Hi all,
Just thought I would give an update on my journey so far.
In June of last year I started the acquisition stage of my property investment journey with $10k in the bank.
I bought a small 2 bedroom unit in Glenroy in June. Was passed it at an auction for $180k, asking was $210k. Their bare reserve, after a disappointing auction result, was $185k. There were a couple of people playing funny buggers over a thousand here and a thousand there. I offered the reserve and got it with favourable terms - 90 day settlement, $10k deposit, access to vacant property 45 days prior to settlement.
Got in there each weekend for the last 45 days and cleaned up, painted, repaired etc. Total of ~ $1000 spent but well worth it. Rented for $260/week a week after settlement.
Kept saving, and in Feb this year bought a 3 bedroom house on 700sqm in Glenroy for $348k. Had tenants paying $350/week, kept them on for a couple of months and am now doing it up to move in. Again just cosmetic things, making it livable - not over capitalising. ~ $1000 spent again.
Also, in July I managed to sell my first apartment after holding it for 374 days (thank-you CGT discount!) for $232k. I wont reveal the sums but it worked out alright for me. I made this profit when I bought the place though.
So here I am now, nearly 18 months on and a lot wiser - but still relatively inexperienced. Have gone from having $10k in the bank to a nice buffer and a house that is appreciating (already worth $390k if sold today, so would make my money back). So at this point, I have to ask myself - what have I learnt?
There are a couple of things:
- the higher the gearing, the better the return (as long as you are happy with the risk)
- I prefer to buy properties that need some cosmetic work. I dont mind doing it and the pool of buyers is always less. Not everyone wants to get their hands dirty - less demand = better price for me
- Only buy where I can directly impact the value - there are always things out of your control, but if you can add value it is a better return
- the first 10% growth means breaking even. Therefore you need more than 10% to make a profit.
- Long-term buy and hold - i don't do it. I think long-term, but i plan short-term. If i cant get out of a deal in 2-3 years with a profit then there are better places to put my money. If after that time i think it is still worth it, then i may stay, but always plan for a short-medium term profit.
Just a few thoughts from someone who hasnt been doing this nearly long enough but is in an OK spot at the moment
Cheers,
Ben
Just thought I would give an update on my journey so far.
In June of last year I started the acquisition stage of my property investment journey with $10k in the bank.
I bought a small 2 bedroom unit in Glenroy in June. Was passed it at an auction for $180k, asking was $210k. Their bare reserve, after a disappointing auction result, was $185k. There were a couple of people playing funny buggers over a thousand here and a thousand there. I offered the reserve and got it with favourable terms - 90 day settlement, $10k deposit, access to vacant property 45 days prior to settlement.
Got in there each weekend for the last 45 days and cleaned up, painted, repaired etc. Total of ~ $1000 spent but well worth it. Rented for $260/week a week after settlement.
Kept saving, and in Feb this year bought a 3 bedroom house on 700sqm in Glenroy for $348k. Had tenants paying $350/week, kept them on for a couple of months and am now doing it up to move in. Again just cosmetic things, making it livable - not over capitalising. ~ $1000 spent again.
Also, in July I managed to sell my first apartment after holding it for 374 days (thank-you CGT discount!) for $232k. I wont reveal the sums but it worked out alright for me. I made this profit when I bought the place though.
So here I am now, nearly 18 months on and a lot wiser - but still relatively inexperienced. Have gone from having $10k in the bank to a nice buffer and a house that is appreciating (already worth $390k if sold today, so would make my money back). So at this point, I have to ask myself - what have I learnt?
There are a couple of things:
- the higher the gearing, the better the return (as long as you are happy with the risk)
- I prefer to buy properties that need some cosmetic work. I dont mind doing it and the pool of buyers is always less. Not everyone wants to get their hands dirty - less demand = better price for me
- Only buy where I can directly impact the value - there are always things out of your control, but if you can add value it is a better return
- the first 10% growth means breaking even. Therefore you need more than 10% to make a profit.
- Long-term buy and hold - i don't do it. I think long-term, but i plan short-term. If i cant get out of a deal in 2-3 years with a profit then there are better places to put my money. If after that time i think it is still worth it, then i may stay, but always plan for a short-medium term profit.
Just a few thoughts from someone who hasnt been doing this nearly long enough but is in an OK spot at the moment
Cheers,
Ben