thecrashingisles Posted February 22, 2012 Share Posted February 22, 2012 Project engineer Emma Challands would like to be in a position to retire before 40. That doesn't necessarily mean she will - she loves her job in building and is studying for a masters in construction management to further her career - but her financial goals are clear.''In a nutshell, my plan over the next 10 years is to buy basically two properties every year,'' she says. She already has one investment property and is looking at buying another in the middle of next year. Emma plans to sell half her portfolio of properties as she goes, to pay off debt and use the rent as a passive income stream. You can read about her progress here mypropertyjourney.com/about/. ''I think the main reason I got interested in property was my dad does development as a bit of a hobby,'' she says. Developing might be on the cards but for now Emma wants to know if her income-based strategy will work. ''My main focus is the western suburbs of Melbourne - still in close proximity to the city but obviously a lot lower in price,'' she says. http://smh.domain.com.au/real-estate-news/a-plan-to-climb-the-property-ladder-20120220-1tihy.html Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted February 22, 2012 Share Posted February 22, 2012 http://smh.domain.com.au/real-estate-news/a-plan-to-climb-the-property-ladder-20120220-1tihy.html So.. every household in Australia will own 10 properties. They'll all be rich! Quote Link to comment Share on other sites More sharing options...
tomandlu Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? Why not just buy less of them? I can't work out how that benefits her in either a rising or falling market, but then I'm a bit thick... Quote Link to comment Share on other sites More sharing options...
Tonkers Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? Why not just buy less of them? I can't work out how that benefits her in either a rising or falling market, but then I'm a bit thick... Perhaps she is thinking that she doesn't have to pay the free bank money back and will get to keep the cash from the sold properties? Quote Link to comment Share on other sites More sharing options...
billybong Posted February 22, 2012 Share Posted February 22, 2012 (edited) Maybe to minimise/avoid capital gains?? In the UK I think you can buy/move to a new home and providing you sell your old home within 2 years? you don't pay capital gains - or at least it used to be something like that. So if she's buying 2 properties per year and selling 2 properties per year then over the years she'll always have one home and one "investment property"? In a falling market the idea seems chock full of risks and then there's all the fees. Edited February 22, 2012 by billybong Quote Link to comment Share on other sites More sharing options...
Nationalist Posted February 22, 2012 Share Posted February 22, 2012 How nice for her tenants that she's already planning to sell from under them... Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 22, 2012 Share Posted February 22, 2012 How nice for her tenants that she's already planning to sell from under them... how ill she sell if everyone else is buying up and getting in on it?...she be selling up her ticket for the last boat to leave the harbour...and she certainly wouldnt want to miss the boat. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 22, 2012 Share Posted February 22, 2012 So.. every household in Australia will own 10 properties. They'll all be rich! Australia is an upside down world. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted February 22, 2012 Share Posted February 22, 2012 Project engineer... That's where I stopped reading. What is it with project engineers? I've met so many I wouldn't trust to tie thier shoelaces let alone let them loose on an engineering project. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 22, 2012 Share Posted February 22, 2012 That's where I stopped reading. What is it with project engineers? I've met so many I wouldn't trust to tie thier shoelaces let alone let them loose on an engineering project. all middle management layers seem to be about the same, irrespective of industry or sector Quote Link to comment Share on other sites More sharing options...
blackgoose Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? Why not just buy less of them? I can't work out how that benefits her in either a rising or falling market, but then I'm a bit thick... She wants to buy 2 a year and sell 1 a year. As she will be such a canny investor and skilful developer she will be able to make money by buying houses that some people dont want. All she will have to to is buy one at an auction, give it a lick of paint and then the suckers will be lining up to buy or rent! Quote Link to comment Share on other sites More sharing options...
zugzwang Posted February 22, 2012 Share Posted February 22, 2012 It only works if Benny, Mervo, 'Chairman Who' et al. can exponentially leverage the debt-carrying capacity of the ChiCom economy. Without the communists Australia is a dying, waterless skid-mark 5,000 miles from civilisation. Aussies should take the Union Jack off their flag and put a big yellow ring on there instead. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted February 22, 2012 Share Posted February 22, 2012 Why doesn't she buy four a year and sell two? It would double her passive income. Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? Why not just buy less of them? I can't work out how that benefits her in either a rising or falling market, but then I'm a bit thick... 20 year mortgages. Sell half at the end of 10 years and use equity from those to pay off outstanding mortgages, leaving the other half that she kept free and clear of debt. It works provided prices and rent dont drop and interest rates stay low. Quote Link to comment Share on other sites More sharing options...
frederico Posted February 22, 2012 Share Posted February 22, 2012 just as well nobody else had this idea Quote Link to comment Share on other sites More sharing options...
KingBingo Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? She thinks propwertee is going to double every couple of years, so by selling one she gets the other debt free. Why not, it worked for her dad. Quote Link to comment Share on other sites More sharing options...
thod Posted February 22, 2012 Share Posted February 22, 2012 What's the deal with selling half the properties as she goes? Why not just buy less of them? I can't work out how that benefits her in either a rising or falling market, but then I'm a bit thick... Put 10k down on a 100k house (10%). Let it rise to 112k and sell. You repay the 90k leaving you 22k. Put down 11k on 2x 112k houses (~10%). Its margin trading. The problem comes when the market turns against you, you get wiped out. This is why you do it with borrowed money whilst squireling away cash. When prices fall its the banks problem (who get wiped out sans bailout). Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 22, 2012 Share Posted February 22, 2012 (edited) Put 10k down on a 100k house (10%). Let it rise to 112k and sell. You repay the 90k leaving you 22k. Put down 11k on 2x 112k houses (~10%). Its margin trading. The problem comes when the market turns against you, you get wiped out. This is why you do it with borrowed money whilst squireling away cash. When prices fall its the banks problem (who get wiped out sans bailout). like the HUTH people, you forgot fees, taxes and interest costs. EA fees in the Oz are between 2 and 3%. Edited February 22, 2012 by Bloo Loo Quote Link to comment Share on other sites More sharing options...
macca Posted February 22, 2012 Share Posted February 22, 2012 Do these people think they are going to live forever or something? This world is getting more and more like the movie 'They Live' by the day. Quote Link to comment Share on other sites More sharing options...
thejaksie Posted February 22, 2012 Share Posted February 22, 2012 this is a very innovative idea indeed. however I've come up with an even more brilliant plan: I will buy 2 houses in the first year, 4 in the next, 8 in the year thereafter, and so on. This means that in 23 years from now when I retire I will own all house in Australia (7,144,096)!! Quote Link to comment Share on other sites More sharing options...
bmf Posted February 22, 2012 Share Posted February 22, 2012 Where is the sense that even if this plan worked, it's of no value to humanity? Headstone: here lies a woman who did nothing. Quote Link to comment Share on other sites More sharing options...
Diver Dan Posted February 22, 2012 Share Posted February 22, 2012 Doesn't matter ... house prices double every seven years. But she's not doing it for the money. She's doing it for the lifestyle. Quote Link to comment Share on other sites More sharing options...
maffo in oxford Posted February 22, 2012 Share Posted February 22, 2012 (edited) Without the communists Australia is a dying, waterless skid-mark 5,000 miles from civilisation. Aussies should take the Union Jack off their flag and put a big yellow ring on there instead. At least they are fundamentally better off than the UK, if only for all the stuff that can be dug up & sold. Edited February 22, 2012 by maffo in oxford Quote Link to comment Share on other sites More sharing options...
thejaksie Posted February 22, 2012 Share Posted February 22, 2012 At least they are fundamentally better off than the UK, if only for all the stuff that can be dug up & sold. That's why this time it really is different Quote Link to comment Share on other sites More sharing options...
Saberu Posted February 23, 2012 Share Posted February 23, 2012 I'd be interested to know what the numbers ARE actually like for BTL in our high cost economies. I have a feeling they are very much in the landlord's favour as renters pay off the capital on the mortgage then landlords top it off with presumably interest payments? Obviously depending on the rent vs mortgage but assuming the price is reasonable and not inflated. I'm not saying I support it, but that maybe this is an immoral practice that people are basically taking advantage of the artificial supply shortage and landlording it over their fellow man. Quote Link to comment Share on other sites More sharing options...
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