Margaret Lomas - A Pocket Guide to Investing in Positive Cash Flow Property

First published February 2004 by Wrightbooks.

an imprint of John Wiley & Sons Australia, Ltd

42 McDougall Street, Milton Qld 4064

Office also Melbourne

Margaret Lomas 2004

Reprinted October 2004, July 2005, June 2006, April 2007 and February 2008

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication data:

Lomas, Margaret.

A pocket guide to investing in positive cash flow property.

Includes index.

ISBN 0 7314 0113 1.

1. Real estate investment. I. Title.

332.6324

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design Rob Cowpe

Disclaimer

The material in this publication is of the nature of general comment only, and neither purports nor intends to be advice. Readers should not act on the basis of any matter in this publication without considering (and if appropriate taking) professional advice with due regard to their own particular circumstances. The author and publisher expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance, whether in whole or part, upon the whole or any part of the contents of this publication.

Dedication

As always, my husband Reuben has given me the support, guidance and encouragement I have needed to write this book, despite the tough times which 2003 brought to us. I thank you for that and for everything else you have given me.

Suellen, a lifelong friend thank you for your support this past year and always.

Dad one year on and I still miss you every minute. Not having you to read my work has left a big hole. I hope you are watching this book is for you.

FREE SOFTWARE!

Congratulations on your purchase. You are now entitled to download your free copy of Destiny Finsoft, a unique program only available to readers of Margarets books.

The program includes:

• Buying and selling worksheets
• Loan calculators
• Property cash flow calculators
• Depreciation calculators
• Purchase and loan stamp duty calculators
• Finance qualifier
• Ready to invest calculator.

Just about everything you need to assist you with the important tasks you are about to undertake.

To download this software, you will need to first email and provide your name and contact details. You will receive a password within a few days. Then, go to:

www.destiny.net.au/finsoftentry.html

Enter the barcode and this new password, and you will receive complete instructions about how to download this wonderful program.

Enjoy using it!

Acknowledgments

Teresa you know that I cannot run my life or business without you! Thank you for everything.

Steve and Dave from the 2GO real estate show I love you guys, and you constantly support and encourage me. Its such fun working with you, and I look forward to great things in our future.

Susan and Juliette commitment and desire are concepts you do not need explained to you. You are both very special to me.

Mark the enthusiasm you continue to show will remain your biggest asset. Head down and tail up and you will amaze yourself with what you achieve. How proud I am that you are my son.

Noel Whittaker how privileged I am to be able to call you friend and mentor. Thanks for being in my life and for the wonderful guidance you give.

Kristy, Belinda, Michael and Rebecca I must be the luckiest mother in the world to have such great children you are all independent, strong and verbal! I cannot wait to see your lives unfold and am so glad I can be a part of that. Thank you for your patience and, most of all, your unconditional love.

Karyn, Chris, Mark and Paul my brothers and sister. Well, you all had to put up with me, didnt you? That in itself bears acknowledging thank you!

And last but not least, to the special radio people who are always so good to me Tony Delroy (ABC), Annette Allison (3AK), Graeme Maybury (6PR) Laurie and Paula (Bay FM breakfast). Talking to you is always fantastic and your support is remarkable.

Dont worry if I missed you this time books keep walking out of my head so Ill get you next time. It doesnt mean you are not important to me it just means that the world is so full of wonderful people, I would need another book simply to thank them all!

Preface

Some time ago a reader called and told me about his successes with buying positive cash flow property. He had previously purchased a series of properties that were negative cash flow and, since being alerted to the concepts of positive cash flow through my books, he had managed to turn his negative cash flow around.

He said that all of the books in my How to series had been of great use, but to make things easier for himself he had spent countless hours extracting the information he needed to put together a systematic process a step-by-step guide. This ensured that he could easily get on with the business of seeking out and buying the right kind of property without the worry that he might overlook any crucial steps.

It was then I realised that when I buy property for myself I do so largely using an unconscious series of steps which feel innate to me. Of course they are not only is buying property my hobby and my investment of choice, it is also my job. I have the benefit of being able to eat, sleep and think about property for most of my waking hours. I am so involved in property that the process of property investing is second nature to me now.

However, most of my readers are not so lucky. They spend their lives working on other things either in a job for someone else, in a business for themselves or perhaps caring for a family. They do not have the benefit of being immersed in the property industry so constantly and, therefore, buying property can seem like an arduous and cumbersome task.

My How to series of property books covers every single aspect of buying property and includes everything you could ever wish to know about buying and managing positive cash flow property from the moment you decide that property is for you, right through to the day you settle on a property and beyond. Be sure to read them first, and keep them handy as many references are made to them in this book to allow you to gain more comprehensive information about each phase of the investing process. However, there is a lot of information to digest, and while it is crucial that these books are read if you want to gain an in-depth knowledge of property investing, it can be time consuming to go back and sift through each of these books time and time again to uncover and formulate an actual process which you can use.

With this in mind, a new book idea began to germinate within my head until it became an absolute consuming need to put pen to paper and make your job of buying property a whole lot easier. This book will not replace any of my previous property books they will remain vital pre-reading if you are ever to have a complete understanding of positive cash flow property and so achieve ultimate success when you do invest.

However, A Pocket Guide to Investing in Positive Cash Flow Property will provide you with a step-by-step process to taking action. It will take much of the hard work out of the job of investing and ensure that you miss nothing when buying a property. Keep the book with you at all times, follow the references to my other books to gain a more in-depth understanding, and then follow every step outlined in this guide and you will be sure to maximise your chances of buying a well-performing property that will help you to meet your financial goals for years to come. It will keep you from getting caught up with the emotions of buying property and help to ensure that you truly use a commercial head when making choices. It will allow you to use that vital financial advising approach which I so strongly encourage all investors to adopt when seeking suitable property, and this will steer you clear of the inherent pitfalls of dealing with most property marketers today.