How do you get that dream beachside property????

P

Property Meister

So a question to all the creative/creative minded people here

Im sure many of us, including myself one day wish to own their exclusive beachside property, and I mean BEACHSIDE, so you can basically jump off your balcony and into the water ie be the first house from the beach. basically a toy house, just like a toy car= Ferrari, impractical, expensive does the same things as something thats worth 1/2 of it

now, we we all understand that these sort of properties are few and far and even in the crappier suburbs, they still fetch over $1m+

Now, personally, I would like to have one of these properties so I can visit there on hot days and sit on the beach or on your balcony looking over the beach, and yes, I do enjoy the "W*&K" factor of having that beachside property or posh property, however, on a personal note, I would rather not have it at all in these suburbs if say I was going to get a dump of a property that has no views or you can';t walk to the beach or its impossible/impractical to get there, in other words, I would rather have nothing in this area if I can't have this dream beachside property, and instead of owning one of these and one the assumption I am financially sufficient, I would simply rent out one of these for the weekend, and have a party and invite all my friends.

so what are some techniques that the people can use to get one of these, or eventually get one of these. and Id like to have mine as close to the city as possible, so not 3-6 hours drive out....

my only suggestion is,
1. I went through aspendale today, and thought how nice the beaches were, there was a lot of people, the beachside properties are selling for between 1.3-$2million, however, there were a few 3bdr apartments, that were quite nice that I would be happy with, these were about $780k, so do I purchase one of these, and attempt to rent it out as holiday accomodation, so hopefully. I get the 5-6 % yield????? or if the property cannot be rented out at a great enough rent or period of the year, it would be silly to hold onto a property that is simply costing you and not generating ongoing income, unless you have bucket loads of $$$ to throw away, or you really really really want it, now for me $780k is far more affordable to most compared to $1.3-2.0million

2. Go to the closest to the city suburb with beaches, that has no interest and nothing, and I mean ZILCH, buy all the beachside land which will be cheap because nobody wants it, and start building and prey to god that there is a mini boom in that area

3.
Buy a big block of land on the beachside in the premium suburbs (probably cost $2m -$5m), subdivide ,and do plans for however many apartments you can fit on there, build, make $$$, and keep the smalles/cheapest one for yourself.

so what can those who are in the process of working towards financial freedom do instead of paying say $5million+ at the end of their property cycle in 5, 10, 15, 20, 30, 40 years time?

NOTE: The above is not finacial advice and should not be taken as it is most likely CR4PPY advice, and you will lose!
 
Last edited:
I guess something like this will do....
vic-portsea.jpg
 
Property Meister said:
So a question to all the creative/creative minded people here

Im sure many of us, including myself one day wish to own their exclusive beachside property, and I mean BEACHSIDE, so you can basically jump off your balcony and into the water ie be the first house from the beach. basically a toy house, just like a toy car= Ferrari

now, we we all understand that these sort of properties are few and far and even in the crappier suburbs, they still fetch over $1m+

Now, personally, I would like to have one of these properties so I can visit there on hot days and sit on the beach or on your balcony looking over the beach, and yes, I do enjoy the "W*&K" factor of having that beachside property or posh property, however, on a personal note, I would rather not have at all in these suburbs if say I was going to get a dump of a property that has no views or you can';t walk to the beach or its impossible/impractical to get there, in other words, I would rather have nothing in this area if I can't have this dream beachside property, and assuming I am financially sufficient, I would simply rent out one of these for the weekend, and have a party and invite all my friends.

so what are some techniques that the people can use to get one of these, or eventually get one of these. and Id like to have mine as close to the city as possible, so not 3-6 hours drive out....

my only suggestion is,
1. I went through aspendale today, and thought how nice the beaches were, there was a lot of people, the beachside properties are selling for between 1.3-$2million, however, there were a few 3bdr apartments, that were quite nice that I would be happy with, these were about $780k, so do I purchase one of these, and attempt to rent it out as holiday accomodation, so hopefully. I get the 5-6 % yield????? or if the property cannot be rented out at a great enough rent or period of the year, it would be silly to hold onto a property that is simply costing you and not generating ongoing income, unless you have bucket loads of $$$ to throw away, or you really really really want it, now for me $780k is far more affordable to most compared to $1.3-2.0million

2. Go to the closest to the city suburb with beaches, that has no interest and nothing, and I mean ZILCH, buy all the beachside land which will be cheap because nobody wants it, and start building and prey to god that there is a mini boom in that area

3.
Buy a big block of land on the beachside in the premium suburbs (probably cost $2m -$5m), subdivide ,and do plans for however many apartments you can fit on there, build, make $$$, and keep the smalles/cheapest one for yourself.

NOTE: The above is not finacial advice and should not be taken as it is most likely CR4PPY advice, and you will lose!
Click to expand...

we lived in a crappy absloute beachfront 2 bedder if you like sand flies and mozzies and people walking across your back yard to go fishing go for it was nice for about a month just my 2 cents
 
Hi Property Meister

You mean something like this?

http://www.somersoft.com/forums/showthread.php?t=25708

We plan to move in in February, 2011 or soon thereafter

We bought the property as a five year plan, and last Saturday actually went out and hit the display homes for the first time.

We know that we will not build a project home - for starters, we want a six car basement garage - and a tower so we can watch the shipping lanes - but we are looking for a builder who builds the style of house we can both live in.

Mike and I have each been working for 43 years. Neither of us are brain surgeons, but through property investment Mike will have the sea kayak on the wall of the garage, and be able to walk to the end of the street to the water, and I will have the sand to sit on and enjoy the sunsets.

Nothing flash, just a good quality family home for the Third Age.

The way to do it is to invest well and to invest often. Buy what you can afford as often as you can. Buy and Hold will earn you the Beachside House quicker than all the fancy plans will ever do.

Good luck. We have two enjoyable years ahead of us to plan for and then watch as our sand castle becomes a reality.

Cheers
Kristine
 
Well, I guess we sort of stumbled across ours. I was looking for a renovator and good CG candidate and when I found this ugly duckling little block of units a street back from the beach (but still with views) we just went for it. Took us a year to renovate (while fully rented) and in the process of working there we completely fell in love with the place and the area.

It's still fully rented and just a tad too far away to commute from our current jobs. But I'm pretty sure we'll moving there one day, either to live in one of the units or convert the whole thing into 1 house or knock down and rebuild it.

Did we do the right thing in buying it (rather than going for something in a capital city etc.)? I still think it is an excellent investment but I'm sure the beach was a lure for us personally and spending a lot of time renovating it was certainly made sweeter by doing it in a lovely spot than next to a freeway in an industrial estate.

It also opened up the option of a different lifestyle / early part-time retirement sooner and more realistically for us than just dreaming of a life on the beach.

So I'm sure it's fine to wait and reward yourself with your dream location when you've made financial independence. For us financial independence is not a definite point yet (how much is enough??) so getting something on the beach early has helped us redefine our goals.

kaf
 
Kristine.. said:
The way to do it is to invest well and to invest often. Buy what you can afford as often as you can. Buy and Hold will earn you the Beachside House quicker than all the fancy plans will ever do.
Click to expand...
That's it in a nutshell!

I saw this thread and one other this morning and was tempted to reply to both with a one word response: "patience". There's no shortcuts to wealth that don't come laden with far too much risk. Be patient and live comfortably within your means whilst investing the balance and all you desire will be yours. But don't expect it tomorrow. Kristine is buying hers for her "third life" stage. That feels about right to me.

I own a beach house in North Narrabeen and own it outright, but its not absolute beachfront. Its sub-$1M and the beachfront stuff is all $3M+. I would love to own an absolute waterfront property but simply can't afford it at present. I'll keep living modestly and investing on the side until maybe one day, in a few more property cycles time, I will be able to afford it. Until then, I am more than content with what I have and don't lose to much sleep lamenting the absence of a "thing".

Life's too short to get too hung up on not living the millionaire lifestyle. You don't need that flash pad to be as happy as a millionaire! :D

Cheers,
Michael
 
I see everyone,

but my personal quell is the following,

I understand its all about patience, working hard etc. perfectly understand that you need lots of hard work and time, that is fine

say that in my property cycle, I amass say $3 mill in wealth, however, if I buy a $3mill beachside property at the end then thats all my hard work put into over the years all put into the one property,

but say I purchased this property for $700k say 10-20 years prior to that, and assuming the rental returns are fair anot 0%, wouldn't it be better to buy it now and then in 10-20 years time, its worth $3 mill.

so I guess my question is on the approach on how to get there,

so in 10-20 years time after you have finished in property, you might have say $2.8m in cash and a $3mill beachside property hence ,the earlier initial sacrifices have paid off more...

hope I am making sense!
 
Property Meister,

The real crux of your question then is around portfolio mix within a purely property portfolio. How much is dedicated to your PPOR for pure "use" benefits, and how much is left as IPs for passive income benefits in retirement. The timing of the transition is less important, as we should assume that all properties rise at much the same rate and not complicate the question with arguments around beachside properties being relative out/under-performers in price appreciation terms.

For me, I want about $2-3M in unencumbered IPs in retirement generating me a passive income on about a 5-6% gross yield on valuation. What's left of my net worth can happily go into my PPOR.

That's why I suggested that the way to achieve that beachside PPOR is just to invest, invest, invest. The more net worth you have in property assets, the more you can afford to allocate to your PPOR and reduce your passive income generating IP allocation. The timing of the beachside purchase is largely irrelevant, as I presumed earlier that it won't relatively outperform your other IPs.

If you get that bit clear in your head, then buying now or in 10 years time becomes an irrelevant question. The only thing you should be doing is maximising the size of your portfolio so that in time you can transfer some of that portfolio into a really nice PPOR in retirement.

Hope that makes sense.

Cheers,
Michael
 
it's an interesting proposition that we have just (and still are) facing.

our ppor is on the market because we've found a fantastic beachfront property that we - at the time - thought would be lovely to live in. the new place would cost around the same as current ppor, so no "cash" gain.

however, now that the emotions have died down and rational thought has kicked in ... are we better of still selling the ppor, but taking the cg from that, buying something more suitable, but still near the beach, for a family of 3 (now that the 3 adult kids no longer live with us we no longer need 5 bedrooms and 3 bathrooms), having no debt against the new ppor and reducing the ip debt to make them positive.

then using the balance to travel extensively and invest for early parttime retirement - hubby would go starkers with full time retirement.

we could then spend weeks on end sailing the whitsundays on the yacht (ultimate beachfront) with no rush to get home or spend some serious time o/seas.

i'm now thinking that the beachfront would tie us to one location and also tie up to much equity/cash for to long.
 
Lizzie,

Spot on!

The question is more one of "how much to allocate to the PPOR". The more you allocate to your PPOR for that particular lifestyle choice, the less is available for other options such as paying down IP debt and bringing forward retirement. That's why I argued to live comfortably within your means. If you're extremely wealthy with a very high net worth, then you can afford the trophy house without compromising your other lifestyle options. But to devote too much of your net worth to your PPOR deprives you of far too much in other areas in my humble opinion.

That's why I start with the "other" requirements first like passive income in early retirement, then work backwards to figure out how much is left for a flashy PPOR. If I have more, then I can devote more to the PPOR, but that isn't my first consideration when determining what my asset allocation looks like.

PS I like your second option much better. Sailing the Whitsundays in early partial retirement ranks much higher than the flashy beachfront PPOR IMHO.

Cheers,
Michael
 
We did something like this.

Bought an IP in a "dream" location (land value) five years ago when just married and was only able to hold onto it because of the negative gearing. About to move in to it at the end of this month. It was bought just because of the location (quick stroll to beach, premier beachside suburb near CBD, close to schools, services etc) with a view to moving in eventually. We have a young family (now) so don't need a mansion yet although some expansion will be required over the next 10 years - we were just buying the location and big block but it was a big stretch for us given the suburb and the fact we already had a PPOR (and other IPs) to service as well.

Our idea then was that we could buy this property (just) and would probably never be able to again. Our portfolio (inc this property) has since more than doubled in value so we can't complain at all.

Would we do it again? The clear answer to that is no. Had we bought high yielding IPs in sub median suburbs instead, the same level of negative gearing would have been spread over a much bigger (3-4x at least) asset base, which would also have more than doubled in value. Rent increases across that hypothetical portfolio would have seen me seriously considering retirement at a time when our kids are still toddlers - an option that is much more valuable (in hindsight). The higher level of income and assets would also have meant purchasing this house now would have been a doddle anyway if I wanted to keep working for a bit longer.

My suggestion is to think BIG! If you have $1m per year in rental income (and associated assets) then it is amazing what you can buy. Get to that type of level as fast as you can, then wonder about what you are suddenly able to buy with the money...
 
i see that it works differently for each individual especially when considering their circumstances. I guess maybe what i am trying to see if someone knows is that say currently average yield is four percent and then you could secure one of these cheaper dream locations for say a yield of three percent or less. Say in ten years time the property had doubled .which is mathematically better to sacrifice the one percent yield or say pay the extra 100% at a later date
 
Property Meister said:
I guess maybe what i am trying to see if someone knows is that say currently average yield is four percent and then you could secure one of these cheaper dream locations for say a yield of three percent or less. Say in ten years time the property had doubled .which is mathematically better to sacrifice the one percent yield or say pay the extra 100% at a later date
Click to expand...
Hi Property Meister,

I think HiEquity has already answered that question...

HiEquity said:
Would we do it again? The clear answer to that is no. Had we bought high yielding IPs in sub median suburbs instead, the same level of negative gearing would have been spread over a much bigger (3-4x at least) asset base, which would also have more than doubled in value. Rent increases across that hypothetical portfolio would have seen me seriously considering retirement at a time when our kids are still toddlers - an option that is much more valuable (in hindsight).
Click to expand...

The point is that you need to build wealth. Fullstop. Getting that dream property early may not maximise your wealth creation options. If, however, you think it will outperform your other growth options, then maybe it makes sense to put it in your property mix early. My personal perspective is that it probably won't outperform, so buy a good property portfolio which will perform well and trade some of it in for the dream PPOR in time.

Having said that, if you are buying something in a sought after location, then its relative capital growth prospects might be very good. In which case, sacrificing a little bit of yield for that extra growth makes sense. Whether you plan to make it a PPOR down the track or not, you should still consider this when building your portfolio. A mix of growth and yield assets makes sense. My personal preference is for growth over yield assets as I personally believe that growth assets are better from an IRR perspective than yield assets. But that's just a personal preference.

Cheers,
Michael
 
HiEquity said:
My suggestion is to think BIG! If you have $1m per year in rental income (and associated assets) then it is amazing what you can buy.
Click to expand...
That's what I'm talking about!!!.

But geez, how many IP's or other investments is that going to take.

$1m in rental income....love it.

Regards
Marty
 
kissfan said:
That's what I'm talking about!!!.

But geez, how many IP's or other investments is that going to take.

$1m in rental income....love it.

Regards
Marty
Click to expand...

48!

Well Ok, I just worked it out based on my current situation.

Might need for a few com & industrial properties in the mix :)
 
kissfan said:
I don't think there would be too many here earning $1 MILLION P/A from rental income :eek:
Click to expand...

Hi Marty

Depends on what you mean by "too many". I guess I know of a few at that level (in gross rent) - my statement regarding "quite a few" was an extrapolation based on me being pretty sure I don't know all of them! By the way, just thinking about it I would know at least five people in that range myself who don't post on this forum (to my knowledge).

Which is quite amazing actually now that I think about it... my sample bias may be giving me a skewed view of the general population but I do see a lot of wealth out there...
 
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