I think that some people get caught up in the idea that they ‘have’ to have more and more properties untill they are up to thier eyeballs in debt, living a spartan existence and wondering how to get over the ‘serviceability issue’.
Sometimes you may be better served to take some of your profits, maybe cut loose an underperforming property or look at the advantages of adding value to your PPoR and selling it at a premium and moving into the next “doer upper” PPoR for the tax breaks and once again adding value?
“Never Sell” has it’s limitations, sometimes it may be prudent to sell to realise a profit and move into a better investment…
What do you think?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorEach to their own, everybody is different. I believe investing, especially property, is also very much about when and what to sell.
Regarding the PPOR, I’d rather have a really nice PPOR and 5 IP’s than live in a cave for the sake of affording a few more IP’s.
One thing I always consider regarding investing techniques is that Dolf de Roos, advocates never selling and Steve McKnight does, frequently. They are both very successful, so to whichever method you suscribe as an investor, you know that you can make money either way.
Dont worry
If it comes to a world depression the USA will declare war on China first.
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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A previous colleaque I used to work with, lives like a miser, to pay for the 10 investment properties that he bought over the years.
To each, his or her own.
To me, we only get to live once and I prefer to enjoy life within reasonable boundaries. To live like a miser is not the way for me. What is the point of having millions of net worth and not enjoying some of that wealth?
Does anyone ever get to his/her death bed and wish they had more money???
Living a meaningful / happy, life is far more important to me.
As to selling and moving into better investments, yes, selling property and moving into BHP shares at $8.50 in 2003 was a good idea (to me anyway).
BHP is now $19 a share.
Hi Redwing
I think it comes down to setting clear goals and having set timeframes. There are occasions where I will choose to live like a miser for a certain period of time, but I wouldn’t let myself get into a habit of it. It’s all about balance. Just making sure I have everything I want now and will have everything I want in the future too [cap]It’s also about priorities. Whether investing is an end in itself or just a means to an end will determine how much it takes over a person’s life.
Piling up properties and wealth for the sake of it is nonsense!!! If its part of a long-term investment strategy, one would evaluate it on a regular basis and as it has been suggested above dispose of poorly performing assets, hold others or move into entirely different asset classes as necessary. I love to buy and invest in property as much as the next person, but its done as part of an overall investment strategy. And its definitely not one that in the short-term alters my lifestyle!
Eric
I read somewhere a while back, this person’s definition of a stress free lifestyle was based on her ability to have the following ;
1. A nice PPOR in a decent area free of debt.
2. $ 10 to 20 K cash in the bank, or enough to easily overcome any imminent bill, such that walking to the letterbox and flicking through the ‘window type’ letters was never a scary thing.Everything else in her life was built around those two bedrocks.
We thought that was a pretty good plan also, and in the early days emulated that. Of late, the scale has got such that, to have ample cash idly sitting by waiting to pay for all of the bills is not efficient use of your capital.
Good strategies for some folks, simply don’t work for others for various reasons { scale / fear / individual competencies and backgrounds etc }.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Anyone who advocates a hard and fast rule regarding investing should be considered lacking in knowledge. The ‘never sell’ advocates are so 10-20 years ago where views were very different.
I don’t know about anyone else, but when I buy assets, I like to profit from them as much as I can. If that means selling a current holding and taking a smaller profit (or even a loss) today to be able to buy a better performing or more profitable asset for tomorrow, I would happily do it. In fact, I have done it many times.
As an example, I bought a CBD unit in 1998 for 400k. In 1999, I found out before it was announced in the media that 15,000 units would come onto the CBD market within the next few years. I sold my unit for 500k and can now buy it back for 380k. Surely the ‘never sell’ adocates would approve????
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteWe have no rules when it comes to investing, we buy and sell and trade and build and renovate. Some people may consider that “unfocused” but we do well enough not to need a job!
And who said that having a good life style and investing have to be mutually exlusive? We try to have it all. We take ~10% of our profits once a project is finished and spend it on either a family holiday, buying something for the kids etc. The rest is invested. To us this is a strategy so that our kids won’t grow up resenting that all we do is buy properties and never have time for them. Soemtimes renos constructions etc can take us away from our family more than we like! Once something is finished, the kids are rewarded!
What do other people think?
Xenia
We buy properties in all conditions. Can offer Immediate Cash Settlements, No Real Estate Agents Required
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phone 0412 437 582Sounds good to me Dr..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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