Strategy 2 works even faster if you buy your 2 properties side by side with the ability to subdivide the land. This will allow you to keep both your properties and use the funds you make from the subdivision to pay off your loans. Then when you retire you can borrow against the properties and use the rent to service the loans. This will allow you to have an income stream that is tax free. Leave the properties to your favourite child and they can sell off one to pay off the other and no one pays capital gains tax. You can see how the wealthy who own large amounts of assets don't pay tax as long as you don't sell anything and borrow against what you have.
Ravi, could you go down this path with a current home loan (owing two thirds of value of the home), a healthy income between a couple but we have a car repayment? Thanks
Holding costs is much more than the banks repayment. You didn't mention council rates, insurance, property management expenses, unexpected repairs, and maintenance, higher bank rates for 90% LVR, LMI, capital gains tax, so that it only covers 1/4 of the loan, the list goes on.
dont list those, he wont get any buyers with those additional fees lol. He is trying to get a fee for selling you the dream. That good why doesn't he do it himself and retire instead of you paying a fee for his advice?
Be careful having multiple interest only loans, since they aren't usually for the full term of the loan. If markets change and you cant refinance you might suddenly have a bunch of P & I loans that you can't afford.
negative cashflow realistically is a lot more (you said up to $150 a week it is up to $500 a week) given the 6+% interest rates & crazy maintenance costs. Otherwise good video
Hey, I’m new to real estate investing in Australia and have a question about borrowing power when buying your 2nd, 3rd or 4th property. Doesn’t the outstanding debt affect your ability to borrow for buying an investment property?
But your debt in 5 years is not going to stay the same in 15 years because the longer you take to pay off your debt, the higher interest payment is going to be. For example, at the current interest rate, you will have to pay 1.2 mil interest to borrow 1 mil from the bank in 30 years but if you pay it off in 10 years, that interest is only 400k which means you save 800k in interest
That’s the problem with all the you tubers, all they do is push their own agenda, he is clearly just trying to push his buyers agency. It’s a classic case of if it’s too good to be true it probably is. Don’t get me wrong the system that he is implementing does work but just not in the time that he is claiming. He is well aware of capital gains, agent fees, inflation, holding costs etc but won’t tell you that as “he isn’t a financial advisor” but will happily tell you about his buyers agency.
Would be good to see a vid like this but adjusted for inflation. Like using 2.5% inflation, 100k in 30 years is about 47k in today’s money.
Strategy 2 works even faster if you buy your 2 properties side by side with the ability to subdivide the land. This will allow you to keep both your properties and use the funds you make from the subdivision to pay off your loans.
Then when you retire you can borrow against the properties and use the rent to service the loans. This will allow you to have an income stream that is tax free. Leave the properties to your favourite child and they can sell off one to pay off the other and no one pays capital gains tax.
You can see how the wealthy who own large amounts of assets don't pay tax as long as you don't sell anything and borrow against what you have.
Ravi, could you go down this path with a current home loan (owing two thirds of value of the home), a healthy income between a couple but we have a car repayment?
Thanks
Thanks for sharing your knowledge with us👍
Holding costs is much more than the banks repayment.
You didn't mention council rates, insurance, property management expenses, unexpected repairs, and maintenance, higher bank rates for 90% LVR, LMI, capital gains tax, so that it only covers 1/4 of the loan, the list goes on.
dont list those, he wont get any buyers with those additional fees lol. He is trying to get a fee for selling you the dream. That good why doesn't he do it himself and retire instead of you paying a fee for his advice?
All tax deductible
How do you address loans that come off interest only periods into P&I? You are missing this.
Be careful having multiple interest only loans, since they aren't usually for the full term of the loan. If markets change and you cant refinance you might suddenly have a bunch of P & I loans that you can't afford.
negative cashflow realistically is a lot more (you said up to $150 a week it is up to $500 a week) given the 6+% interest rates & crazy maintenance costs. Otherwise good video
My interest is 8.7% and im neutral geared after tax return.
Once my credit rating is fixed and I get around 6% im gona be cheering 🎉
@@josesworld419 which. state, suburb and property type?
Great video👍🏽
You forgot to factor in maintenance cost and other overheads.. then there is also capital gain tax to consider. Trust me its not that simple
Love this
Hey, I’m new to real estate investing in Australia and have a question about borrowing power when buying your 2nd, 3rd or 4th property.
Doesn’t the outstanding debt affect your ability to borrow for buying an investment property?
Yes
But your debt in 5 years is not going to stay the same in 15 years because the longer you take to pay off your debt, the higher interest payment is going to be. For example, at the current interest rate, you will have to pay 1.2 mil interest to borrow 1 mil from the bank in 30 years but if you pay it off in 10 years, that interest is only 400k which means you save 800k in interest
Have you factored in inflation and how it would erode the purchasing power and therefore debt in relative terms
99% of banks wont let you borrow the 2nd or 3rd house +, servicing the loan?
I have 5 rental loans - 3 mine. 2 my wife and she has primary. Easy.
Fantastic video, so articulate too!
What about capital gains tax?
Yep
Yeh and agent selling fees plus holding costs rates etc
That’s the problem with all the you tubers, all they do is push their own agenda, he is clearly just trying to push his buyers agency. It’s a classic case of if it’s too good to be true it probably is. Don’t get me wrong the system that he is implementing does work but just not in the time that he is claiming. He is well aware of capital gains, agent fees, inflation, holding costs etc but won’t tell you that as “he isn’t a financial advisor” but will happily tell you about his buyers agency.
What about capital gains tax Ravi?
Agreed you are better than pk Gupta
Raaaaaaaaavi 😂😂😂😂😂
Totally unrealistic. Find me a house in a good quality area for $500k
Heading should say $100,000 in 20 years
We find multiple properties around $500k weekly through our buyers agency. We have recent purchases and results on our instagram page :)