3 months of uncertainty and no purchase. Any suggestions?

They say you should buy as soon as you can right? Since buying 2 IPs in March I haven't been able to make any clear decisions on the next step.

I tend to favour inner city property but am thinking for diversification to look at regional or outer suburban property. Current bank will allow me to purchase $450-$500K and my husband has no property and he can purchase something in his name too probably also up to $500K.

We can afford to service -CF but since we already inner -CF in 3 capital cities, am definitely thinking other areas BUT very very time poor. Are regional or outer suburban areas serviced by Buyer's Agents?

Areas... decisions decisions. I've stopped looking at RE.com because I've lost focus and can't decide which area to concentrate on (enter time poor problem again).

VIC - Warrnambool, Ballarat, Werribee, Frankston, Traralgon
QLD - Ipswich, Townsville
NSW - Central Coast

Which of these would you favour or can you see a blaringly obvious omission?
 
Definitely Ipswich.

I'd watch out for Townsville. Its a hard market to see whats going to happen in the future.

I like Frankston too.
 
They say you should buy as soon as you can right?

Well, I don't, for whatever that might be worth.

Sometimes, doing nothing is a perfectly valid option. And sometimes, I think that holding out for a better investment can get better results than simply buying something as soon as you can.
 
How about if you already have 3 cash flow negative properties (2 purchased earlier this year) you concentrate on paying down the loans on these?? You have already purchased 2 in an environment where decent capital gains are looking unlikely for some time to come. Further to this you are planning on buying when you are too time poor to do your own research? :eek:
 
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I don't want to pay down the loans on the ones I have, I'd rather get the tax deductions and use the surplus cash to purchase another property. I'm permanently time poor and the other IPs were purchased via BA's when I was away for work in Canada.

Thanks for the recommendation on Ipswich Roachy. I have a friend living there so perhaps he can shed some light.
 
Hi RedCat

As you already have property in four diverse areas - Richmond VIC / Coburg VIC / Ashfield NSW / Auchenflower QLD - why not consider adding to your holdings in those areas?

Ask your property manager/s to have the sales department have a look for you

You already have working relationships but perhaps you also need 'working investments'.

Negative Gearing can be a real drain when all that is happening is that you are making up the shortfall

Every area has a mix of properties, and that mix can deliver quite a wide range of results

eg, Coburg has everything from factories to one bedroom apartments to multi-million dollar family homes

Perhaps if you look hard enough at what you already have, you will find your next property. It could even be the property next door!

Hope this helps
Kristine
 
Never quite understand why tax deductions are better than not having to lose money evey week...

It's like losing money on shares and being happy about it because you have CGT credits
 
Never quite understand why tax deductions are better than not having to lose money evey week...

Look, in an ideal world, you are right. However, it seems with IP's there are 3 things: Growth, Yield and Risk - but as others before me have said, you only get to choose any 2.

e.g. You can get high CG and low risk but this comes with low(er) yield - such as a unit close to CBD. Or you can get high yield, low risk but also low CG property - such as you might find out in a small country town. Other investors choose high CG, high yield properties but these come with higher risk.

Of course there are always some exceptions that break the rule - but you tend to 'luck-out' on these if you ever end up with them.

RedCat has chosen the high CG, low risk path - and that suits her for where she is at right now. That's why there is no one way to do things that is right for everybody - as everyone has individual different needs and circumstances.
 
Look, in an ideal world, you are right. However, it seems with IP's there are 3 things: Growth, Yield and Risk - but as others before me have said, you only get to choose any 2.

RedCat has chosen the high CG, low risk path - and that suits her for where she is at right now.
Personally I would not consider an OTP 2 bedroom unit purchase for $530k in Coburg the low risk path:
http://www.somersoft.com/forums/showthread.php?t=60152

Each to their own though I guess.

Your Growth/Yield/Risk rule looks to me like one of the property rules (read: myths) that the spruikers use to win clients and make themselves look property smart (like the old doubles in 7-10 years rule).
 
Your Growth/Yield/Risk rule looks to me like one of the property rules (read: myths) that the spruikers use to win clients and make themselves look property smart (like the old doubles in 7-10 years rule).

Hobo-jo - you would have done well if you had invested in property 10 yrs ago and followed the so called spruikers model!
 
God for bid that property should put money into your pocket rather than taking money out? :rolleyes:

Yes we all know the so-called golden rules are to buy CF+ property or property that we can 'add value to and/or renovate' so we're getting income straight away, but please remember that not everybody works a regular job and has weekends free to study property. I work 80 hours a week (and most weekends) and the only options I'm comfortable with are low maintence units that I can 'set and forget'. As a self-employed person making a very decent annual profit I'm in a good position to go with negative gearing. Not every person's situation is the same.

Personally I would not consider an OTP 2 bedroom unit purchase for $530k in Coburg the low risk path
Perhaps not, but if you read all the threads relating to this purchase you would know that a) I intend living in it in in 10 years so who bloody cares?, b) Pentridge is close to my heart for personal family reasons c) It's got a KILLER view of the city from the 8th floor. Maybe everything in your world is about profit but mine isn't and I still manage okay.

Further to this you are planning on buying when you are too time poor to do your own research?
I will be time-poor until I retire so I'd rather use a Buyer's Agent than sit on my hands and do nothing.

Your Growth/Yield/Risk rule looks to me like one of the property rules (read: myths) that the spruikers use to win clients and make themselves look property smart (like the old doubles in 7-10 years rule).
Propertunity is not spruiking (to me anyway). I've already used his services and was very pleased with the result.

You have already purchased 2 in an environment where decent capital gains are looking unlikely for some time to come.
You know nothing about my personal situation so unless you can answer this thread with a decent contribution to my original question (ie areas to focus on) please don't bother. Now I have to justify myself so I will. I come from a poor family but I worked hard and have been self-employed since I was 23. I have earnt some very good money in that time, but having no 'money sense' I continuously wasted it and gave it away to others. THIS time I decided to be smart and purchase as soon as possible because I KNEW that if I had access to the money I would waste it (again). Not everyone is perfect with their finances and this was my way of ensuring I couldn't waste it. Maybe you think it's stupid to have bought 2 IP's in March, but for my PERSONAL circumstances it was PERFECT. I didn't use equity in my PPOR to buy the IP's - I used excess funds from my business that I otherwise would have wasted on business class flights, electronic equipment and a car probably. And you know what? I'll do it next time I have an excess in funds too.
 
Definitely Frankston, still some cheapies around. One of the few Aussie suburbs, beachside no less, with cheap blocks that are mostly dual occ and redevelopable. I bought in this year and hope to get more if only the banks would be more generous.
 
Hobo-jo - you would have done well if you had invested in property 10 yrs ago and followed the so called spruikers model!
Well that's true :D, but I didn't have the income 10 years ago at 15 years of age to be thinking about property.

THIS time I decided to be smart and purchase as soon as possible because I KNEW that if I had access to the money I would waste it (again).
RedCat, thank you for your post explaining some of your recent purchases, it does help to have context to your decisions not having read all your previous posts. I don't necessarily think property is a smart purchase just because you would waste the money otherwise, with property there is the potential to lose more than you might have otherwise just spent.

Hopefully your BA was shrewd enough to get you a decent purchase. Goodluck with the next one.
 
Thanks for your understanding but trust me... buying the worst IP in the worst performing suburb in Australia would STILL be a better investment than how I've chosen to spend money in the past.
 
Definitely Frankston, still some cheapies around. One of the few Aussie suburbs, beachside no less, with cheap blocks that are mostly dual occ and redevelopable. I bought in this year and hope to get more if only the banks would be more generous.

I need super low-maintenance property. Do units fair well in Frankston do you think, or do I need to focus on land? It would be my preference to find a well located unit close to the beach vs a house with good land further from the beach. Is there any demand for units in Frankston do you think?
 
They say you should buy as soon as you can right? Since buying 2 IPs in March I haven't been able to make any clear decisions on the next step.

QUOTE]

WTF? buy as soon as you can??????
maybe buy when it makes 'sense' to do so based on your analysis of the facts, your expectations of the future, the level of insurance you can create with the transaction.

But never 'as soon as you can'.

The only exception to this rule is possibly the first property investment, whereby you are creating a hedge against ownership of a future residence regardless of whether it becomes an immediate or prospective future PPOR.

God i love comments such as these, so many people in the stock market prior to 2007 had similar thoughts until they were taught the errors of their ways.
 
I need super low-maintenance property. Do units fair well in Frankston do you think, or do I need to focus on land? It would be my preference to find a well located unit close to the beach vs a house with good land further from the beach. Is there any demand for units in Frankston do you think?

I'm no expert on Frankston, but I have bought there and based on my observations, my opinion is to buy a house in one of the nice family areas if you want a buy and hold and no issues. There are some dodgy areas there, and my main concern was tenants, I didn't want tenants who were going to cause me problems so bought in an area that would attract decent tenants. I have a house on 650m (can't be developed though) and is low maintenance. I haven't been to the property at all in the 12 months, a few minor things which the property manager attended to and have great tenants. It's not walking distance to beach, and I realise really long term the beach will be the best place but just seemed a bit dicey given what I saw near the beach/township and especially the station (although I think Gould Street is pretty fancy... there might be units along there?). I just wanted something I could buy, forget and hold onto for many years. And for what it's worth, I paid $290K and bank just valued it at about $340K a year later. Although with the budget you're talking, maybe even Frankston South? That's probably a bit nicer than Frankston. Have a look at the Frankston threads, there's pages and pages of advice.

As for when to buy, I'm with you RedCat, buy when you can, this is what I've just done. Everyone is saying don't buy in Melbourne, but I did just that. I'm in my early 30's so have a lot of years ahead of me. I bought in an area I think still has potential and is value for money. I don't have a crystal ball and don't know what's going to happen, so just did it. Maybe prices will stagnate, maybe they will go down a bit, but maybe they'll even go up a fraction. I don't know, all I know is, with the market having been so hot, I had lots of equity and have the cashflow to hold it, so why not.

I'm also with you on the forced savings, and don't think what you're doing is a bad idea, especially if you are buying well. I'm a pretty good saver, but I do know I'm saving even more by being forced to pay property costs, and in the mean time equity has far exceeded those few costs. So good on you, for acknowledging you aren't a good saver and finding a way around it to force yourself to do so. Goodluck.
 
They say you should buy as soon as you can right? Since buying 2 IPs in March I haven't been able to make any clear decisions on the next step.

I tend to favour inner city property but am thinking for diversification to look at regional or outer suburban property. Current bank will allow me to purchase $450-$500K and my husband has no property and he can purchase something in his name too probably also up to $500K.

I am with you RedCat on buy when you can. But from experience I would also study the property market cycles before buying. We have around 5-6 capital cities (Sydney, Melbourne, Brisbane, Perth, Canberra) and they all move in different cycles. So I would buy in a city that hasn't experienced a boom for atleast 3-4 years now and stay away from cities that have just recently experienced significant price rises.

As long as you can manage the risks of servicing your debts, increasing your asset base through leverage is the fastest way you can grow your equity when times are favourable.

I recommend reading Paul Do's book I Buy Houses to learn how you can time your entry.

Cheers,
Oracle.
 
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