How many properties have you bought in the last 2 years?

[Body-By-Jake]

(Note: The poll above refers to the majority of investors, as most I assume buy or build houses or units - FOR COMMERCIAL/INDUSTRIAL, ETC INVESTORS THIS POLL APPLIES TO YOU AS WELL - P.S. A block of 6 units for example means 6 IPs for this poll)

The reasoning behind this question is a couple of things: "Do you buy at least 1 property each year?" or "Do you buy 1 property, renovate it, have it re-valued, then use the added equity/increase in value to go & buy another property, & re-do the process again - the leapfrogging technique like Peter Spann, Reno Kings & others have done?" Because with the tons of information out there in the marketplace I'm sure anyone could keep on using the leapfrogging technique to grow wealth easily & fast. If you haven't bought 2 or more properties in the last 2 years, why not?

With the amount of information out there regarding property investment, etc it's all a bit of information overload; which technique to use, which way to go, cashflow positive or negative gear, trust or own name, new or old, everything!!! There's seems to be no right or wrong answer to being successful & wealthy through property investment.

Why constantly look at hundreds of properties; make tons of offers, when you could just: get your finance in order; wait for the right property (as a safe bet: you only need 1 property each year) & then pounce & snap it up at the right price! Seems easy!

One safe method I think for me is: If I could afford to buy just 1 property (house, unit, etc) each year & do this for the next 15 years, then I think I would be setup for life!! By that stage sell 5-7 properties, keep the rest, stop work & live off the income from the rental properties. Seems like a simple & safe formula that our very own Jan & Ian Somers have done over the past 20 years or so without too much complication.

P.S. I am not against learning lots of new information as obviously it will educate me & therefore I will be able to speed up the process by being able to buy instead of 1 property but maybe 2-3 or more properties each year; however I would think at some point the banks are going to say no to lending you more money to more buy IPs.

 

[Dazz]

(Note: The poll above refers to the majority of investors, as most I assume buy or build houses or units - sorry to those who buy commercial/industrial property

That's OK, I'll just standby whistling Dixie.....

....although, reading the remainder of your questions, I cannot fathom why non-residential investors cannot participate ?? What's the diff ??

One safe method I think for me is: If I could afford to buy just 1 property (house, unit, etc) each year & do this for the next 15 years, then I think I would be setup for life!! By that stage sell 5-7 properties, keep the rest, stop work & live off the income from the rental properties. Seems like a simple & safe formula that our very own Jan & Ian Somers have done over the past 20 years or so without too much complication.

Are you sure about that ?? The last article I read about the Somers in API (was it May '07 edition), Jan was quoted as saying she hadn't sold any since the mid 70's. They certainly have not used that strategy of buying a whole bunch, and then selling a portion off to eliminate the debt, and then live off the clear rents generated from the mortgage free houses. Undoubtedly that's what she wrote in her books, but that's not what they've actually done. They've used a different tactic altogether.

 

[Body-By-Jake]

That's OK, I'll just standby whistling Dixie.....

....although, reading the remainder of your questions, I cannot fathom why non-residential investors cannot participate ?? What's the diff ??

I only meant that because a commercial/industrial investor like yourself may say that the above poll is unfair because of the cost of a property - ie: 1 commercial property you bought might have been worth $1million & you might have bought 2 of these in the past 2 years; whereas someone else might have only bought 2 x $100,000 units in the past 2 years - so commercial investor has invested 10 times more in property than residential investor.

[/QUOTE]
Are you sure about that ?? The last article I read about the Somers in API (was it May '07 edition), Jan was quoted as saying she hadn't sold any since the mid 70's. They certainly have not used that strategy of buying a whole bunch, and then selling a portion off to eliminate the debt, and then live off the clear rents generated from the mortgage free houses. Undoubtedly that's what she wrote in her books, but that's not what they've actually done. They've used a different tactic altogether.[/QUOTE]

My apologies then. I thought they had sold some. In any case, I'm sure they said they've used a fairly conservative case of buying property & haven't used trusts, etc & other complicated methods; like wraps, etc.

 

[alexlee]

BBJ, how far along are you in your plan?
Alex

 

[Body-By-Jake]

BBJ, how far along are you in your plan?
Alex

I'm between options 2 & 3 - hence 3

 

[evand]

Tactic or strategy? Huge difference.

They've used a different tactic altogether.

 

[lindy0123]

I haven't voted yet as the cost price and purpose of the purchase I think would matter. I could run out tomorrow and buy 10 properties or I could buy one, and the difference between rent received and capital growth over the long haul would make all of the difference. Maybe you should try and factor this into your poll.

I would rather know how many properties someone purchased for the purpose of long term capital growth or cash flow.

I am shopping for an investment property at the minute - one location average price $200k, another location average price $800k. If I buy the $200k house I will by buying purely for cash flow and with more than likely buy at least another 1 maybe 2. If I buy the one for $800k it will be for the capital growth and I would most probably not buy for another 1-2 years.

Just my thoughts anyway. Bye,

 

[letiha]

Well I can't vote either, I've bought 4 this year, and plan to buy 4 more next year.....

 

[bram]

built two townhouses currently building ip will be finished early next year

david

 

[hagel]

I can't reply either. The last 2 purchases were 2007 Bris, 2004 Perth.

 

[asdf]

another location average price $800k. If I buy the $200k house I will by buying purely for cash flow and with more than likely buy at least another 1 maybe 2. If I buy the one for $800k it will be for the capital growth and I would most probably not buy for another 1-2 years.

Just my thoughts anyway. Bye,

Hey Lindy, Where abouts in Syd is the $800k you looking at? Would like to get a house along the beaches or nth shore but the rents still don't cut it. 4% yield at best. You finding this problem? plus competing with emotional home buyers is a real pain the %^&*!

 

[kathryn d]

(Note: The poll above refers to the majority of investors, as most I assume buy or build houses or units - FOR COMMERCIAL/INDUSTRIAL, ETC INVESTORS THIS POLL APPLIES TO YOU AS WELL - P.S. A block of 6 units for example means 6 IPs for this poll)

Since July 2005 we have purchased 25 IP's using your example.
We have 2 -11 unit buildings,2 houses,1 mobile home

 

[crc_error]

how can you keep on buying property each year? how are you going to service so many properties? Most people can only service a couple properties before their cash flow dunks them out.. average negative gearing per qualty capital growth property would be 10k pa.. so i cant see this as been a 'buy a IP each year for 10 years..

 

[kathryn d]

not all IP's have to be negative geared.

 

[crc_error]

not all IP's have to be negative geared.

no, but properties in quality growth suburbs will be. Are we all buying properties in Melton?

 

[kathryn d]

Not being from Australia,I do not know of Melton,but my husband knew because he is most recently from Laverton.Since he made a good profit from from the sale of his PPOR in 2002 in Laverton (68K in the span of 2 years) and combined with my equity in my PPOR we have bought all cash flow properties.

We could have purchased negative geared,but I would rather have a sure profit than hope in a few years of CG.
I think both ways of buying property are fine.
We plan on retiring from our choices in about 2 1/2 years.
Not bad considering I work as a laborer at a factory making 28K a year,and we will make about 190K in rent next year.

I suggest you don't be so narrow thinking in your investing crc_error

 

[AlmostBob]

no, but properties in quality growth suburbs will be. Are we all buying properties in Melton?

Thats an error, crc. (sorry)
A property in melton with cf+ & cg is a better investment than a property elsewhere that is only cf or only cg. You might not want to live in the less affluent 'burbs but that isnt important, we invest, they rent. IP not PPOR

1.buy cheap
2.update improve much can be done with little
3.rent high
4.revalue
5.take out equity
6.goto 1

last purchase 200K, 133K reno revalue 650K - CG,450K
and paying rent of 550-700 per unit they are cf+
that means that next year we can do it again. (the building season is only in the summer, when the snow melts)(fingers crossed)

 

[AlmostBob]

Are We Ganging Up?

 

[MichaelW]

Can't respond...

I've bought 1 in the last year, so that's 1 in 2 years which you don't have the option for.

Mind you it cost $700K odd, so is probably worth double what you're picking yours up for anyway... And I'm about to spend another $1M on it developing it into a MUH development. But still can't answer your poll. I wonder where a total spend of $1.8M in two years would compare to others rating highly here though. Goes to show that its not always a question of how many IPs, more of how much invested in IPs that counts...

Cheers,
Michael

 

[alexlee]

how can you keep on buying property each year? how are you going to service so many properties? Most people can only service a couple properties before their cash flow dunks them out.. average negative gearing per qualty capital growth property would be 10k pa.. so i cant see this as been a 'buy a IP each year for 10 years..

Rents increase. So does your salary. The negative cashflow decreases as time goes along.
Alex