I hear about people who brag about how many houses they have. But then they say how much each house is worth and you realise it is not that much of a big deal after all.
For example, I have about $800k in property, but I only have 4. Other people have 16 50k properties which is also worth $800k. Being able to say they have 16 properties sounds good, but they are all out the back of nowhere, with high vacancy rates and undesirable tenants and not much CG.
All my properties are positive cash flow.
Whats you opinions. Do you go for large quantities of cheap properties or small quantities of better quality/location properties.
Andrew
http://www.rentmaster.co.nz
Software for LandlordsFrom someone who has a bit of both, I would suggest you are better to have about 65-75% cheap stuff and the rest more premium.
Right now I have alot more premium stuff, about 75%, and the truth is my capitol growth on the “back of nowhere” stuff has been equal to that of my property in premium locations.
Also Vacancy rates are much lower in these towns with the cheap, under 100k, houses. It’s actually the “good” areas that vacancy is now showing itself as a real problem.
Slum Lord
Hi Rentmaster or kia-ora, I think a good balance is a good idea, but I suppose it depends on your strategy and time frame of goals too.
Cheers
Marty
rentmaster – i think your comments are a tad deceptive
im guessing that if all your properties are +ve cashflow then you have heaps of equity am i right.
or you have had them for many years???
Kia-ora AussieRogue.
My properties have about 75-80% mortgages on average (based on purchase price). All are in suburban Auckland NZ.
It is possible (in suburban Auckland) to get a $200k property with positive cash flow and about 8% return. Need to do some hunting though.
I suppose the general perception is that the cheaper the property is, the better the return and better cash flow. This is possibly true on average. But I have found that cheaper properties also tend to have more hassles. Maybe the important ingrediant to avoid this is the location.
Andrew
http://www.rentmaster.co.nz
Software for LandlordsHello RentMaster,
Not wanting to sound like a smart alec, but are people “braging” on this site perhaps? after all it is a site thats based on people buying investment properties! my self and many others hav probably mentioned what places they own, and what they are worth, but surley u dont see this as a “mines bigger then yours” statemnt? we are here after all to help each other…
As for your second question, i personally do prefer cheaper properties, but this does NOT mean “crap”. But as Slum Lord mentioned, i do also have some premium places, the reason is that some day i may want to live in one myself…
and yes, the cheaper places are by far the easiest to rent out!!!As an investor im looking for income, based on cost, and will give you an example:
3 places (2 houses, 1 Villa) in regional NSW total purchase value of $247K making an income of $405 pw, (5-20% capital growth per property in the last 3-6 months)
1 place (unit) a friend bought in the Sydney CBD around the same time, purchase “value” of $465K, vacant for 2 months, finally a tennent at $370 pw and nill capital growth (thus far)….
which would you choose??? i know what ill stick to…
Jason
okay – sorry about that – clicked on the wrong button[
] – was going to say that I think a balance is best, along with a good dose of landlords insurance hahaha
] – was going to say that I think a balance is best, along with a good dose of landlords insurance hahahaThe topic ‘Quantity or quality?’ is closed to new replies.
