anyway each to their own.....I for one want diversity of income.

To invest just for CF...over time can have issues.

 

I get it, investing in US is not for you.... fair enough, don't do it.
On the flip side I know at least 3 investors on PC that no longer need a day job due to income and growth they achieved with US properties.

Back to Oz market, who believes there are no risks in Oz market? Albeit property or shares?? No one has a crystal ball, regardless whatever the strategy...all we can do is manage the risk, protect capital

 

I agree.....but you can do the same here..the point is about diversification.

I lived in the USA for 5 years...their market has booms and busts...just like in any market you need to sure you get in low...and potentially get out before it busts. The market there is very different...land does not have as much intrinsic value.

In Australia the land has all the intrinsic value.

I prefer to balance net worth with income...and also diversify into other asset classes. I realise as I get older...that I don't want to be dealing with older properties into my late 60s and 70s...what is fun now...may not be so fun later on....thats all.

 

I get this

I have mixed it with developing in Australian markets.

I will do this again when the timing is right. For me its personally developing in OZ is way to risky at the moment. The numbers just don't stack up, profits are too skinny.

Who knows Perth next year, fingers crossed.

MTR

 

Yep....Perth may surprise people....a lot sooner than people think....2018 is when there will be direct flights to London?

 

I hope so
I think it has bottomed

 

easy 3 short term leasing apartments in Docklands will do for CF+ no CG though

 

Yep, there is a reason for no CG........ run

 

can't have everything in life though for the punter who no longer wants to invest - maybe worthwhile just for cashflow. better than dealing with junkie tenanats in low socio economic L suburbs.

 

Every time someone says they find it hard to deal with something i see $$$....