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by Ray Jamieson
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ve.
Each of these methods has been around for quite some time and are not new to the industry. However, what is not generally known by the people you would regularly go to for advice is the list of pitfalls associated with each of them and how, where and with whom they are applicable and relevant. More importantly, where they should not be used!
The potential problems arise from the fundamental fact that if you use these strategies, you need to understand the implications of being 100% geared. That's right, in one form or another, you have borrowed 100% of the purchase price. There is NO LEEWAY for mistakes and if anything goes wrong, you can kiss your butt goodbye and often some of your other securities as well.
The buying price of the property, when purchased at your leisure, is MUCH HIGHER than the selling price if you have to unload it in a hurry. You need to follow the guidelines for property purchase outlined in the e-book to ensure you get it right. Follow the formula and you will generally be fine. Step outside and it's like walking around on a rope ladder - you are very close to the edge at all times. Having said that, I have NEVER bought property the traditional ways because these ways offer so much opportunity and profit potential!
In simple terms, the property has to pay for itself. If it doesn't, you are going backwards from the start. It cannot be a sound investment, whether you live in it or rent it out, if it costs you to own it! OK, I hear the negative gearing gallery screaming. Yes, in some cases there are tax advantages with interest etc on some negative gearing situatio |
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