Forums / Property Investing / General Property / How to invest $500k for a 50 year old in WA

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  • Profile photo of casanovawacasanovawa
    Participant
    @casanovawa
    Join Date: 2010
    Post Count: 63

    I know someone who may be coming into $500k or so if they can sell their home for about that. They are 51 or so, without a lot in super, the $500k property is their main asset…

    Without thinking about way to not sell it an use it as equity, the thought occurred to me that if they say were to buy 5 or so 1b/1b units for around about $200k each leaving about $100k owing on each and then were to rent them out for around about $200/wk some quick calculations over say about 15 years i think they should be on target for paying them off, about when this person might retire.

    At that point they could then keep them and receive around about $1000/wk in today’s money as a passive retirement income or sell them down as they want to use the funds.

    This is not taking into account things like strata fees which no doubt can be a bit, 1b/1b units are usually fairly functional so not a lot of maintenance on them. if around cafe strips/unis (say Vic Park) i think there would be a fairly high chance of good occupancy…

    I was thinking of telling them about maybe managed funds as property at the moment seems to be a bit of a dicey investment but this wouldn’t really be counting on growth int he value of the assets.

    I know 5 units is probably not ideal, hard to value add to units as they are usually in a big building with dozens/100s of the exact same units so hard to differentiate etc…

    Anyone else have any creative thoughts on the real estate sector?

    Regards
    Mark

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Mark, not convinced i would ever recommend a client buy 5 x 1 bedroom units giving the net returns after all costs.

    They would better off to buy a single property with good capital growth prospects, invest some of the Funds in a Mortgage Trust and use the added return to pay down the mortgage.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of casanovawacasanovawa
    Participant
    @casanovawa
    Join Date: 2010
    Post Count: 63

    Not sure Perth has a heap of great capital growth prospects at present… Smaller units close to the city might also be for airbnb rentals??

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