I can pay off my house in 4 years pretty much on poor blokes wage! - Page 2

**ebxr8240** · 10-09-2010, 02:50 PM

Good on ya...Obviously your glass is 3/4 full ..
Unlike BA which is 1/4 M/T..

BTW if theres C.G on the land ?? Then surely you can claim expenses like land rates etc ?? An accountant would know that ????

Sprint347 · 10-09-2010, 03:08 PM

Rather than deficate on BA Falcon perhaps listen to some advice that would otherwise cost you a large amount of money to hear in consultation.

GT0132 · 10-09-2010, 03:28 PM

Quote:

Originally Posted by EDManual

I am pretty wrapped with how things have turned out I must say!
Get this :

I am on a measly $35 grand a year, and am able to pay off my house after 4 years with a wife (doesn't work) and a kid, and we havn't had a budget or been careful with what we spend! Or tried to pay off the loan.(just paying interest only, with a bit more here and there when I can)

I bought a subdividable block in 2004 for $85000, build a house for $125000 on one side of it in 2006. Subdivided for about 10ish grand. (had a loan of 180,000ish at that point)
Now its 2010, have a loan of 165000ish, house is going on the market for 330,000. If I was to quickly sell it for say 310,000 I'll have $145000 cash to spend on another house on the block next door that would be fully owned! worth about $330-350000!

How about that! :-D!

And some people complain about low wages!... We go to France every 2 years too.

Thats great. However the fact you have done OK is not really related to your income but more because of the wise purchase you made back in 2004.

What is a remarkable achievement, however, is that between 2004 and 2006 you managed to pay out a total of $135k ($10,000 in subdivision costs and $125,000 home building costs) by only borrowing another $95 grand - which means you effectively saved cash of $40k in two years while paying a mortgage.

Assuming $35k is your current income, with CPI at an average of 3% p.a over the past 6 years, I take it that your income between 2004 and 2006 was around $28-30k. Now with a $85k mortgage back then, at a then variable interest rate on home loans at 7.5%, you would have been paying $6,500 p.a in interest . Deduct that and the $20,000p.a savings from your $30,000 p.a income leaves you with $3,500 to live on for the entire year without even considering tax, rates, water, phone, let alone food and other bills, so what's your secret?

Great achievement BTW , I take my hat off...not sure why BAFalcon has come down on you hard.

fte50 · 10-09-2010, 03:37 PM

Gentleman you MUST be in debt to achieve - Whilst cash (cesh) is king, the days of saving for it are gone - i mean the growth rate far exceeds the savings time frame.
Go in hard today, and once you look at it tomorrow you feel u bought a bargain.

ED manual - good outcome although next time around purchase a property in a location that will give you the same return without the subdivision headache. Thats the key to money for jam.....(not all will agree though) Its whats right 4 u.
Goodluck

deesun · 10-09-2010, 03:50 PM

Quote:

Originally Posted by Sprint347

Rather than deficate on BA Falcon perhaps listen to some advice that would otherwise cost you a large amount of money to hear in consultation.

It's not what he said it's the way he said it. He could have imparted his knowledge at least in a way that gave some credit to ED Manual for his hard work and desire to achieve. Maybe with a little more advice ED may be able to do better but most people his age are sitting on their posterior at the pub whinging about how hard done by they are.

zdcol71 · 10-09-2010, 03:55 PM

Quote:

Originally Posted by Sprint347

Rather than deficate on BA Falcon perhaps listen to some advice that would otherwise cost you a large amount of money to hear in consultation.

Totally agree, his comments came across very constructively....and very cheap!!

zdcol71 · 10-09-2010, 04:08 PM

Quote:

Originally Posted by deesun

It's not what he said it's the way he said it. He could have imparted his knowledge at least in a way that gave some credit to ED Manual for his hard work and desire to achieve. Maybe with a little more advice ED may be able to do better but most people his age are sitting on their posterior at the pub whinging about how hard done by they are.

Don't get me wrong, good on him, but tell me how BA did impart his knowledge; everybody doesn't need to see feelgood group hugs to pass on some knowledge... and I have just read the thread again and just curious to know how you know his age? (but most people his age are sitting on their posterior at the pub whinging about how hard done by they are.)

EDManual · 10-09-2010, 04:16 PM

Thanks for the comments, I will try and be a bit more clear just for your interest:

OK, so I bought a block for 85000, had about a 25-30 grand deposit in 2004 so didnt pay mortgage insurance. had a loand of 55000, then got a house for 125000 in 2006, land had gone up so didnt have to add to the deposit to get a bigger loan. So thats about a 180000 loan (they lent me 210000 but didnt use it all). Over the years its gone down a bit, now at about 165000, but am only paying interest only, and put the rest in offset type accounts. Thats where money I need comes from for things like bi annual european holidays..(my wife is french). And thats about it, apart from recently subdividing.

Now the house can go on the market for 330,000, which would pay out the loan and leave (at that price) 165000 - selling expenses etc. or if I get less for it. And thats enough to buy a decent house for the other block.

Simple as that. No loan left.

EDManual · 10-09-2010, 04:50 PM

As far as spending money goes, yes I earn $35000, maybe $4000 goes in taxes, have been paying around $1000 a month interest thats $12000 a year (i fixed it at 7.5% a few years back on the way up before it went down down down...), leaves about 19000pa to spend on living. That seems to be enough to be comfortable for a small family. We eat out a little bit, I have a boat, we go overseas once every 2 years, I have a nice motobike (bmw dakar 2004, a good car (2007 elantra, current shape), have no loans of any type(apart from homeloan). We have a new TV too! And a 1 year old daughter!
Oh yeah, I have an awesome triumph TR7 V8(not quite finished).
(I got all my stuff before I was married and built the house... )

To be honest, If I had more money I wouldnt know what to do with it :-)

mr smith · 10-09-2010, 04:59 PM

Quote:

Originally Posted by fte50

Gentleman you MUST be in debt to achieve - Whilst cash (cesh) is king, the days of saving for it are gone - i mean the growth rate far exceeds the savings time frame.

Its sad but true. The problem is everyone gets on the debt roundabout, where new players constantly require a bigger debt to get into the game. Play your cards right and you MAY end up with a winning hand, such as ED, but as BA mentioned there are plenty who have been delt a losing one.

divine_afg · 10-09-2010, 06:08 PM

Congrats EDManual
Great Achievment, bought my house back in 2005 aswell on $36k income 200k loan.
Income has gone up now but for those thinking its not achievable, yes it is. Just gotta know your needs from wants.
At the time I Lived comfortably and enjoyed modding the AU aswell, well with mates rates for that

I hope what you have planned ahead goes well for you too

Dear friends I think you have been bit harsh on BAFalcon - His Advice came at no cost and may have helped someone reading his post at no cost.

Life isn't fun without criticism, aids knowledge and experience.

Cheers
H

**ebxr8240** · 10-09-2010, 10:37 PM

Quote:

Originally Posted by Sprint347

Rather than deficate on BA Falcon perhaps listen to some advice that would otherwise cost you a large amount of money to hear in consultation.

Sorry mate he's only an accountant..
I'v got a wealthy portfolio and done very well..
I'd rather listen to successful people..

Pat Riley · 11-09-2010, 05:16 PM

Contrary to the opinion of others within this thread, I originally had difficulty in understanding the reasoning behind a thread that was created and entitled "I can pay off my house in 4 years pretty much on poor blokes wage!" when nothing to suggest this has actually eventuated. In fact, the OP has not even sold his original property, much less subsequently priced and then built an additional property which is factoring into the above thread title. These are events which have not yet eventuated and have been assumed in his "calculations" of paying off his house.

The only reasoning I can see from making such a thread is to encourage other members from entering into the property market on the basis that they can ALSO pay off their house in 4 years on $35,000.

I find this a somewhat dangerous proposition to AFF members based on the differences in the 2004 - 2007 era and the post 2007+ era within the real estate market. My comments were made on the basis that I was providing real-life situations and real-life estimations of effectively "hidden" costs which are often overlooked by those entering into property developments.

I only speak from experience due to the fact that I have seen far too many people file for bankruptcy, lose their home, their car, their pride, their marriages and ultimately the possession of their kids due to rushed, ill-informed decisions which with further advice and thought, could have been avoided. I would hate for other AFF members to be misguided as to how easy it is to make money in property developments at present, and regret any decisions they may make based on the OP's post.

As I have previously said, it may be beneficial to provide the eventual figures within this thread once what is currently still just an idea has crystallised, as I anticipate that many additional costs have not been factored into your above calculations.

XR Lita · 11-09-2010, 09:30 PM

Hopefully one day I can buy a house on my $32,000 income :(

So sick of renting, and putting up with snobby real estates.

**ebxr8240** · 11-09-2010, 11:51 PM

Yes what one has to get is to BUY where you can afford !! So what if you have to travel longer to work etc.. Work out all your expenses..
Try to make your money WORK FOR YOU not working for your money...
It's other things that bring people into trouble.. I have had the same car for 20 years..[91 XR8]
I see some buy cars which depreciate big time buy a new car every 3/ 4 years..
Yes he hasn't actually paid anything off with his money..
It does show with patience you can get there..
Things like plasma T.V's,eating out, credit cards etc is money goes...

fte50 · 12-09-2010, 12:09 AM

And 1 day we all end up in a box 6' down. It could be in 5 mins time ???
Responsibility is good and a must, bit you also GOTTA live.
For anyone that says "Ive made it" and have not made "enjoyble gains" with their $$ in my mind means they're either talking crap or are so tight you wouldnt find their azzhole with a crack detector.

As my dad says, what good is money if your still wearing the same pants from 1960.
Finally, considering the accountant has given free "educated advice" based on 'real' experience, i think folks should be a bit grateful and not mis-judge his comments - valuable info tool 4 those that dont know everything, although i guess not 2 many of these types exist here.

**ebxr8240** · 12-09-2010, 12:23 AM

Yes its a balancing act.. I know a few people who are retired 60+ and have to live with there family [grandchildren] as there is no cheap rentals ..
They blew all there money and now they have to live with their old pants etc just to live..
Clothing from the 60's will possibly be back in fashion ??? Lol...

fte50 · 12-09-2010, 12:32 AM

Im sure the old mans got those pants stashed away somewhere ! lol.
Very true about the balancing act. The trick is to review ur balance b4 u become unbalanced and fall, although each has their own opinion of risk & gain.

hendrixhc · 12-09-2010, 08:50 AM

Luckily i am in a similar position. Its true to say that if you have a crystal ball and can predict where to buy a block of land at the right price at the right time you can certainly cash in.

I bought my 2000sqm block for $139k. six months later the same size block 2, 2 doors up the road sold for $200k.

I have a modest house with a large block and a decent size shed and reasonable landscaping. All up it is now worth approx $450k+ ( Only if someone wants to buy it!). I only owe $150k so i could do the same, sell up, by again and be debt free!

ONly thing stopping me is the fact the location where i am has great views and i cant be stuffed starting all again.

Good luck to anyone who is in this position, specially low income people, but being slightly older i feel sorry for the next generation who wont have a hope in hell in acheiving their dream of home ownership unless they inherrit, win the lottery or be a professional charging over inflated prices for their services.

Trevor 57 · 12-09-2010, 09:03 AM

I will probably be controversial here, but what EDManual was standard practice in my early days of marriage, except for sub-dividing off a section. and we had 4 kids under 4 years of age.

It is not that difficult to live on one wage, people NEED to learn to live without a 40+square house, the 2 latest cars (one a 4WD of course), need to get along without the latest in electronic gadgetry, like a 50" TV, home theatre system, etc.

People need to start living within their means, everyone in previous generations did it, but this generation seem to find it hard to do. Here is my tip, stop bloody spending, it is easy.

One of the GFC starters was people NOT living within their means. Borrow, Borrow, Borrow - we can pay it back - it is a bull-**** way to live.

**buggerlugs** · 12-09-2010, 09:15 AM

Exactly Big Trev. Most of my mates wanted better houses than there mum and dad's had but didn't realize that it took mum and dad thirty years to get that house. What's the old Australian Crawl song............"Live now, Pay Later"...............

**ebxr8240** · 12-09-2010, 03:44 PM

Aha I'm depressed that I can't buy a house in Point Piper Lol..
The bank won't give me $18m...Boo Hoo.. Aha...
-------------------------------------------------------------
It's better to have SOME plan.. Though no point in being negative..
Most U.S loans are "Line of credit" and the owner can just hand the keys back and walk away.. You CANNOT do that here.. The bank and big guys in black suits come after you with court papers etc.. The middle wage in U.S IMO is not as high or even as here..Banks there where loaning to each other.. When interest rates came down to near zero ?? There was no meat $$$ left !!!
When your young always try and do as much training you possibly can...
So you become an asset to who you work for.. Less chance of being surplus to demand!!!
When I was 26 I put in to be a Line worker.. With a little O.T most Line worker earn over $100k these days and if they play there cards right get a vehicle or ride to work and home.. Yes I'm older than most on here.. Looking back it doesn't seem that long ago..
When it comes to investment and making a living etc.. Be slow and patient, but when all the numbers add up go for it !!! Having a plan about the same with your MRS HELPS BIG time... You'll find in most cases if you talk about it ... They will be all for it and push you or both of you to achieve your goals.. The main part is to communicate and have goals ..

scoupedy · 18-09-2010, 09:48 AM

blocks around here go for $400k

Trevor 57 · 19-09-2010, 06:38 AM

Don't buy one, if everyone stopped paying too much for a piece of earth it won't take long for the price to come down. People who are silly enough to pay that much are driving the prices up.

TEKILA · 19-09-2010, 04:18 PM

well done to you mate! good to hear things are working out in these sometimes tough times!

can I ask where you live?

EDManual · 24-09-2010, 08:44 AM

not too far from Geelong.

fordOwner · 26-09-2010, 12:26 AM

Top stuff mate. Pleased for ya!

Me + Government Job + Girlfriend + Rent + Living expenses + Living in Perth = only being able to dream to own a home.

HULK EF · 19-01-2012, 02:56 PM

Have "THE BAD"
*Baught into Cairns "Woree" 6.5 years ago. (25 years old at point of purchase)
3 Bedder unit as part of a block of four units.
$188,000 dollars. back then. 2005ish

*now valued at $150,000 thousand dollars.
*mortgage of $144,000 still owed.
*mortgage of $1015 Per month INTEREST and PRINCIPAL.
*7.01 %
*Have tried for interest only but the loan to value percentage is not nearly enough. -no equity! hence no go with Interest only.
*I rent this property out for $220 PW minus fees so around $600 PM after fees.
*means i am out of pocket $400 EACH month on a property that has dropped a massive % of value and has cost me a small fortune in negative geraing and continualy losing rent to pay for repairs and maintanence.

*im trying to push my personal banker for a smaller interest rate of 6.60% or else i have floated the idea of taking up another loan with a seperate bank.

-ot to mention the small fact that my property has been mishandled by my body corportae inn allowing all 3 other owners to get into debt not paying their body corporate fees..
lots 1/3/4 owed $8,50/$3000 and $1900 respectivly. (m no.2) and fully up to dat with payments.
I know its against the law however our body corporate was so broke they couldnt pay for unsurance!!!!!!! or yard/pool maintanence.

-I could not sell my property for even a huge loss because of the lack of insurance. -my paymets olone were barely keeping the body corporate afloat.

after now 2 years of battlle we had a mortgage title search completed and found the NAB bank holds the mortgage's of the 3 other units. and apon the bank seizing control of on unit becuase of the lady landlord declaring bankrupt -The Nab have decided to pay out the debts owed of $8,500 and the debt of $3,000 to fund insurance as the bank cannot sell either without insurance in place. $3500 quote for yearly insurance.

Nw that the dream of insurance on this place is coming true im seriously considering selling this unit and investing the extra cash i will have elsewhere.

Sorry for the long post,

HULK EF · 19-01-2012, 03:10 PM

THE GOOD.
baught a 3 bedder/2/1 Sunnybank Brisbane 04 and resold in 06.

Baught at $202,000 resold at $272,000. capital gains tax of $14,000 and the other $40,000 went on my FAILED Woree units mortgage. -The remaining moey paid out selling fees with enough left over for a small deposit on another Sydney investment property.

HULK EF · 19-01-2012, 03:27 PM

THE GOOD-also.
I Baught into Leumeah in DEC 07 for $$272,000
3 bedder/3 bathroom and 1 car garage Town house. (no common walls)
on 300 square metres.
Now owe $260,000 on the mortgage. having had it as INT/PI.
Just changed to INT ONLY .
rented for $$260 back in 07 now rents for $365 and is onto its 2nd yearly lease with the current renter's.
Will own this place for another 3-5 years before looking at selling.

Another "THE GOOD".
My fiance Baught a property in Hoxton park back in late 08.
$375,000
3bedder/2 bathroom 1.5 car garage, 560SM.
2.5 living area + study + 6x8 metre queensland room. Study can be easily converted into a 4th bedroom. (is 3.5mtrex 3mtres..

Hoxton park area is appreciating at a faster rate than Leumeah is hense leumeah will be the 1st property sold in our next step in owning our 1st property with kids in mind as they are about to start school. 5-6 years time.

As much as i love moddifying cars its a black hole in concern to money spent MOST of the time. so i try to balcnce investment with modifying.