Forum Replies Created
Hi SK2,
You must be looking for future cap growth, because $280-$300pw yields will not come close to paying for your $350,000 investment.
Therefore, lets look at your chances.
From experience new sub-divisions take at least 3-5 years to see any form of cap growth (Especially in the current Brizzy market). This is because the land developers either sell in stages (still an existing supply of vacant land) or they simply cannot sell all the blocks ( 99% of people would rather build their own master piece then buy your choice of home). This coupled with the fact that all of your neighbours are all building new houses too means you will not have much chance of pulling anymore for your house than they will, which in the current market is usally cost (because most people do their DD, and can see what the blocks are selling for in the estate and know what the home has cost to build) your only hope is adding perceived value.
My advice…stick to existing properties in areas that are in demand( or future for-seeable demand), find the niche (or peoples need), what people are buying/renting and why and then fill this need. This way you can differentiate your property from the older ones by adding perceived value thus making a tidy profit, both yield and cap growth (possibly).
Good Luck [biggrin]
Higly Motivated Investor
I am a RE agent, you can just act really interested in the property and say you want a copy of the contract for sale to go over the details of the S149 and sewer etc,and check for easements. You will then be handed the contract with the vendors name and postal address on the front page from the agent…easy![biggrin]
Higly Motivated Investor
Hi all, thanks for your replies, it is great to hear some different points of view.
The property is in a growing township benefitting from rich farming industry of beef & cattle auctions, mangoes, tea, and tourism just to name a few.
My finance is all at the ready, but I am buying an investment to pay for it self, so I can not pay for it if it is vacant for 8 months, I would like the lease to be longer but this is what it is for now, they have been there since 1990. I can negotiate the longer lease next time it is due if possible.
I feel the area is poised for growth with it being 1hr from an international airport and high tourist desination.
It is currently returning 13%, the idea is to buy 1 or 2 comm properties returning +cf and use that +cf to offset negatively geared resi properties in cap/growth based markets such as sydney, brisbane perth etc.
If this does not eventuate I will focus on resi for now with lower margins of +cf in better areas for cap/growth and if a comm prop comes along with reasonable +cf I will look into it.
Thanks for your input investors, any more ideas or advice welcome.[biggrin]
Regards
Higly Motivated Investor
I think there is always a great place to buy, in whatever market we are in.
For instance, a few years ago sydney was the place to buy, then QLD was hot because sydney and melbourne investors/retirees were moving north for lifestyle and market reasons, now it is WA & NT and only minimal parts of QLD, now that the market has hit the bottom of the cycle in some parts of NSW(or there abouts). We are seeing people start to come back to NSW yet again. Funny how no matter how many times people hear the indicative words “PROPERTY CYCLE” they still seem to think the market only goes one way.
Think of Aus & if not the world as one big wheel, the great spots to buy just keep on moving round and round the property cycle, eventually it will come back around…ooh say every 7-10 years!LOL
This is why if you buy and hold as many properties as possible, in as little time as possible, you will be better off.[biggrin]
Higly Motivated Investor
Obviously everyone out there has a different situation their in, and also a different mindset. Some are comfortable to be more aggressive than others with their portfolios and some aren’t.
I personally agree with Dazzling & MH, I am looking to be more aggressive with my plans, some of the people out there are not educated enough to feel comfortable with large amounts of debt in the hope of future price rises, they dont realise this is a far more efficient way to structure your portfolio for growth in the long term.
Once the issue to invest more aggressively or not has been resolved, then the real important question of what and where to buy has to be addressed, this may be the reason for not acting for first timers, they may feel more comfortable to do nothing because everyone else seems to be doing nothing and just slug it out at work week to week paying for one property for 30 years!
Why be less than your best just to make the people around you feel more comfortable![cigar]
Higly Motivated Investor
Do you think the QLD market has now lost its charm or do you feel it is worth buying for the future population and economic growth predictions, ie south east QLD draft?
Higly Motivated Investor
Thanks for the heads up Mobile mortgage,
that thread is just what i wanted to know.
Thanx. [biggrin]
Higly Motivated Investor
Of course another angle is to say that the syndicate can buy $15million buildings with multi national tenants, but if you have tenants paying $1,500,000 P.a to lease a premises.
Either alot of individual shops or alot of warehouse space, and they leave, it may be difficult to lease to another mult national tenant with the resourses to fund such figures.
which is really the reason of your investment in the first place. There is obviously a higher percentage of businesses leasing premises with turnover of $1million pa than businesses turning over $10million pa therefore there is going to be a larger pool of potential leasees for you investment.
Higly Motivated Investor
Dazzling is right
Considering the size of your purchase, you want to make sure your in control of your asset, the more people with a say, the more problems may arise when it comes to descision time. Just like the saying goes “To many chiefs, not enough indians”
At the end of the day, “Risk equals return” and no matter how much return you want, it will always be governed by how much risk your willing to take. 10% on your money is 10% on your money, no matter how much you put in![cap]
Higly Motivated Investor
Hi Pabbs,
I would probably suggest to save your money and stay away from these real estate secrets stuff. I have seen a couple of them, just so I could see if I was missing any strategies or loop holes etc. They all claim to tell you the “get rich quick” schemes and “secrets of the rich no one knows about”, it is big business out there and they are feeding off peoples desire to be secure and happy with there lifestyle(rich or comfortable).
I tend to read alot of books and believe this is a better way of getting the info, it’s not rocket science, it’s common sense, people seem to make it sound difficult or harder than it is.
Why pay $300-$400 for a pack, or $3000-$5000 for a seat at a seminar, when you can buy the same info in a book for $30 Bucks(obviously buy more than one), lets face it, they put pretty much everything in the book and just basically tell you the same thing you’ve read anyway. But I have many books and they seem to cross over into each other with similar if not the same information just worded differently.
Recommended authors to consider are:
+Peter Spann (Aus)
+Robert Kyosaki (USA)
+Steve Mc Knight (Aus)
+Margaret Lomas (Aus)I hope this helps, just remember some times you already know what you have to do, and you seem to hear it or read it over and over maybe waiting for a miracle, but you just have to sitdown and plan…invest…prosper!
Hope this helps [biggrin]
Higly Motivated Investor
+Rich Dad, Poor Dad. Robert Kiyosaki, and his hole series
+real estate riches by Dolf De Roos (Rich Dad series)
+$10 million in proeprty in 10 years, Peter Spann
+Wealth creation (Red Ferarri on cover), Peter Spann
+0-130 Properties in 3.5 years, Steve Mcknight
+$1,000,000 in Property in 1 year, Steve Mcknight
+Margaret Lomas’ books are good too.Also if anyone knows of anymore books worth a read…[biggrin]
That is great news Jenny, well done. It is uncanny you live so close to my area. The Terrigal market is expensive and it has performed exceptionally well, I have built up plenty of equity. I am now looking for property that makes money from day one, my buying strategy will be positive cashflow based, also incorporating multiple aquisitions as repeatedly as my portfolio will allow(providing I find the market/area to focus most of my buying on), hense why I came to MtIsa & Rocky(for the yields). Thanks very much for your help everyone.[biggrin]
Ben Purdue
What do you mean by “a ring fence”? I’m not familiar with that terminoligy or phrase, I would probably know or have heard of the strategy you are talking about though, just might be called a different name.
Ben Purdue
I research the local market everyday, as I said I am a realestate agent, but living on the eastcoast line of nsw near sydney, this property is extremely expensive and it is extremely difficult to implement steve’s strategies. I also want to buy out of my state due to land tax implications. I prefer to keep the costs down and start off with smaller priced properties and accelerate the buying of these. I have been analysing the market for a while, mainly due to waiting for financial issues to be resolved, now that is all sorted, I am ready, but the areas I was interested in and have been watching & found great positive cashflow deals (commercial). I feel may be at the end of the road for c/growth, industry and population. I read a ABS report on Rockhampton & Mt Isa, and both of these regions have a declining population of 1200-1300 people P.A, Mt Isa only has 20,000 total population. The industry they concentrate on is mining and beef based, and I feel I might have already missed the boat on these locations and should start looking elsewhere, hence my question out of curiosity.
It alsomakes me wonder if I bought in these remote areas, they have been booming with growth rates of 20-40% and investors from southern states have been flocking to darwin, n/qld, etc to take advantage of affordability, when these markets they have been flocking to cool off and the southern markets become more affordable, does anyone see a likelihood of investors returning to the soutern states, hence demand up north subsiding and prices in the north falling back to more normal levels(meaning if I start buying up there now, is there a chance I am buying in the peak of their market? [blink]
