Have I made a mistake?

This is what I have always thought. I look at the top 20 wealthiest people in australia and find that none of them have got there by building a humongous resi portfolio by neg gearing. I wonder whether any of them hold any resi IPs at all. In contrast, some of them hold massive comm IP portfolios and is the reason why they are on the top 20 list.

I suspect many of the Top 20 were HUGE risk takers (not something you'd be comfortable with) and/or inherited a successful business.
Look at Nathan Tinkler - he took the huge risks, made it big then crashed around his ears.
So I don't recommend emulating them. I think there are things we can learn from them but there is a myriad of opportunity between a fixed term deposit and putting it all on red/black.
I also suspect that the Commerical IPs works well in their business model - i.e. they need to own factories, warehouses, office buildings, mine sites, construction sites blah blah. They own and rent them out to their various business ventures.
Resi IPs can be a career if you love it, or simply a tool for making money. I'm lucky in that I love it (especially developing) and it makes money for me.
 
I agree, no one really needs more than a couple of mil and a good house. However, I think that the top 20 are there not because they need a couple of billion but enjoy seeing the success of their business ventures wherein the money is like the scoreboard. My question is whether passive resi property investment even when done successfully using neg gearing is a good enough investment / business model to bring people into great wealth.

Passive property investment probably won't get you there. Forget positive or negative- in itself it's not enough to be super rich.

As regards business- the people who I've seen do well have some sort of ruthlessness and a willingness to step on people. I'm not like that- and from what you've said about your staff, you're not either.
 
I hope that luck only plays a small part. Maybe determination, self belief, perserverance, mitigated risk and some sound underlying business principles should form the majority role?
It's only when you get older and look back,that you may well find that there is no such thing as luck as we al think we know it,as you will find over time your own "Character"defines your own "Destiny" ..imho..
 
Resi IPs can be a career if you love it, or simply a tool for making money. I'm lucky in that I love it (especially developing) and it makes money for me.

Thats the best scenario.

Developing is like the pinnacle/elite echelon of resi investing and I don't think most resi investors do it nor have the skills/aptitude to do. I think once you start developing, you have gone far beyond the average buy and hold / pos gear/cashflow / neg gear skill sets of the majority of resi investors. And ultimately that can lead to immense wealth ala Triguboff of Meriton fame, a top 20 club member via resi property development.
 
Hey guys, just been offered to buy the place for $270,000 and renting for 350-360 per week. My only issue is that it is 2 years old and there are a few issues with the building already which require a special levy of 2000 dollars per owner. If I buy, then the vendor will have to pay for it, but I'm worried about future special levies? The builder has already gone bankrupt so there's no hope there. Does anyone have any experience in buying in blocks like this - if so is this just a disaster waiting to happen? It was originally sold OTP and 270,000 seems like an OK price.

0mTE2DR.png
 
Looks like the vendor will pay the current special levy but there will be another one coming up in 6 months around the same amount.

I contacted the strata management team and they seemed to be quite proactive with things. They say the major issue with the complex is that the waterproofing was not done correctly for all the showers and hence have to be redone (hence the special levies), but states that once that it is complete, that will "hopefully" be the last major work required. Not sure what to make of it but there is no home warranty on the builders and apparently 3 builders walked off the job.
 
Back
Top