Do people buy million $ plus properties for investing?
- Thread starter AJ_
- Start date
Properties in these price ranges certainly do occur, but they're less common.
The question of performance is subjective. You read all the time about how some wealthy person purchase a property for $6M then sold it a few years later for $10M. You probably wouldn't get a 5% rental yield for residential property in this price range though (although I'd probably expect rental yield over growth in this price range for commercial property).
The question of performance is subjective. You read all the time about how some wealthy person purchase a property for $6M then sold it a few years later for $10M. You probably wouldn't get a 5% rental yield for residential property in this price range though (although I'd probably expect rental yield over growth in this price range for commercial property).
I've heard that the cycles for top end properties run on different cycles to standard residential- perhaps linked more to the stock market. The story went that when the stock market went extremely well, people with a late exposure, or in the business, could afford more expensive properties.
That was the story anyway. I've had no experience in that end of the property market whatsoever unfortunately.
That was the story anyway. I've had no experience in that end of the property market whatsoever unfortunately.
Only if you sell the PPOR/downgrade.
Of course.
Not necessarily. An astute investor may sell and use the the money to buy a rundown house nearby at a bargain price.
Then renovate/redevelop with surplus funds from the prior sale. The end result could be a similar house plus cash in the hand.
With the added bonus of nil CGT as its a PPOR
Yes, timing is important, but then if it is your primary residence then there is "the love" so you have time on your side.
I will be driving everyone insane with the same old comment... here I go again....sorry
OK, purchased our primary property for $185,000, 16 years later worth $1.325M, inner city area, good location. We then moved on, same area, our property we live in now is probably close to $2M, gone backwards about $200-300K, same area, why??? cycles, supply and demand, when the market was booming, mining days, these properties would be snapped up, unfortunately they fall harder.
Just because an area is blue chip worth xxx does not mean it will continue to grow, this is a fallacy, it will always come back to supply and demand and when we are talking bigger $ if the economy has a hiccup it will hurt the upper end.
MTR
Not necessarily. An astute investor may sell and use the the money to buy a rundown house nearby at a bargain price.
Then renovate/redevelop with surplus funds from the prior sale. The end result could be a similar house plus cash in the hand.
With the added bonus of nil CGT as its a PPOR
I just can't imagine someone who is used to and conditioned to living in say a 5 mil home being bothered going through such a situation.
As it's highly likely someone in that position would have considerable other assets to play around with and not put them in a compromised position.
There are exceptions to this of course, such as if someone inherited a mansion but generally has a low income and no other substantial assets.
Yes people do invest in expensive properties. I see you are in Melbourne. That city and its surrounds are choc-a-bloc full of expensive properties well above your stated range....and all of them are owned by investor.
The property at 1 Spring Street, on the corner there in your CBD was for sale recently. It was rented on a long long term lease to Shell (not a bad Tenant) for over $ 10 million per annum, and Shell picked up the tab for all expenses obviously.
People tell me they perform "more than satisfactorily" on just about any measure you care to choose.
Homes for 5 million don't even rate a mention when you get into the good stuff.
Go to it AJ !! The sky is the limit - literally.
Of course people in these areas, like every other area, buy in their own backyard a) because they know the area; b) represents value; c) is local and can be seen; d) represents good value; e) not much competition etc
For various reasons, it is better for many to rent in these areas eg: relocated, moving closer to schools, looking for the right property etc.
There are plenty of examples just on the North Shore to be seen:
Mosman
Bradleys Head
Northwood
Northbridge
Willoughby
The issue with many of these, a 10% drop in capital values is more than what many pay for an ip in other areas.
For various reasons, it is better for many to rent in these areas eg: relocated, moving closer to schools, looking for the right property etc.
There are plenty of examples just on the North Shore to be seen:
Mosman
Bradleys Head
Northwood
Northbridge
Willoughby
The issue with many of these, a 10% drop in capital values is more than what many pay for an ip in other areas.
Not in the normal sense - they generally have crap yield but you may buy million dollar properties for the land it is on to carve it up at a later stage, for a PPOR with the view that it will grow well etc.
We are looking for a new PPOR and after outlining costs to build to DH he surprisingly asked "and how much will it be worth once its built?". Even he expected that if I had done the sums on the property that I would want it to worth more than what we paid for it. He knows me too well - of course I had the answer
It's hard not to look at PPOR without IP goggles
Looks like we'll be buying 12 acres on the river 30 kms from the CBD in the wine region. Long term growth opportunities are good and it's in a depressed section of the market which is showing some signs of recovery. It's been on the market for approx 18mths from what I can gather.
You still have to be careful and need to be aware of price vs value.
Paying more doesn't always equate to better quality as found out by Metroland in 2012
Full article here
Cheers,
Oracle.
A house in Adelaide just sold for $5m plus (cant find exact sale price, but was on market for $7.5m!), and is now being offered for rent at $2500 per week, 3% return before expenses. No idea why you would spend that much for such a poor return, especially given the market for houses at that price is extremely limited so decent capital gain is far from guaranteed.
I would much rather spend the $5m in Sydney where the capital growth and pool of available tenants is less limited.
$5m in Adelaide equates to buying the best house in the city and goes against buying the worst house in the best street in a big way.
Heres's a good buy:
http://www.realestate.com.au/property-house-wa-peppermint+grove-113336623
Peppermint Grove 6x5 on 1818m2 block with tennis court. On market for $4.9m... but it first listed on the market in 2012 for $7.95m.
http://www.realestate.com.au/property-house-wa-peppermint+grove-113336623
Peppermint Grove 6x5 on 1818m2 block with tennis court. On market for $4.9m... but it first listed on the market in 2012 for $7.95m.
Perhaps they fully intend to make it their home but can't move into for a while so will rent it out for whatever crappy return they can get in the meantime.
Apart from my first buy when I started working, I've always $1m+ thus far. So yes some people do.
If you are able to play at this level; yes.
I have heard of a $3m house being bought for $2.5m, spend $250k on a reno, and sell for $4, etc.
These sorts of places are worth doing for a quick flip if you have access to the funds to hold it while it all takes place.
Down here at the pleb level, the $300k buy/reno/flip are not really worth the effort, but are virtually the same effort as the high end one....much better return for effort.
I don't think anyone would buy the $3m house to rent out - unless it was a hotel.
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