Diversity and Property......

From: Alan Hill


There's been much talk on the Forum of late that in many places such as Sydney and Melbourne we're either near, at, or just over the Market Peak.

There are some, such as the self-proclaimed 'conservative old fart'(otherwise known as Gee Cee!) indicating that he's fixing up property for sale and will probably buy back into the market at a later date when things have cooled down.

Indeed buying in and out of the Property Cycle is not an uncommon practice.......which finally brings me to my point/question(aren't you glad I eventually got there!).

For those that are partially selling out for a period, or indeed just stopped buying for a period, what do you intend doing with your extra available cash and/or available investment potential?

Sure there are other options still within the Property arena such as paying off additional funds on mortgages, looking even harder for bargains, renovating etc. but what other options are people who are looking at 'a little break' intending to do?

Putting extra money in a business, investing in shares etc. might come to mind as some options, but what do you think you'll do?

While this is obviously a Property Forum, it's times like this within the Property Cycle that I've been looking to the future at what other options I have available to me, in conjunction with my property portfolio, to ensure I keep getting maximum return.

Interested to get some feedback on this one.......



:)
 
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Reply: 1
From: Paul Zagoridis


I park excess cash in a Line of Credit and use a small percentage to trade the stock market.

As a fan of businesses I still remind myself of two things 1) most business-people own a job not a biz & 2) 80% (or some huge %) of small businesses don't last 5 years. At least my IP is still there in 5 years.


Paul Zag
Dreamspinner
WealthEsteem coming soon at...
http://wealthesteem.dyndns.org/
 
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Reply: 1.1
From: Steve Navra


Alan,

Diversity is the way to go:
Most buy property for capital gain, others for the income; either way it would be wasteful not to divert these dollars (The exact same dollars)into another investment.

It is about using the same dollar many times over so:

Dollars into property for leverage, which provides income and capital growth.

The income and capital growth into a cash fund, safely housed and converted into an income stream for further serviceability.

Resulting income stream into shares for capital growth and dividend income.

The returns from the shares into your LOC to reduce the property loans and thus create opportunity to acquire more property.

A wonderful cycle of optimised use of the same dollar 6 times.

Home:
1) Capital growth
2) <Rental income> (Not paying rent to someone else)

Investment Property:
3) Capital growth
4) Rental income

Cashbond: for cashflow and extra serviceability

Shares:
5) Capital growth
6) Dividend income.

Anyway, this is how I do it.

Regards,

Steve
 
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Reply: 1.1.1
From: Splinter Wood


Hi Steve,

Do you wanna put some Percentages %%% on these sectors ?

SW
 
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