How many Properties in your Portfolio?

either way I believe apartments dont do as well. you look at a typical suburb which has 'flats' http://www.domain.com.au/public/suburbprofile.aspx?mode=research&suburb=St Kilda&postcode=3182 you can clearly houses did better than 'units' in the area.

however when you look at a suburb where 'units' are typically houses on a chopped block, you can see better performance http://www.domain.com.au/public/suburbprofile.aspx?mode=research&searchterm=bentleigh

I'm not saying its always the case, but from what I have seen in the areas I follow, its been the case.
 
Don't want to interrupt you guys :)

Thanks for all the help and the support guys, it does help with trying to tackle such a learning curve.

A lot of you have suggested reading up on property investing, are there any particularly works which you have found to be helpful? Are there any seminal pieces in this field which would be necessary to read?
 
A lot of you have suggested reading up on property investing, are there any particularly works which you have found to be helpful? Are there any seminal pieces in this field which would be necessary to read?

There have been a few threads on this topic. Maybe do a search.
My top picks would be:

Broke to millionaire ... Peter Spann
Wealth for Life Ed Chan
Thriving, not just Surviving .. Michael Yardney
Anything by Jan Somers, Margaret Lomas, Helen Collier-Kogtevs

Enjoy the journey!
 
I would have thought location would be more important than house vs. apartment/unit? Sure, maybe houses go up more when you're comparing houses in the same suburb vs. apartments/units of the same suburb, but sometimes one is limited by $$ as you could be talking about $1M+ houses where you can get apartments for $400K, and so prefer to buy apartments in quality (predicted high growth) suburbs rather than houses in less quality (predicted lower growth) suburbs. I'll be facing this dilemma next year, whether to buy a unit where I think has potential for good capital growth as I've been priced out of the houses, or should I buy a house somewhere further out.

You generally expect a higher yield from units, so in theory CF should be a little better.
In >20yrs of investing in different types of property types in the same area, I don't buy the whole "quality real estate" line.
In boom times everything went up, but not all types at the same time.
Published "Predicted growth" was useless just as published median price values were way out most times.
 
I would have thought location would be more important than house vs. apartment/unit? Sure, maybe houses go up more when you're comparing houses in the same suburb vs. apartments/units of the same suburb, but sometimes one is limited by $$ as you could be talking about $1M+ houses where you can get apartments for $400K, and so prefer to buy apartments in quality (predicted high growth) suburbs rather than houses in less quality (predicted lower growth) suburbs. I'll be facing this dilemma next year, whether to buy a unit where I think has potential for good capital growth as I've been priced out of the houses, or should I buy a house somewhere further out.

I agree Biggles that location is more important, i would much rather a unit in St Kilda-Elwood than a house in a new outer suburb of melbourne or any city really. A unit in St Kilda has "higher land conent" than a house in **** (people get a bit sensitive so insert suburb at own peril).
 
You generally expect a higher yield from units, so in theory CF should be a little better.
In >20yrs of investing in different types of property types in the same area, I don't buy the whole "quality real estate" line.
In boom times everything went up, but not all types at the same time.
Published "Predicted growth" was useless just as published median price values were way out most times.

yes you do, but you also pay body corp. I also found units had a higher turn over of people. ie every 6-12 months someone moved, whereas my current house has one tenant 2 years now with re-newal just been accepted. the other house I had was the same.. but the flats, it was like playing musical chairs!

anyway each to their own, but from personal experience I'll continue to pay more and buy houses in affordable areas. next step would be buying town house, or 'units' on chopped block - free standing, not apartment.
 
anyway each to their own, but from personal experience I'll continue to pay more and buy houses in affordable areas. next step would be buying town house, or 'units' on chopped block - free standing, not apartment.

For investment purposes, yield is important to me, so I agree, apartments aren't really what I'm looking at either. I was just pointing out that I don't think you can simply say capital gain is better on houses vs. apartments because they have more land, as you really need to compare properties based on the same price range (as that's what your investment decision is based on) rather than same suburb, whether that's an apartment in Elwood or a house in Cranbourne as most people wouldn't be looking at buying either a $400K apartment or a $1.2M house in Elwood for example. They'd simply say they have $400K for example, where should I spend it?

My PPOR is an inner city apartment and my IP is an outer suburban house, and they have both had similar capital gain over the last 12 months. The fact my apartment has "no land" hasn't meant anything. So maybe I've answered my own question, I think I will go with a free standing unit in the suburb I want to buy in despite being priced out of houses. :)
 
CJProperty,

Here's an interesting post from Dazz in the forum re: number of properties.

We were at a property seminar once, where the presenter up the front did the usual thing and asked everyone to hold their hand up if they owned investment property, and to keep their hand up as he counted up from one.

The well spoken nice elderly lady next to me put her hand down when he went past three.

There seemed to be a dramatic drop off when he reached four and five.

We eventually put our hand down, and yet there were people who were obviously going to have to leave their hand up for a while, by the way they were shuffling in their seat and bracing their arm with their other hand. He eventually called something like 40 or 42, and the second last hand went down.

The presenter yelled out "We have a winner !!" All of the crowd were mightily impressed with this one burly gentleman still with his arm up....."Can I ask you sir, how many properties do you own." The answer came back as 55. A large round of applause and a few OOH and AAHH's were muffled throughout the audience.

He was asked by the presenter to quickly describe his obviously weighty portfolio for the edification of the crowd, a real stand out performer.....it turned out he owned one group of dishevelled bed-sits with wino's and drunks and deadbeats as tenants, with the 55 'properties' being worth a grand total of about 2m, and his LVR was through the roof.

I quietly rolled my eyes in complete non-amazement.

The night did get better though, as the wife and I got on crackingly with the elderly lady sitting next to us. Turns out, the widow was left by her husband with not only the matrimonial home, but two large unencumbered office blocks in the middle of the Brisbane CBD, worth over 15m, generating clear nett rents of nearly 2m p.a.

This mild, quietly spoken lady had rents bigger than the hero of the day's entire asset base (including his large loans) standing up there making a turkey of himself.

Forevermore, we realised the folly of trying to financially measure someone by the number of 'properties' they supposedly own. It sounds mightily impressive though to say a big number, even if they are all dumps out in woop woop with horror non-paying low gross rent type tenants.

We got far more out of speaking to this lovely old lady than the main presentation itself.

There are also some great posts in the forum well worth looking at i.e. Top Threads

As far as books go I recommend

Anything by Noel WHITTAKER
Jan SOMMERS books
The Richest Man in Babylon- available on the net incl here
Ordinary Millionaires - Jim McKNIGHT

as a start ;)
 
rather than same suburb, whether that's an apartment in Elwood or a house in Cranbourne as most people wouldn't be looking at buying either a $400K apartment or a $1.2M house in Elwood for example. They'd simply say they have $400K for example, where should I spend it?

true, but I prefer to buy house in say Ferntree Gully (where I did buy) or surrounding suburbs for similar price.

I did own apartments in south yarra and st kilda at one stage, and they didn't do very well.

I don't think you should buy $1m house either.
 
I'd definitely be questioning your assumption of houses outperforming units CRC. Even taking your St Kilda example, just because the past figures have shown those returns - doesn't mean units/apartments won't catch up again at some point.

If you were to assume the same growth rates for the next 10 years in St Kilda- houses would be almost double the prices of units in the area. Right now houses are around 70% more than units - is there a reason you think the gap will become wider and wider over time (which it has to if houses continue to outperform units)? Flash forward 20 yrs, you think houses will be $3.6M yet units will only be $1.5M? The gap would be 140% compared to the current 70%.

Don't get me wrong, I prefer houses over units as well - but I don't assume the growth in units will necessarily be any less. In fact some may take the alternate view and say houses have been running away a bit and units are due for a catch up, therefore achieving a better return over the next 10yrs.
 
2.999 properties - waiting for land #3 to get processed and in the throes of getting house #3 built on it - a fairly generic 4x2 on 650sqm.

I should note that I'd really prefer to have only one PPoR and no IPs but things have conspired against me and at the end of this year I'm stuck with two IPs at around 20% LVR (obviously very CF+) and one PPoR at around 50% LVR. I'm the quintessential "accidental landlord". I hear other people actually plan to have multiple properties, I just end up with them :confused:

I have IP #1 for sale (again) and if it actually sells (a miracle) there's 3 blocks of land just down the road I'd love to buy. Since we inadvertantly bought the last house in a sleep deprivation haze post baby and I'm pregnant now, there's good odds it'll happen again ...
 
Here's an interesting post from Dazz in the forum re: number of properties.

Thanks for digging that up, redwing, it was a great read.

We have 2 IPs and a PPOR, but I agree with the general sentiment of the thread, it's not about how many IPs you have. Every 1 - 2 years, our property investing (PI) plan is to buy about $500k of property. This might be 1 property, 2 or 3.... whatever...... the number doesn't concern us.

For books, I really recommend Jan Somers for the newbie. I read these when I first got into PI. Jan Somers books have heaps of figures if you are an analytic type like me who wants to get your head around the figures. If you are cheap like me you can usually borrow them from a good library :D
 
I'd definitely be questioning your assumption of houses outperforming units CRC. Even taking your St Kilda example, just because the past figures have shown those returns - doesn't mean units/apartments won't catch up again at some point.

If you were to assume the same growth rates for the next 10 years in St Kilda- houses would be almost double the prices of units in the area. Right now houses are around 70% more than units - is there a reason you think the gap will become wider and wider over time (which it has to if houses continue to outperform units)? Flash forward 20 yrs, you think houses will be $3.6M yet units will only be $1.5M? The gap would be 140% compared to the current 70%.

I dont assume anything, I go by fact. The fact is over the long term, houses generally grow more than units. 'Assuming' units will catch up is a guess.

Plus if I have a house, there is always potential to knock it down, and build units.

But as with anything, there are areas where units will do better, and houses will do worse, and visa versa.
 
CJP,

Can I suggest a book called "I buy houses" by Paul Do. It's a really good read for someone in your position. Basically, it is a good guide on what to buy, where to buy and when to buy. It has great statistics in it too, to help with some basic forecasting.

No advertising or association or responsibility of course, just a good book I found useful for me.

Cheers,
 
Interesting reading the units vs houses debate. I think a few more points may be worth throwing in at this point. From my observations, over a long period, the increase in median for houses, was around 1% higher than units. However, I felt that there was a chance, that the maintainence on a house would substantially erode that difference, add to that, the posibility of a slightly higher yield. The entry price is also substantially lower, so the start time and or rise, is quicker easier. I only own one unit IP, however got 3 daughters started with units when they would not have been able to start with a house. Why not use Jan's program, and actually compare the IIR, and see how it looks.
 
I dont assume anything, I go by fact. The fact is over the long term, houses generally grow more than units. 'Assuming' units will catch up is a guess.

Plus if I have a house, there is always potential to knock it down, and build units.

But as with anything, there are areas where units will do better, and houses will do worse, and visa versa.

But that's just it - is that a 'fact'? Based on my extrapolations above, I don't (personally) believe assuming units will catch up is that much of a guess - unless of course you think in 50yrs houses in a suburb will be $50M and units $10M (exaggerated example I concede and obviously by no means a 'fact' either - just an educated guess).

The 'facts' of your St Kilda example could be turned on there head quite easily by one year of superior growth in units. eg. in 2011 house prices go up 5%, but unit prices jump 20% - which will drag the units 10yr return % higher than the houses - which will be the new 'fact.'

Anyway, not trying to convince you units are better, I prefer houses with land for development potential as well (so obviously more interested in land value than dwelling), just don't agree that houses perform better than units necessarily.
 
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