Return on Investment Property

Edinburgh on 04/02/2021 - 22:27
Last edited 04/02/2021 - 22:28

Hey Ozbs,

I was just wondering why people buy investment property when it doesn't give such a good return on your investment.

I have around 100k as balance which I am thinking of investing in property. In probably that amount I could barely pay a 10% deposit for 2 bedroom unit + Stamp duty + LMI

When I see cash flow after paying Strata+ Council+Water. I am getting $50/week cash flow. After paying 30K in overheads like stamp duty and LMI, I may not be able to recover these in next 10 years.

Am I missing anything overhere?

I am using this to calculate https://www.homeloanexperts.com.au/investment-loans/property…

Financial

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  • Seraphin7 on 04/02/2021 - 22:39
    +14

    The game is capital appreciation.

    If you are looking at it from a yield perspective, there is simply no way that's where you'd put your hard earned.

    • ihbh on 05/02/2021 - 07:21
      +3

      The game is capital appreciation.

      The game was capital appreciation.

      No guarantee in future and unlikely at this level of prices (negative or sideways) for years.

      • inherentchoice on 05/02/2021 - 15:27
        +1

        Yep. Australia's population growth relies on immigration which is sluggish, or perhaps nonexistent right now. At present there is a net loss of population from NSW and VIC to QLD.

        • Some Guy on 06/02/2021 - 14:04

          What will happen to property prices and rents when the immigration tap is turned back on?

          • inherentchoice on 06/02/2021 - 16:26

            @Some Guy: Maybe the prices will be recovering from a huge crash by then.

            • Some Guy on 08/02/2021 - 09:49
              +1

              @inherentchoice: Just need a big event to cause the huge crash I guess. Worldwide pandemic big enough for you? Nope, that didn't even cause a little crash, much to everyones surprise.

              Increase in interest rates might soften the bubble rise but that's not happening without wage rise. And as we've just seen, the banks, and perhaps the gov, will do everything they can to ensure there's no huge crash.

      • ribze1 on 06/02/2021 - 21:15
        -1

        Agree. Yes prices have on average doubled in the past 10 years but it's not going to happen again.

        If you think the average Sydney home is going to be $2m in 2030 you are cooked.

    • ShoeJunkie on 04/02/2021 - 22:48
      +1

      This! Exactly this!

      If you play the yield game, then theoretically you are better off putting the same monies into a bond or a stock that provides you a dividend yield of 5%. There are plenty of real estate stocks that basically are indirect mechanisms to profit off the ongoing yield and capital appreciation.

      Having said that, if you think of the END game, which is to essentially sell it off eventually, the capital gains after 5-10 years alone will easily recoup your initial investment. Keep it longer (25-30 years) and depending on the area, it will either be somewhere in the 100 to 150% gain in return to your initial investment. That isn't even including the ongoing rental return.

      If you are looking at yield alone and not very keen on the longer term capital gains, I suggest you look at COMMERCIAL real estate. The rental is usually 2x the equivalent residential return within the same area and you end up long term (2 to 5 year) contracts between tenants.

      Just a thought really. YMMV

      • plmko on 04/02/2021 - 23:11
        +15

        Shares generating about 8% a year will get you 100% returns in 10 years with zero effort and can liquidate anytime. And that's with 8% but it's really not hard to achieve 15-20%.

        Property 99% of the time makes no sense. The grand majority here would never borrow money to buy shares but yet somehow our society thinks it's ok to borrow hundreds of thousands for a property investment. It's all very bizarre to me when.

        • arkie0 on 04/02/2021 - 23:32
          +3

          Depends on the shares, depends on the property.

          Shares on average have tracked on average 9% over the last 30 years.
          Property has on average tracked at 7% over the last 30. 8% for Melb and Sydney.

          • Ghost47 on 05/02/2021 - 10:50

            @arkie0: Costs of owning both need to be considered in those returns too. Owning and selling shares you might have to pay for a subscription to Sharesight, brokerage or an accountant to help you calculate taxes, owning property you’ll have insurance, maintenance, agent fees (if you go that route) etc. Not to mention a portfolio is much less time consuming to manage. Also people are disgusting, if you get bad tenants you’re going to be in very frustrating situation.

            In the Barefoot Investor he mentioned a couple of studies and over the past 100 years property has only gained <2%.
            Link to picture. Times could change though, growth is dependent on importing people and those people need somewhere to live.

            • arkie0 on 05/02/2021 - 11:28

              @Ghost47: I own both and yes property does cost a lot more to maintain. There's a lot of research/discussion out there and I'm not sure which is better, its easier just to diversify and get both.

              https://www.savings.com.au/home-loans/property-vs-shares-whi…

              Barefoot specifically chose a 100 year time frame, when land was hugely available, it's easy to pick a time-frame that suits your argument as the link above shows.

              • Ghost47 on 05/02/2021 - 12:53

                @arkie0: That’s a fair point about the timeline, hence why I said times could change.

                Personally property sounds like a PITA to maintain and I know how disgusting people can be. Would be nice but I’ll focus on a PPOR and portfolio of securities for now. Get rich the lazy way.

            • Bjingo on 05/02/2021 - 15:05

              @Ghost47: Damn that makes things look worse in perspective.

              Based on this: http://www.econ.mq.edu.au/__data/assets/pdf_file/0018/220581…

              The National median property price in 1999 was $141,079 (adjusting for inflation thats $241,852)

              https://www.inflationtool.com/australian-dollar (what i use to calculate the post inflation values)

              According to Corelogic the National Median was $583,157 in Jan 2021

              That means Property in the last 22 years has gained roughly 140% after adjusting for inflation.

              This would mean the property market fell around 110% between 1901 and 1999 then increased by about 112% to 2015 and then continued to increase to now.

              • Ghost47 on 05/02/2021 - 15:12

                @Bjingo:

                This would mean the property market fell around 110% between 1901 and 1999 then increased by about 112% to 2015 and then continued to increase to now.

                Hmmm that’s interesting. Thanks for those links I’ll have to read them sometime.

                You could probably find the studies from the Barefoot Investor online too, they’d probably go into depth about the calculations.

        • redfox1200 on 05/02/2021 - 10:05
          +2

          because you can't live in a share, a property isn't likely to go to $0.

          shares are volatile, so do you really want to be able to get a 90% loan on shares, where you could be down 300% on your investment on a down year.

          • whitelie on 06/02/2021 - 06:51
            +1

            @redfox1200: Who puts all their eggs in the one share basket?
            Shares are less volatile than property as the money can be spread over numerous companies. Why do most super funds leverage their investments towards shares and a much smaller percentage in property?

            • redfox1200 on 06/02/2021 - 07:58

              @whitelie: How much did the share market drop last year vs the property market?

              In my example i was just proving the point that you wouldn't take a 90% loan out against shares, even the asx200 index was down like 30% so at 90% you would have lost your 10% deposit + another 20% unless you were margin called.

              With property you can ride through any dip.

              • whooah1979 on 06/02/2021 - 08:27

                @redfox1200: The SPX closed 2020 with a reasonable gain. Not bad, but not great.

                https://dqydj.com/2020-sp-500-return/

                The S&P 500 Price index returned 15.76% in 2020. Using a better calculation including dividend reinvestment, the S&P 500 returned 17.88%.

                The XJO accounting is split into 19/20 and 20/21.

                • redfox1200 on 06/02/2021 - 10:49

                  @whooah1979: It doesnt matter where the year ended if your position was liquidated during the down turn.

                  I'm not advocating property over shares, just that there is a reason you can borrow more against a property than vs shares…

                  • whooah1979 on 06/02/2021 - 11:21

                    @redfox1200: How much can people borrow for real estate if they've $100k in capital and how much if they don't have an income? The former depends on their income minus expenses while the latter is zero.

                    Now ask the same question for someone that wants to trade equities or digital assets. The exchanges would be more than happy to provide xx (up to 125x) leveraged trading regardless of income.

                    Some people like real estate because they think that it is safer, tangible and a steady source of income. Others prefer more volatile investment instruments because it may give a higher return in shorter time frame.

                    • redfox1200 on 06/02/2021 - 14:07

                      @whooah1979: Yes i agree with this. But investing and trading are two different ball games, and if your trading at 125x your going to be wiped out.

                      I trade crypto and stocks as well as own property, so its good to have a diversified portfolio.

        • mrvaluepack on 06/02/2021 - 07:42

          People like the physical aspect of property and also the control they have over it.

        • ribze1 on 06/02/2021 - 21:10

          Agree with plmko.

          I don't understand the obsession with investment properties when compared to the share market, especially those wanting more than one.
          Ongoing costs, headaches potentially with tenants, agents, issues with the property. Shares have none of that.

    • Edinburgh on 04/02/2021 - 22:45

      What do you suggest Seraphin7

      • Seraphin7 on 05/02/2021 - 08:49
        +1

        What's the question?

  • mskeggs on 05/02/2021 - 07:49
    +11

    Where is the next doubling of house prices going to come from with wage growth stalled and interest rates effectively at zero?
    Genuine question, I can’t understand it.

    • stratbargain on 05/02/2021 - 08:44
      +6

      When I bought my first property 13 years ago people were saying the market was going to crash and I was crazy for spending $320k on a property in that area.

      When I bought my second property 10 years ago people were saying the market was going to crash and I was crazy for spending $640k on a property in that area.

      Both areas are now trending almost double what they were when I bought them. They are by no means flashy or exciting properties

      Now I'm in a position if I wanted I could sell both and have enough capital to buy a house in the 1.4-1.6m range with minimal mortgage repayments. A price that seems absolutely ridiculous to most people (including myself)…

      But for every person that can't pay a $800k loan as they are just getting into the market, there are plenty of people who have done crazier longer term investments in property than me and can easily afford 1/2/3 million dollar properties.

      TLDR there are a lot of people that have been invested in property for many, many years and once you're in the market you can easily afford to purchase more and more expensive properties, which drives prices up.

      • slow on 05/02/2021 - 09:35
        +4

        Agree 100%

        Like my friend who has been ready to buy a house since 15-20 years ago, but always waiting for prices to crash. Told me I was crazy to buy property. He is still waiting.
        The houses he nearly bought then have more than doubled in value

        Now it turns out I was just "lucky" to have got into the property market

      • Ghost47 on 05/02/2021 - 10:18
        +2

        Now I'm in a position if I wanted I could sell both and have enough capital to buy a house in the 1.4-1.6m range

        Is that a post CGT or pre CGT figure?

        People often say “I can sell for x capital gains” and that’s all well and good but costs of ownership really need to be factored in as well (if they haven’t been which I would think most people don’t consider when they say that kind of thing).

        • stratbargain on 05/02/2021 - 10:31
          +2

          Post CGT. Post agent commission etc etc.

          But you're right it can be a bit of a shock to people when they realise the true cost of selling an investment property

      • ihbh on 05/02/2021 - 09:06
        +1

        Excellent example of uninformed investors. What was the level of interest rates when you bought? What are they now? What are they likely to be in 5-10 years?

        • Donaldhump on 05/02/2021 - 09:11

          Prob -10 percent knowing the rba

        • stratbargain on 05/02/2021 - 09:40

          5.2% from memory and now 2%.

          I'm not suggesting it was a better investment than the stock market. All I'm saying is there are plenty of people investing in different ways that will continue to drive property prices up. I don't see them dropping anytime soon (if ever). For every person who is new into the market trying to buy, there are many who have years of investing and capital behind them.

          • ihbh on 05/02/2021 - 09:49

            @stratbargain:

            I don't see them dropping anytime soon (if ever)

            What if interest rates rise back to 5.2% or even higher? (Not in next 2-3 years, but after)

      • whooah1979 on 05/02/2021 - 09:01

        I bought my first property 13 years ago
        When I bought my second property 10 years ago

        People are always talking about real estate investments they started such and such time ago. Data shows that if they invested in other markets and hodl to today then their unrealized gains would have been higher.

        The 80s and 90s are long gone. The overseas smart money is flowing into more innovative investments where there are less government regulations.

        • Terbo on 05/02/2021 - 17:05

          Leverage and margin calls are the 2 factors that can differentiate actual dollar returns from RE VS Shares. 80% lend on property ok, shares not possible and market volatility can make it hard to avoid margin call on shares if holding long term, whereas bank is happy as long you pay home loan interest regardless of property spot value.

          • scanuck on 07/02/2021 - 08:18

            @Terbo: Same same no?

            You have an LVR with the mortgage - same as with a margin account.

            You pay off the margin loan as you would your mortgage interest.

            I suppose it may be true your shares could enter margin call territory with an obligation you can’t meet and a sell triggered - but you’d hope your investment was wise enough to not!

            All great discussion on here - good reading

            • Terbo on 12/02/2021 - 13:02

              @scanuck: Very broad example…
              You have $100K so you can buy a house for $500K, it goes up 20% / $100K in a few years, you make $100K and the bank doesnt care about the value of the house in the meantime unless you dont pay the loan. Or the value doubles in 10 years, you make $500K.
              You have $100K and you can buy shares for $200K, it goes up 20% / only $40K in a few years, but if the value of the shares falls from $200K to $100K in the meantime you may get a margin call and have to put in more money or sell the shares right when the value is low to meet the call. Value doubles in 10 years, you make $200K.
              Shares are more flexible, diversified and low cost to buy, run and sell, but also more volatile and less friendly for bank borrowing.
              Property is inflexible, concentrated, high cost to buy, run and sell, but can be less volatile and banks love it, supported by govt rules.
              Doing both smartly and consistently is the best way to make easy money over the long term.

              • scanuck on 12/02/2021 - 17:07

                @Terbo: Correct and agree - except for the missing scenario in which the house value drops (unlikely but possible)

                You’re still on the hook for an asset that is now worth less than you owe!

      • netjock on 05/02/2021 - 12:23

        Number don't make sense.

        $0.96m for both properties with average hold of 11.5 years.

        $800k mortgage assume at 6% average interest rate. Your mortgage balance would be $0.65m.

        Even if they are double the price you have $1.9m less $0.65m mortgage.

        Capital gains on $0.9m with 50% discount would be $450k at say 30% = $135k

        $1.9m - $0.65m - $0.135m = $1.1m

        You are still talking about $300k - $500k loan which isn't that far from some $800k to enter the market loans.

        Simple truth I have been trying to tell is. With property rising prices spread across the market and bidding up capital values with little regard for income is just bad news.

        If the only house you can afford you have two options:

        Pay $500k for it $100k deposit and $400k loan 3% $1,700 per month of after tax money.

        OR $1m house with $100k deposit (impossible almost) $900k loan 3% $3800 per month.

        $2,100 per month at 5% growth over 30 years is $1.7m

        Pay the difference into super or shares. I'd have a pot of money at retirement compare to just sitting on a big expensive house that banks won't refinance unless I take a vulture loan (reverse mortgage)

    • narbe on 05/02/2021 - 08:10
      +3

      Cheap money and more QE

    • modsec802 on 05/02/2021 - 08:04
      +2

      China

      • Ghost47 on 05/02/2021 - 11:21

        I spoke to someone once who said “You know what happens now is that Chinese buy the property and rent it out to Australians.” (They were Chinese and I think rented from a Chinese LL.)

    • netjock on 05/02/2021 - 12:02

      Genuine question, I can’t understand it.

      Initially negative interest rates. Literally you borrow $800k and buy the end of 30 years you have paid back $500k because the other $300k the bank paid you.

      Will get a big initial bump. Sydney should average $2m house prices but by the end of 30 years everyone would have paid back $1m because the bank paid the other $1m.

      Then everyone rejoice believe they have made $1m. Cash out and fight with all the other millionaires for scraps of $100k RAV4 hybrids.

    • [Deactivated] on 06/02/2021 - 22:46

      the price can double in ways that aren't shown on a simple graph.

      A house used to sit on 600-800 sqm of land, now a house sits on 350-400sqm.

      There is also the logic that owners set the price of rent. If there is no capital price growth, rent will be increased instead. This isn't as clear as the opposite isn't true - increasing prices do not command higher rents, and it is certainly possible for renting to be cheaper than owning - on a short term basis

      • mskeggs on 07/02/2021 - 08:40

        If you own an investment property, can I suggest you set the price of rent higher by $100 a week and let me know how the owner setting the price of rent to make up for slower capital growth gets on.

        • [Deactivated] on 07/02/2021 - 08:42

          It won't happen in the short term, I already covered that. No need to be obtuse.

          How do rents rise? Or do they never rise in your world?

          • mskeggs on 09/02/2021 - 16:26

            @[Deactivated]: Rents rise with wages, given stable supply and demand. They fall when there is unemployment and lack of demand (no international students).
            They can't exceed wage growth because they already comprise a large proportion of income for the average renter, on below average incomes.
            Renters can't put off paying market costs till the future like an investor might choose to do.

      • netjock on 08/02/2021 - 14:07

        A house used to sit on 600-800 sqm of land, now a house sits on 350-400sqm.

        Also look at new builds on those new 400sqm blocks vs 1970s - 1980s brick veneer houses, at least twice as big.

        There is also the logic that owners set the price of rent. If there is no capital price growth, rent will be increased instead.

        Yes, those are the people who also overlook price increases are actually a function of low interest rates not increase in rental yields and prices will keep on going up at the same pace while interest rates won't be going down at the same pace.

        I wouldn't been too worried about interest rates going up. Reason is because people are basically loaded up with debt and tapped out their disposable income.

  • deme on 04/02/2021 - 23:44
    +3

    Do you own your own house?
    No -> get your own place first

    • Edinburgh on 04/02/2021 - 23:56

      Do you mean, put all money in the primary loan and never redraw?

      • deme on 05/02/2021 - 00:31
        +1

        I mean own (not the bank) your first property first.

        • Donaldhump on 05/02/2021 - 01:00
          +4

          Why would you do that, let the bank own and invest the cash elsewhere.

          Bank loan 1.89 percent , any etf 4 percent plus growth.

          • deme on 05/02/2021 - 08:53

            @Donaldhump: What's your return on property?

            • Donaldhump on 05/02/2021 - 09:10

              @deme: I live in my property

              • deme on 05/02/2021 - 09:30
                -2

                @Donaldhump: Why are you telling people to invest in property if you don't do it?

                • Donaldhump on 05/02/2021 - 11:34
                  +1

                  @deme: I'm not, I'm saying to borrow against your property to invest in shares.

                  I'm saying your comment to " mean own (not the bank) your first property first." is pretty ignorant to give, given the low interest rate environment.

                  mortgage 1.89%

                  etf dividends 4-5% fully franked.

                  • deme on 05/02/2021 - 12:27
                    -1

                    @Donaldhump:

                    I'm saying to borrow against your property to invest in shares.

                    Where in this thread did you say that?

                    • Donaldhump on 05/02/2021 - 13:01

                      @deme: "Why would you do that, let the bank own and invest the cash elsewhere."

                      elsewhere being any where else that can generate more wealth than 1.89% for example

                      what you are saying is ignorant to own your own home and not borrow against it as a blanket rule, is ignorant.

                      good bye

                      • deme on 05/02/2021 - 13:03

                        @Donaldhump: Ah my bad I misinterpreted what you meant by that.

                • netjock on 05/02/2021 - 14:50
                  +1

                  @deme: The Donald doesn't invest his own money. He invests other people's money.

                  If you win Donald gets his cut, if you lose Donald gets his cut. Donald can't lose. Just don't talk about Trump Taj Mahal Atlantic City.

                • whooah1979 on 05/02/2021 - 09:50
                  -1

                  @deme:

                  I live in my property

                  Donaldhump is living in their own asset.

  • whooah1979 on 04/02/2021 - 22:48
    +2

    $50/week cash flow.

    $50 p/w + tenants from hell. 😆
    https://www.ozbargain.com.au/node/602237

    • Ghost47 on 05/02/2021 - 10:04

      Sounds like fun.

  • netjock on 04/02/2021 - 22:56
    +1

    Don't forget $50 cash flow but because the tenant is paying more than just interest you will end up with a tax bill at the end of year. Principle repayments are not tax deductible.

    Correctly above is live with poor cash flow with the hope that when you sell in 10 years+ there is a massive capital gain to make it all feel worth it, provided you walk away and never try to buy back in because the whole street would be similar priced unless you want to buy somewhere less desirable.

    Property is the closest thing to helicopter money from the government as you can get. Provided you are one of the 70% that can afford to own one the prices go up pretty uniformly in your suburb and surrounding suburbs. Just don't try to compare with those more fortunate than you else you might feel a bit left out.

    Just don't tell people how bad the cash flow situation is at dinner parties. Just tell them how much it has gone up and how many investment properties you have.

    • nhylated on 04/02/2021 - 23:09
      +3

      Just don't tell people how bad the cash flow situation is at dinner parties. Just tell them how much it has gone up and how many investment properties you have.

      It all makes sense now. No wonder nobody ever talks about cashflow when discussing their IPs.

    • redfox1200 on 05/02/2021 - 10:13

      cash flow is bad for the first few years, but at the end of the day in 10 more years my properties will be paid off by the tenants, so i will have that capital, plus the income from that capital.

      so not bad turning 100k of deposits and initial negative cash flow over 10 years into 800K plus 30k of income, not including any additional growth in property prices or rental income over the next 10 years.

      • whooah1979 on 05/02/2021 - 10:26

        so not bad turning 100k of deposits and initial negative cash flow over 10 years into 800K plus 30k of income

        This sounds like you're predicting that your asset will 7x in 10 years. Could you please explain the math behind this gain?

        • redfox1200 on 05/02/2021 - 13:09

          No, thats assuming 0% asset growth, just the rental return will pay the loan down to $0 over the next 10 years, i've already had the properties for 10 years.

          • whooah1979 on 05/02/2021 - 13:24

            @redfox1200:

            I've already had the properties for 10 years.

            You left out the most important variable from your first post.

            OP is starting from scratch with $100k. They may statistically get a higher return using other investments instruments over the next 10 years than if they were to invest in real estate.

            • netjock on 05/02/2021 - 14:48

              @whooah1979:

              No, thats assuming 0% asset growth, just the rental return will pay the loan down to $0 over the next 10 years

              It isn't a capital gain. That is just paying your principle. If I get dividends from shares I call it a capital gain or a special dividend which is return on capital I call a capital gain too.

              In fact my salary is a capital gain.

      • Ghost47 on 05/02/2021 - 10:51

        Not including monetary and time costs of owning the property either?

        • netjock on 05/02/2021 - 14:46
          +1

          Even 10 years ago what would 2 x $30k deposits get you? Even on 10% deposit it would have been $600k of property. The story just keeps on getting better and the numbers just don't stack like Enron or Worldcom.

        • redfox1200 on 05/02/2021 - 13:10

          2 x 30k deposits + 40k over the last 10 years for maintenance, and filling the gap between rent and mortgage payments.

          All positively geared now.

      • netjock on 05/02/2021 - 11:58

        cash flow is bad for the first few years, but at the end of the day in 10 more years my properties will be paid off by the tenants, so i will have that capital, plus the income from that capital.

        Hmmm you ever looked at a loan amortisation calculator? If your repayments are $2k now at 2% and interest rates don't rise it is $2k of monthly payments until end of term (20 to 30 years). If your rent is less than $2k, yes it might rise over time but I am pretty sure it won't be significantly over your repayments for at least 10 years (assume 3% inflation).

        but at the end of the day in 10 more years my properties will be paid off by the tenants, so i will have that capital, plus the income from that capital.

        Think that sounds like a double dip. You are getting the income from the capital right now except 80% of it is provided by the bank.

        so not bad turning 100k of deposits and initial negative cash flow over 10 years into 800K plus 30k of income, not including any additional growth in property prices or rental income over the next 10 years.

        So 100k deposit on a $500k property given $30k income is like 6% gross return on residential (tell us all where as most people are getting 3%) then you are going to pay off $400k over 10 years, so tipping extra money in. Somehow this $100k deposit is going to turn into $800k.

        Your math explains why so many people are buying property because they can't see the flawed assumptions.

        • redfox1200 on 05/02/2021 - 13:15

          6% gross now, wasn't when i bought. Now the rental income covers the mortgages 100% plus 10k left over, which still goes into paying down the mortgages. I've already had them for 10 years, so im not paying 400k over 10 years.

          • netjock on 05/02/2021 - 14:44

            @redfox1200: You know on the internet anything is possible. It is just that when you meet up with people who are good with numbers then the numbers just don't lie.

            • redfox1200 on 05/02/2021 - 20:57

              @netjock: Cool story. Yeah im pretty bad at math. But atleast all my investment properties will be paid off in 10 years.

              • netjock on 05/02/2021 - 22:06

                @redfox1200:

                But atleast all my investment properties will be paid off in 10 years.

                You make it sound like paying it off over 20 years instead of 25 or 30 is some kind of achievement.

                • redfox1200 on 06/02/2021 - 06:00

                  @netjock: Yeah i guess its not really an achievement to have someone else pay your house off. I dunno what i was thinking.

                  • netjock on 07/02/2021 - 08:26

                    @redfox1200: Like you are the only one. You got on the podium yet?

                    Achievement is getting someone else to pay off your PPOR.

                    • redfox1200 on 07/02/2021 - 09:09

                      @netjock: PPOR is already paid off lol

                      • netjock on 07/02/2021 - 09:11

                        @redfox1200: Not by someone else. You are just like rest of us.

                        In fact pretty stupid to pay of PPOR when you can get 3 years fixed rates at 1.99% and the ASX index is pay 2.8% plus franking credits.

                        • redfox1200 on 07/02/2021 - 09:56

                          @netjock: lol i make like 5%-10% a week from trading. I wouldn't get out of bed for 2.8% 🤣

                          • netjock on 07/02/2021 - 12:13
                            +1

                            @redfox1200: Here we go. The stories just keep getting better.

                            2.8% and won't need to get out of bed vs getting out of bed. You can't tell the difference between apples and oranges can you.

                            • redfox1200 on 07/02/2021 - 13:44

                              @netjock: No im saying its not worth my time for 2.8%, my trading account is up 250% since november and my crypto account is up over 400%

                              Sorry i dont trade apples, but i do trade orange juice.

                              Honestly don't care what you think really lol. But i can almost guarantee that i will be paying more tax this year than your net worth 😉

                              But enjoy your 2.8%

                              • netjock on 07/02/2021 - 15:46

                                @redfox1200: You know you care. Else you don't have to beat on about it.

                                • redfox1200 on 07/02/2021 - 16:57

                                  @netjock: you're the one that can't handle getting my houses paid off over 20 years, which is not suprising if you are only earning 2.8% on your money plus franking

                                  • netjock on 07/02/2021 - 23:33

                                    @redfox1200: For someone making 1000% a year you are awfully desperate to save a few dollars on Ozbargain.

                                    And getting a bit shirty with us mortals. Billionaires like you are obviously not here giving good free advice.

                                    • redfox1200 on 08/02/2021 - 07:04

                                      @netjock: Well I didn't get to be in the 1% from frivolous spending.

                                      Not sure if you know how volatile the markets are at the moment. But your wasting opportunity trying to get only 2.8% at the moment.

                                      But good luck, no need to keep responding.

                                      Oh and you were right about my investment properties, i forgot i paid an extra 60k off each of them last year from cash lying around happy now?

                                      • netjock on 08/02/2021 - 08:15

                                        @redfox1200: How someone who can't find better returns on cash than paying off 2.5% mortgages.

  • vince088 on 04/02/2021 - 23:40
    +1

    similar situation to you, look on what to invest on.. keep seeing people recommending shares, ETF, vanguards or IP

    for IP the end game goal is capital growth? is it not?

    • Edinburgh on 04/02/2021 - 23:52
      -5

      Vanguard ETF gives ~3% which will be 1.8% after tax. Less return than being in offset account.

      • deme on 05/02/2021 - 00:31
        +1

        VAS with dividend reinvested is 9.49%pa on average
        Dividends are income but the ETF is capital growth.

        • netjock on 05/02/2021 - 12:00

          Just tell them it doubles every 7 years. People will pile in. Like they do with property. You can't explain compounding, people can't follow and start getting nasty.

        • vince088 on 05/02/2021 - 16:50

          any advice now how I may start? where do I go buy them? website or app?

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