In my blog tagline, I mention investment properties.
Well have not been mentioning in detail lately.
We are up to that time of the year which, as I remember from last year, is our 'perfect financial storm'. We are awaiting our tax return and a whole series of expenses have come in.
On top of that we moved house with the expense of that, including at least five weeks with no rent on our house coming in, but rent on this new home going out!
So we are back to frugality 101. Back to lots of legumes, less meat. Back to no coffees out. Back to no extra curricular activities not already paid for (like school holiday camps etc).
I must admit I had lost the hard core frugality I was practicing this time last year. It took a year to wear off and also a few handy commission cheques from both Damien and my work. All that extra money in the bank .... a false sense of security that one can spend a bit more liberally.
We are the classic definition of asset rich and cash poor. Our mining town investment properties have gone from returning 12 % per annum to 4 % per annum. So back to what you would expect from most investment properties. We had it good for a few years and now it is back to normal. We had it so good last year that our poor tax accountant struggled to get any refund for us (we just earnt too much from the properties) (nice problem to have). However this year, with the reduced rents, we will definitely be in the tax red and so get a better refund .... in about 12 months though. 12 months of frugality to go!
If we sold all our investment properties tomorrow we would be bankrupt. Scary stuff. Not for the feint hearted. The key is we are NOT going to sell all our properties tomorrow and as long as we pay off the interest each month the banks won't come knocking. We are betting on the property market in the mining towns recovering to close to where we bought a few years ago.
Ask some people and they are confident that this will occur. Ask others and they say we will never go back to anywhere near the boom. So I don't ask anymore! We can't predict the future - but heres hoping a conservative Federal and State government will boost business confidence such that mining and business growth picks up.
In the meantime - we need to enjoy my last splurge before doing our accounts (the trampoline). Each time I look at it, I feel a lump of guilt. But the boys do love it. Tom won't get bed for a while, my wardrobe situation is not going to be updated either. Lucky I accepted all the hand me downs from friends last year! Damien won't get any new bike equipment for his ride coming up. And I will definitely have to put a hold on homeschool expenditure!
I remember last year though that this bunkering down was actually quite enjoyable - focusing on what we have not what we don't have - so I am not downhearted about it at all. Maybe I am just a bit money-indifferent. All my life, money has come and money has gone (in big doses either way) - really it is just money. I am so grateful for all I have that money can't buy and I know whatever happens that is what is most important.