Forum Replies Created
Hi Still in School
I started 5-7 yrs ago, so I have been able to ride the property wave. I started with the one property that was $90k. Now similar ones are $250k.
I dont have the $1m magic mark yet, but its not too far away.
All I am saying is that you are better off in the long term starting with the one property at $250k, consolidating over time and buying more similar ones than buying up rural properties. Especially if you are time poor like me.
Cheers
Andrew
Hi Peter / All
I totally agree. You need both (growth and yield). I just dont like reading posts about people focusing only on cash flow positive rural properties. These properties have taken a hell of a long time to appreciate. Just because they have in the past two years does not mean they will in the future.
Who wants the hassle of 3-4 hour drives and fixing problems over the phone, for just a few $000 a year.
I would rather enjoy a capital return of $20k on a $250k property that returns an average 8% capital gain over the long term.
I dont want ten properties that gives me a $2k return with limited growth potential from each property
Cheers
Andrew
Hi
My plan is not to get $1m of property now. I am talking about over a period time (say 5-7 yrs) while you are still working the normal job.
As the first property becomes cash flow positive you purchase another negative geared property and as that increases in value you buy another etc, etc.
You have to start with the first one at say $250k, then once its positively geared you go onto the next. Yes, it takes time. But the growth will make it worth while.
You always need to consolidate, before you buy the next property. To allow for rental vacancies and increased interest rates.
All I’m saying over the long term, rural property is not worth the effort unless its a holiday area for you and you go there alot.
I currently have a property 20 mins away (Frankston) that I cannot rent. It needs a new kitchen, landscaping, painting and new doors. Once this work is completed it will find a tenant no problem. I dont have time for do this on a rural property worth $45k. But one day you will need too.
This place has already doubled, and there are great things going on there eg. Marina, central shopping centre, new theatre. Contrary to what Sam Newman (The Footy Show) reckons Frankston has a alot going for it. Even if the markets starts to tank, this area wont.
But that could be another post.
Cheers
Andrew
Hi Melbear
You sound like you are about 5 years ahead of me. I see myself working another 5 years then I would like to think most of the properties are looking after themselves, then I can focus on more positive geared ones and work more like part time. I have a young family with two young kids, so I still need a steady income/job.
But to get started, I need my job and a portfolio of high quality properties to support my lifestyle. Then later, in better buying conditions, I can look for more positive geared properties.
Cheers
Andrew
Hi
My understanding is that you can also serve a notice to vacate a property.
If your reason is to renovate and sell there should not be any problems.
People do this all the time.
Cheers
Andrew
Hi
Kool. I understand. I am not a tradesman, my brother is and my father was. I am an office bunny. As a kid, it was too hot in summer and too cold in winter – so I studied instead.
What you are doing is great. Rehab work adds a lot to the value of a property and thats where the smart tradesmen make their money.
My brother is now doing his own rehab work on his properties and to supplement his income he does the work for others. My guess is that he will one day be worth a shitload more money than me.
I have a high level of respect for tradies who do their own property investing as well.
Cheers
Andrew
This is the reason why I dont like rural properties 4 hours from home.
Sure have a few in your portfolio, but I would love to talk to you in 5 years time to see if you still have the property.
Not worth the effort in my view
Cheers
Andrew
Hi
I live in Aspendale (beachside suburb of Melb – about 28kms from cbd – I think????).
I invest in Mentone and Frankston. No rural stuff. At least management and repairs hassles can be addressed locally.
Some positive, some negative geared but its long term growth i want.
Cheers
Andrew
Hi
Where to next year. They say shares are the way ahead, but I have been burnt a few too many times.
I think next year will be a year of consolidating the gains that property has made over the past 3-5 years. Yes, we may see a few % decreases in property values. We may also see some interest rate rises over the next 12 months but this should hopefully result in some rent increases or at least see more of a balance in the rental market.
Just my thoughts.
Cheers
Andrew
The article is almost a month old now. Much has changed since then. Nov was still highest month for loans.
I still think there will be another increase in Feb 2004. As the article says ‘nip it early in the bud – so higher increases are not necessary later’
Cheers
Andrew
