Hi guys, I think I'm buying too many -ve geared properties and I'm starting to question my strategy that I developed a few years ago. My strategy was to buy properties that were likely to attain good capital growth as opposed to good yields. The other perequesite was buy property that I could sub divide and then build(or sell) later(10+ years time) All of my 3 IP's when purchased all had a yield between 3.5-3.8%. This hasn't worried me too much, as I earn good money, have paid off my PPOR, have a low LVR and my wife also works and earns a respectable income. Also means I get a nice tax return come tax time from negative gearing.
However, I keep reading of people buying in at 4.5 - 5% yields and I'm starting to underestimate my ability to find good buys as an "investor". Do these properties in the 4.5 - 5% yield category have potential for subdivision, well located, close to cities(15km radius), getting good tenants, etc? My IP's are in Melbourne and 2 of them have had excellent capital increases over the last few years, so this part of my strategy is working(3rd IP was only recently purchased). But, having said that, you could probably say that for all property in Melbourne last few years in regards to capital gains.
Maybe it's time I diversified the portfolio with a unit or property that gets good yield to boost cash flow as opposed to looking at the future for subdivision, land content, etc.
Any thoughts anyone? Ready to purchase IP#4, but feel like I'm losing track a little and a bit disillusioned...
Thanks.
However, I keep reading of people buying in at 4.5 - 5% yields and I'm starting to underestimate my ability to find good buys as an "investor". Do these properties in the 4.5 - 5% yield category have potential for subdivision, well located, close to cities(15km radius), getting good tenants, etc? My IP's are in Melbourne and 2 of them have had excellent capital increases over the last few years, so this part of my strategy is working(3rd IP was only recently purchased). But, having said that, you could probably say that for all property in Melbourne last few years in regards to capital gains.
Maybe it's time I diversified the portfolio with a unit or property that gets good yield to boost cash flow as opposed to looking at the future for subdivision, land content, etc.
Any thoughts anyone? Ready to purchase IP#4, but feel like I'm losing track a little and a bit disillusioned...
Thanks.