I love my broker.

[want2bewealthy]

Well I spoke with my broker today and he managed to talk me out of an inner city studio apartment as he explained the body corp in large units [over 100 in the complex] can be a pain and there is usually not a great deal of growth in studios, also the lender has trouble with mortgage insurance on high rises,
overall he was very knowledgable on all aspects and knows my area well,

He talked me into a beachside one bedroom unit
[theres a difference between talked, and pushed, I was not pushed]
he says it will easily double in price over a 7-10yr period because of the location [nowhere else to build within the area]
The only problem is.. Im having trouble grasping that an aging unit will double in price at all.. call me neive but it just seems a little difficult.. anyone got some calm words of advice to push me off the edge?

 

[Merovingian]

I would feel uneasy in investing in a complex with 100 apartments in it. Not enough freedom in the investment I believe. Might as well buy shares.

 

[toony]

what is the bayside surburb? It will be easier for us to comment. If its like St kilda, Port Melb or Elwood or any bayside surburb for that matter, it will double easily in 7-10 yrs.

Also if its an old unit, its already been depreciated, so you got in at a good time. I prefer to buy an old unit than a brand new one and pay for the developers profit and depreciation.

 

[want2bewealthy]

what is the bayside surburb? It will be easier for us to comment. If its like St kilda, Port Melb or Elwood or any bayside surburb for that matter, it will double easily in 7-10 yrs.

Also if its an old unit, its already been depreciated, so you got in at a good time. I prefer to buy an old unit than a brand new one and pay for the developers profit and depreciation.

Cool, I didnt think about the depreciation running out and not having to pay for it,
The suburb is called "Nightcliff" in the Northern Territory.

 

[Mark C]

W2bw,

This broker of yours sounds like a real find, he sorts out mortgages and also gives fee investment advise.

Mark

 

[Sunfish]

Interesting, W2BW is thankful that a broker gave him some sound advice and earlier this week a young lady was hissed that hers (was it "Ed") did the same.

Just proves the old adage........

 

[Pushka]

Cool, I didnt think about the depreciation running out and not having to pay for it,
The suburb is called "Nightcliff" in the Northern Territory.

But claiming for depreciation within the first couple of years of being built gives you excellent taxation advantages! Is he qualified to give investment advice?

 

[Mark C]

Interesting, W2BW is thankful that a broker gave him some sound advice and earlier this week a young lady was hissed that hers (was it "Ed") did the same.

Just proves the old adage........

Sorry, I was trying to sound sarcastic. Reminds me of a time when my bank mangaer told me Not to buy any more houses in Perth in 2004.

 

[Sunfish]

Sorry, I was trying to sound sarcastic.

I know that. I was also wondering about the "licensed advisor" bit myself.

 

[alexlee]

overall he was very knowledgable on all aspects and knows my area well,

He talked me into a beachside one bedroom unit
[theres a difference between talked, and pushed, I was not pushed]
he says it will easily double in price over a 7-10yr period because of the location [nowhere else to build within the area]
The only problem is.. Im having trouble grasping that an aging unit will double in price at all.. call me neive but it just seems a little difficult.. anyone got some calm words of advice to push me off the edge?

Can older units double in a 7-10 year timeframe? Yes. How? Same reason why other properties go up. Area becomes more desirable. People want to live there and new developments are too expensive so they are happy to buy something older to live in the area. Note the older one will be cheaper, but only relatively. e.g. I bought a unit on the GC for $165k in 2003. Recently one in the same building sold for $270k (probably a little better than mine, though). Why? Partly because the whole market goes up, partly because they have been building new apartment blocks around mine where a similar 1 bedroom goes for $300k+.

If the cashflow is ok and you can keep holding it......
Alex

 

[Shuttergirl]

Interesting, W2BW is thankful that a broker gave him some sound advice and earlier this week a young lady was hissed that hers (was it "Ed") did the same.

Just proves the old adage........

Sunfish, I think I might be the "young" lady you are referring to. I think my situation and W2BW's is completely different actually.

And no, I went to Ed and Nardia after seeing the first guy and they were totally wonderful and on board with my plans.

 

[Mr. Fabulous]

I'm having trouble grasping that an aging unit will double in price at all.. call me neive but it just seems a little difficult..

Hi W2BW,

Here is a real life example that I know of personally.

Unit bought January 2007 (block is about 30+ years old)
Unit valued July 2007 - 13.5% return in seven months
Based on info from re sales sites for comparable units in the area, unit *could* get conservatively 19.5% return after seven months based on original buy price and current sales values
A reasonable price would achieve around 22% return after 7 months on original buy price and current sales values

Still having trouble? I can tell you that the owner of this unit is a very happy person.

Mark