Thanks to Y-man for interviewing and huge thanks to MIW for sharing! Hope you don’t mind few nosey questions.
You mentioned that you were interested in purchasing a property next door to the property you may own. Did you purchase them? Did they proved to be better than buying somewhere else??
The idea there is to have two blocks next to each other so for possible future subdivisions as they are all houses. The properties did not come up for sale so I am still waiting....
Recently one came up opposite our IP but that's not next door.
Here is your IP purchase list.
Year 2000: IP1, IP2 & IP3 in QLD with 50% deposit each.
Year 2002: IP4 in QLD with 20% deposit (25%-5% legal cost)
Year 2003: IP5 in WA - cash purchase through SMSF (cash)
Year 2004: IP6 in QLD with 20% deposit
Year 2006: IP7 in QLD with 20% deposit
Year 2006: IP8 in QLD with 20% deposit through trust
Year 2007: IP9 in VIC with 20% deposit through trust
Year 2007: IP10 in QLD with 20% deposit
Year xxxx: IP11 & IP12 in QLD through SMSF (cash)
I’m so surprised that there is nothing in NSW (even though you are living in NSW) but a lot in QLD! Is there any specific reason like you knew/learnt QLD better?
Yes, the reason for that is that we bought mainly new house and land. QLD was always more affordable for such properties, with less issues for maintenence, with reasonable rent, so in the end it was all relative. You would have probably needed to add another $100K to be able to purchase similar type of property in Sydney. At the end the total return was the main thing that mattered to us.
Also, at one stage we thought of moving to QLD for good so perhaps that impacted our decision too.
In addition we purchased our house for about $1.6mill in Sydney in 2008, we totally renovated it inside and partly outside so we thought, we certainly are balanced (only joking about the balance).
It is really amazing how you saved up those 20% deposits! You managed to save around 75K (assuming IP value was 300K) every two years!
Yes, you see now what I mean we did it the hard way, imagine we kept using the equity, we would have probably doubled the portfolio. It comes down to personal risk, as I suppose we were very low risk takers.
It can be done, by living fairly balanced life (I don't think it was below our means). We only changed our kitchen after 16 years, holidayed mainly in Australia, went to many picnics, took sandwiches to work...etc. We ran a deli too at some point so I suppose food did not cost us a lot and mum lived close by.
You see escaping from a communist country, you learn to live with neccessities in life rather than the wants/wishes.
I think what I am saying is anyone could do it too if they wanted something bad enough.
Between 2000 and 2007, you bought 10 IPs. After 2007 there are only two. Is it because of the market or you achieved your goal and now moving on to another?
Well, we always modified and created new goals. Remember we were the 'hares' so we started to learn about other investments.
We are not developers so we now invest with some. We do not like to speculate in the stock market but have friends that open their private companies so we invest with them (sophisticated investor's approach).
We buy some silver and gold. So what I am trying to communicate is that we try to diversify or hedge our income through other investment classes too.
Property is just one asset class and all asset classes become overvalued and undervalued. So we invest into other assets (please understand this is not easy as it involves greater risk).
We have strategies when to add but we don't only concentrate on that.
Also, at some point in time you stop accummulating and re-assess your goals. We choose to spend more time with kids, family, to enjoy life and we believe we should reap some of our rewards. Isn't this why we all accumulate so that we can choose what to do in th end? Sometimes other things become more important....
You see what's wonderful about this approach is that it permits you to have choices in your life.