ORSMParticipant@orsmJoin Date: 2009Post Count: 11
This is my first post and I am recently new to propertyinvesting.com, I have been reading the forums and I am quite interested networking with like minded people. I think to gain the best knowledge is to talk to people who know what there talking about and who are on the game themselves.
About me: I am a 29yr old male who has 2 propeties, 1 x unit (investment property) and the house that i currently live in now and have lived in for just under 1 year. The unit I have is a unit in the western suburbs of Sydney (not positve cashflow) and have bought this back in May 2004 Purchase price 267,000 and now worth 280,000 (6 yrs to date). Now the house I recently bought in August 2009 (9 months to date) is 370,000 and has gone up in value to 410,000. I now know you make more money on a house over time compared to a unit.
Where to from here: Questions?
1. “Should I sell the unit and put my money else where”. If I do what is the cost in doing this ie selling fees, legal fees etc:”
2. Can I use the equity in my house (currently live in) for a deposit on my next investment?
3. How can I find out where I will profit the most time in the short amount of time when it comes to property? ie renos, buy and hold, buy and sub divide etc?
Thank you for reading
CraigPaul DobsonParticipant@pauldobsonJoin Date: 2003Post Count: 1,196
Welcome to the forum and I hope you enjoy your time here.
1. Your unit doesn't seem to be performing too well but, if you sell it traditionally, at this point the "numbers" don't look very appealing. You could possibly consider selling it with a vendor finance Instalment Contract. Selling with vendor finance will usually get you a premium price for your property but the money comes in over time. Considering that selling it traditionally may put no extra money in your pocket, it may be worth considering.
2. Check with the mortgage specialists on this forum but some lenders won't allow you to revalue and increase your loan debt until the loan has been in place for 12 months. Once your over that hurdle, a revaluation may give you access to $32,000 for your next IP purchase (at 80% LVR).
3. We're biased and very happy because we started our vendor finance business 7 years ago and it's done well. However, all the techniques you mention work well, if you due the necessary amount of research and due diligence and then stick with it.
Cheers, Paulj900Participant@j900Join Date: 2008Post Count: 56
My opinion is that
>I now know you make more money on a house over time compared to a unit.
Depends on the location. A nice house way out in western sydney will still under perform the market during this period
>1. "Should I sell the unit and put my money else where". If I do what is the cost in doing this ie selling fees, legal fees etc:"
I will. But if you're not getting any meaningful balance out of it after the selling cost, it's worth considering other strategies.
>2. Can I use the equity in my house (currently live in) for a deposit on my next investment?
Usually yes but Paul's point is very valid – you may need to wait until it's been a year.
>3. How can I find out where I will profit the most time in the short amount of time when it comes to property? ie renos, buy and hold, buy and sub divide etc?
Flip is probably the quickest (you dont actually buy anything), renos is good if you have time and energy, buy and hold is a picking-well-and-waiting game…
All techniques require you to build up skills and experience and maturity. There's no shortcuts. If you're driven by "most profit in the shortest time", chances are you'll get burnt.
Welcome aboard and I wish you a smooth journey!