300k savings to invest

My partner and I currently have 3 investment properties between us (2 in Melb and 1 in Brisbane ? all apartments)

We were planning on rebuilding our PPOR (knockdown/rebuild) but now potentially looking at pushing that out a few more years and invest the cash ($300k) we currently have sitting in offset accounts and purchasing more IPs.

We have excellent serviceability and no non-deductible debt so getting more loans won't really be an issue.

Strategy is to buy and hold for long term, and capital growth is the focus for us at the moment.
Looking for houses now with good land component with view to doing sub-division about 5 to 10 years down the track if figures stack up

This is what I was thinking of doing -

Option 1 - Use existing cash savings as a 20% deposit for 3 x $500k~ houses on blocks with sub dividable potential (in different states)
Option 2 ? Use existing savings as a 20% deposit on 2 x $750k~ houses on blocks with sub dividable potential in more blue chip suburbs than option 1 (in different states)

Do you think we'd be better spreading this out over 3 properties rather than 2 properties? Happy to hear of any other suggestions.

Cheers
 
Cash flow holding will be (in most cases) easier with the lower price brackets due to slightly higher yields, smaller interest loss whilst constructing each one, and thus slightly more diversified risk.

The flip side of this is the extra effort of constructing 3 vs 2, and whether you can get properties/locations you are happy to hold onto long term in the price range.
 
Your criteria should be finding a good deal, not the investment size.

Thats right. And for a long term buy, develop hold I would want to be aiming for:

1: A region that is not at the top of current cycle
2: A region with good fundamental growth drivers for future
3: A suburb that looks to be in early stages of gentrifying
4: A block with suitable zoning and enough sqmtrs
5: A useable rentable house for now(not a knockdown)
6: A cracker purchase price
 
if u still have PPOR debt, split the home loan into x and the 300 from the offset u want to spend, take the 300 and pay into the new 300 k loan split

Redraw from the 300 k for the deposit and costs............

Debt / tax deductability optimisation

ta
rolf
 
Your criteria should be finding a good deal, not the investment size.

Fair point and I will definitely do my due diligence....I intend to spread these purchases out over the next 12 months+ so will have plenty of time to narrow down what I want.....I guess I was asking if people generally think it's better to spread your risk a bit more.
 
if u still have PPOR debt, split the home loan into x and the 300 from the offset u want to spend, take the 300 and pay into the new 300 k loan split

Redraw from the 300 k for the deposit and costs............

Debt / tax deductability optimisation

ta
rolf

No PPOR debt (non deductible debt)...however I do have an equity loan against my PPOR and my partner will have an equity loan against her IP so we will use this equity for the deposits and move the cash in offsets around against the various IP loans if any of them are negatively geared.
 
No PPOR debt (non deductible debt)...however I do have an equity loan against my PPOR and my partner will have an equity loan against her IP so we will use this equity for the deposits and move the cash in offsets around against the various IP loans if any of them are negatively geared.

thats a good soln

smart use of debt

ta
rolf
 
Thats right. And for a long term buy, develop hold I would want to be aiming for:

1: A region that is not at the top of current cycle
2: A region with good fundamental growth drivers for future
3: A suburb that looks to be in early stages of gentrifying
4: A block with suitable zoning and enough sqmtrs
5: A useable rentable house for now(not a knockdown)
6: A cracker purchase price

Thanks Knightm....some very good points here for me to keep in mind. As I will probably be purchasing the next one interstate I may well use a buyer's agent.

Will a buyer's agent investigate things like zoning and look for extra factors in a suitable potential development site such as slope, ease of service connections etc or is this getting a bit beyond the typical services they offer?
 
1: A region that is not at the top of current cycle
2: A region with good fundamental growth drivers for future
3: A suburb that looks to be in early stages of gentrifying
4: A block with suitable zoning and enough sqmtrs
5: A useable rentable house for now(not a knockdown)
6: A cracker purchase price

knightm - I'll pay you if you can find something satisfies all that :)
 
Will a buyer's agent investigate things like zoning and look for extra factors in a suitable potential development site such as slope, ease of service connections etc or is this getting a bit beyond the typical services they offer?

I can't comment on what other BA's offer, I would imagine some are happy to find da sites. Its not typical for me or my core biz, but I have helped find 1 or 2 dev sites for clients. The thing is I can't carry the due diligence risk for you so even if I find something with certain characteristics and "x" zoning - you would still need to do your own dd in that council area to have any confidence about future options. Site characteristics such as easements and slope are ok to include in a wish list but as I said if you had a long term plan to develop yrs in the future I wouldn't want cranky calls saying "you know that place you found me, I can't put enough townhouses on it....." hence your own dd on top of any wish list is still critical. It would be your place after all. The other thing is councils change their da rules from time to time so nothing is perfect. My preference is to do this sort of thing only in the local council areas close to me - primarily south coast, illawarra and southern highlands. Thankfully thats a big area with plenty of potential.
 
knightm - I'll pay you if you can find something satisfies all that :)

Well its a wish list after all. And as Strongy said they are out there. I am not going to chest beat and say its easy to find that sort of combination win business. Its not. Several of the points require some opinion, crystal balling and obviously location risk along with the pre existing development risk. Long term most areas revert back towards the mean, but if you were going to buy something to develop within 1 cycle I would want to at least try and apply something like a list of criteria such as the one previously mentioned to maximise medium term equity. Not saying it would be perfect at all, just a way of weeding through the masses of property out there as the OP seems to be casting a very broad within their chosen strategy.
 
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