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Be prepared to wait a long long time.
7-10 yrs ago there were people rushing to buy 5 acre blocks all over the place in SW Sydney.
All these places were going to be developed in a few yr time blah blah.
I had countless people wanting to me go into deals buying parcels of land.
Residential, Commercial etc all the way out to Menangle.
I drove out to Menangle Park to see some bit of land for a few million $$ they thought was a bargain, I just told them they were crazy, maybe in 20/30 yrs.
And the Leppington craze, "ready to explode"...into oblivion maybe.
What happened? Nothing, I can buy now cheaper than then.
Of course I still have the for sale ads, here's a quote:
"RUSH Immediately to secure your own 5 ACRES REZONED RELEASE AREA"
Be prepared to wait a long long time for anything to happen.
And if it does, it often gets political. Just because your land is next door
to a parcel that has been rezoned, don't mean your will also be rezoned.
Big Bux, Big Biz, they don't want competition unless it jeopardizes the whole project.
Unless it's something like this (40% overpriced imo), where rezoning is a done deal
http://www.realestate.com.au/cgi-bi...r=&cc=&c=93969448&s=nsw&snf=rbs&tm=1242812431
or you really know something is happening, and your still prepared to wait it out a few years then I'd say it's ok.
Knowing something "is happening" does not mean someone (or anyone)told you so, or that a politician said so.
You really gotta have inside (secret squirrels?) knowledge, or 20yrs patience.
Hi there,
Anyone doing this at present?
Or is this something better left to the large development companies?
What % of your gross property portfolio would you commit to such speculative ventures?
5%, 10%??
Thanks.
-If you buy land, it has always appreciated more than houses or units over the long term. But you have no income.
-If you buy houses and rent, you can pay down principle and make it CF+ fast instead of paying interest.
What I do know is that I would do one or the other or a combination of both.
If I liked my job, were good at it and did'nt think I'd be unemployed, then I
see nothing wrong with buying a decent place in a better area and saving like hell to get it CF+ for the next one.
After a few years eventually the price of land will go through a slump, and being cashed (or equitied) up will give you a chance to move with a mininmal of cashflow outlay.
The big problem is where to buy? How much to pay?
And an almost sure thing now (rented house) is always better than a "some day will happen" pie in the sky, which it cold turn out to be.
Let me give my guiding investment principles (have some food API bottom trawlers!):
1. All debt is bad if it costs me to keep it
2. An investment earns, a liability costs.
3. Any liability should be turned into an investment asap.
3a. A future investment purchased as a liability should be ideally be funded by other investments, and preferably P&I loans.
4. If it is'nt CF+, then make it!
5. If you can't make it CF+ quickly, the market is too hot or you dont yet have enough $$$.
6. LMI is bad, and means your LVR is too high.
7. He who want it most, pays the most. He in a hurry always pays too much.
8. He who tells you to hurry usually gets a commission.
9. Equity = Wealth, Equity = Cash, Equity = ability to buy when others are going broke.
Equity is king! Long live Equity!
© Piston Broke
As for financial markets, that's even harder. sure if you bought Westfield 40 yrs ago you would made a mozza, but how many others went broke?
Who is the new Westfield?
And how much stress will the volatility cause?
Do you spend your life gleud to a screen, reading the paper thinking "I made 10%"..."I lost 20%".
Not me, that's for sure.
And imo trusts are setup, and there to feed someone else. Usually the managing corp that set them up.
and I've only once had a JV or partnership in investing.
Looks like I'm a "direct" person.
(and ultimately we are all just speculating on future capital growth)
9. Equity = Wealth, Equity = Cash, Equity = ability to buy when others are going broke.
Equity is king! Long live Equity!
JIT, that a tough question that can only be answered in hindsight.
-If you buy land, it has always appreciated more than houses or units over the long term. But you have no income.
-If you buy houses and rent, you can pay down principle and make it CF+ fast instead of paying interest.
Either way you end up in a pretty good position after 15-20yrs.
Of course many times have I cursed those overgrown weeds for bleeding me dry year after year even though they are sitting there at a total lvr of ~15%.
But when and if it happens, then all xmases come at once and you forget the pain.
Would I do it again? Dunno.
What I do know is that I would do one or the other or a combination of both.
If I liked my job, were good at it and did'nt think I'd be unemployed, then I
see nothing wrong with buying a decent place in a better area and saving like hell to get it CF+ for the next one.
After a few years eventually the price of land will go through a slump, and being cashed (or equitied) up will give you a chance to move with a mininmal of cashflow outlay.
The big problem is where to buy? How much to pay?
And an almost sure thing now (rented house) is always better than a "some day will happen" pie in the sky, which it cold turn out to be.
Let me give my guiding investment principles (have some food API bottom trawlers!):
1. All debt is bad if it costs me to keep it
2. An investment earns, a liability costs.
3. Any liability should be turned into an investment asap.
3a. A future investment purchased as a liability should be ideally be funded by other investments, and preferably P&I loans.
4. If it is'nt CF+, then make it!
5. If you can't make it CF+ quickly, the market is too hot or you dont yet have enough $$$.
6. LMI is bad, and means your LVR is too high.
7. He who want it most, pays the most. He in a hurry always pays too much.
8. He who tells you to hurry usually gets a commission.
9. Equity = Wealth, Equity = Cash, Equity = ability to buy when others are going broke.
Equity is king! Long live Equity!
© Piston Broke
As for financial markets, that's even harder. sure if you bought Westfield 40 yrs ago you would made a mozza, but how many others went broke?
Who is the new Westfield?
And how much stress will the volatility cause?
Do you spend your life gleud to a screen, reading the paper thinking "I made 10%"..."I lost 20%".
Not me, that's for sure.
And imo trusts are setup, and there to feed someone else. Usually the managing corp that set them up.
and I've only once had a JV or partnership in investing.
Looks like I'm a "direct" person.
Great!I'd disagree with point 5 though, particularly for those just starting out. By the time I saved up for a 20% deposit prices would have gone up 40% (and in the areas I purchased in the last few years... they did!).
That's what I thought the forum is for lol Getting out the nitty gritty dirty ugly detail like the guy cleaning the attic or under the house, holding up some ugly looking dunno what that looks like it's growing teeth and a tail and asking "you said it would be easy, just a bit of dirt..."so it perplexes me to see some of the heated banter that goes on with you and others here!
Now you can wait for it to come back to you, or go and find it.
These are apart of a 15 year plan that is now coming to fruition.
10-15 fully owned IPs will do just fine, I can live modestly on that lol.
JIT that 150k would've bought 4 IPs at the time (20% dep each) now selling around 230-250k. So the CG would've been ~800k. and I could've re leveraged and bought more. I'm now expecting a CG of ~1.5, ~65% LVR on an asset of ~4mil.
So the big question is could I have accumulated 4mil @ 65% LVR buying houses in the same time?
Dunno, maybe yes...maybe no. Keep in mind that if they had a CG of 7% yr those houses would be now worth ~3mil instead of 1mil
buy eg farm land, and operate it as a farm, but hope that it gets rezoned or that there evolves a higher use for the land - residential, industrial, or whatever
His family had owned, and farmed, the land since
the Ballot in 1898, so there was nothing speculative about it for them,
but the developer which bought the first parcel did speculate and it took them nearly 3 years to sell 11 blocks.
In a mild form we are all speculating that the properties will grow in value over time, but in the meantime most investors also look at the rent return and the capacity of the property to eventually pay it's own expenses and ultimately pay it's own capital cost.
Sorry, I meant I disagreed with point number 6 (not 5), re. ''LMI is bad for you''.
Sort of.... my PPOR is on 20 acres, next to a pleasant village. There's a (remote?) possibility that the govt will decree that local councils must allow subdivision to 5 acres lots some time in the next 30 years... just like they've taken granny flat approval out of the hands of our (anti development) council.Anyone doing this at present?
Sort of.... my PPOR is on 20 acres, next to a pleasant village. There's a (remote?) possibility that the govt will decree that local councils must allow subdivision to 5 acres lots some time in the next 30 years... just like they've taken granny flat approval out of the hands of our (anti development) council.
If it comes off great, if it doesn't who cares - it's costing me nothing & it wasn't the reason why bought. There's a tiny bit more Blue Sky than living in a 4x2 in suburbia.
I'm not following this, what do you mean ''come back to you''? Go and find what?
There's always options, but yeah. "It won't happen overnight, but it will happen"...eventually. I gave 10-15 yrs. but it could've been 5-10 more yrs.When you say 15 year plan... was this plan dependent on a speculative re-zoning (or higher use) of rural/semi-rural land... that paid off?
Nope, very far from it.Or maybe it was a done deal like what you mentioned before:
Equity & Cashflow gives you all the options.That would give you a good passive retirement income stream, presumably all residential though... not that there's anything fundamentally wrong with that...
Yep!!!!!!, It was purchased in the 90's and there's many reasons for it.So instead of paying 150k for 4 IPs (ie. land with house on top), you bought a large land (or two or more), presumably at the city fringe, with presumbably little/no income coming in, as part of a really long, long (and highly speculative) buy and hold property strategy... that is about to finally pay off...