IP portfolio that performs regardless of market movements!

1. The real estate market is changing driven by demographics. Traditionally high growth suburbs like Inner West will now have longer growth due to affordability. The growth will be in the cheaper suburbs under 500k
Exactly right. I think so too so all my past 12 IPs have been bought under $500k and I still follow that strategy.... (only my PPOR is expensive)
2. I personally think we won't get the 10-12% growth over the next 10 years. I am working on growth of 5-7%.
I do not know...so time will tell.
Also depends wether 'yuan' will become exchangable and China's private investments reach Oz in greater scale... If history repeats itself we may be at a stage when Japan's investments were flowing (after 1987 then 1988 resulted in one of the biggest real estate booms), so maybe 2012 next year from China. Did you know a new China's big bank ICBC planning plans to roll out retail facilities in Oz in 2012 (they are bigger than all four banks put together!).
MIW
 
Yes...I heard that some of the Chinese Banks will be lending here....but I suspect it will be for the big deals. I don' think they will target the average mom and pop.;)

Don't know when though?

Exactly right. I think so too so all my past 12 IPs have been bought under $500k and I still follow that strategy.... (only my PPOR is expensive)

I do not know...so time will tell.
Also depends wether 'yuan' will become exchangable and China's private investments reach Oz in greater scale... If history repeats itself we may be at a stage when Japan's investments were flowing (after 1987 then 1988 resulted in one of the biggest real estate booms), so maybe 2012 next year from China. Did you know a new China's big bank ICBC planning plans to roll out retail facilities in Oz in 2012 (they are bigger than all four banks put together!).
MIW
 
Yes...I heard that some of the Chinese Banks will be lending here....but I suspect it will be for the big deals. I don' think they will target the average mom and pop.;)

Don't know when though?
If I have read the information the new bank will (if their licence is approved) target the Asian communities and those that do business in China. In NSW there preferred initial branches are Parramatta, Eastwood and Chatswood. No suprises there.

They intend to trade as a direct competitor to the Big 4.
 
Hi MIW

Very solid portfolio. You definitely don't need my advice....you are doing fine on your own.


Cheers
Sash
You both are. Please be aware that it really helps to know someone has gone before and turned some savings, sacrifice, some sweat and time into 5/10 + million. It feels so much more achievable. I have posted this before but with the day job being so far removed from wealth creation i need to be reminded that people are doing this.
 
Yup that was where I was 5 years ago....so I know what you mean!

Slogging by backside to make some 400 partners rich!!



I have posted this before but with the day job being so far removed from wealth creation i need to be reminded that people are doing this.
 
Sash & MIW, thanks to both of you for being so honest and putting your cards on the table. It's really inspiring and helpful to us beginners.
 
Sash & MIW, thanks to both of you for being so honest and putting your cards on the table. It's really inspiring and helpful to us beginners.
I agree, its great that people are willing to share and assist others

It's inspirational to read such threads

sash said:
My portfolio has grow from about $1m to about $5m in about 6 years based on this strategy.
sash said:
1. My existing portfolio is geared at an LVR of 37% (would like this to be
34%) this is despite me acquiring 3 properties this year for about 800k

2. The overall portfolio is returning 5.1%

3. The CF+ position once fully let (have 2 vacant due to reno) is around 3k
per month

4. Equity has grown 420% over 6 years
And MIW's inspiring additions

MIW said:
My strategy was different but gained equity of $2.3M over ten years (started in Year 2000 and last property added in 2008 - so 8 years or so)

I am about your age, hold about $8M portfolio, all 13 houses, with 27% LVR, under 3 entities (Joint names with hubby, Trust, Super), pay combined $3K in land tax, and have only 3.5% yield.
MIW said:
I have $6m equity, but $3.7m was made in various ways:

- Sold first PPOR made equity (had 14 houses previously)

- Major renovation for new PPOR so added equity there

- Bought/sold land made equity

- Bought shares under various entities and sold most at 30 times profit made heaps there.... and paid lots of tax there....

- Bought various businesses and sold them made equity there

Invested money made into property via 50% deposits on 2 IPs, then 20% on the next 7 IPs.

PPOR house and 3 Super houses all paid off.

So only 9 properties (7 in Joint Names, 2 in Trust) have loans.

In addition, have all that other extra investments in Super as mentioned before.
I'd love to know more about super also as our super is languishing and a stragetgy is in need for that structure

MIW said:
I have $1M sitting in cash in Superfund, generating $70K gross rental (from 3 properties), contributions $50K each year ($25K each max. allowed), $170K gold/silver investment, small share portfolio at the moment, IPO $120K, IPO land development $50K.
I have total control over my Super and since I programmed all those fees into Managed Funds while working for an insurance company many years ago, I refused to hand it over to someone else.

While most people are in worse Super situation now, and perhaps since 1987, I have realised 2000% profit.... So my point being, that I like total control of it so I will not invest into Managed Funds.
The other great threads read recently, have been Nathan's posts and updates

The BRW video had Nathan with a portfolio of $ 7.5 to 8 million dollars with 40 investment properties spread across New South Wales and Queensland.

An update here would be great, but at last read it was less than a 50% LVR with an average yeild of 14% for Nathan also

Thanks to all three above, very motivational
 
What strategy works best for you?

I agree, its great that people are willing to share and assist others
It's inspirational to read such threads
And MIW's inspiring additions
I'd love to know more about super also as our super is languishing and a stragetgy is in need for that structure
The other great threads read recently, have been Nathan's posts and updates
The BRW video had Nathan with a portfolio of $ 7.5 to 8 million dollars with 40investment properties spread across New South Wales and Queensland.
An update here would be great, but at last read it was less than a 50% LVR with an average yeild of 14% for Nathan also
Thanks to all three above, very motivational
Wasp,
I like other inspirational stories (but not with attitudes!) so I always buy monthly magazines such as 'Australian Property Investor' and 'Your Investment Property'.
There are also many stories of private investment clubs that may publish their own magazines.
My motivators are my mentors, like minded people that invest, interesting subscriptions that I subscribe to, and various seminars I attend, to keep in touch to learn, learn and learn.
As I said previously, set an emotional goal, act on it, and keep repeating it over and over and time will do the rest...(The process is simple, but not easy, like anything in life).
As to your Super, well the sooner you start the better, but you need to learn, learn, learn.
Let's hope we'll hear your story down the track....Best of Luck.
By the way, all three of us had different strategies so be aware of it (you can have $8m portfolio with 13 properties or 40 or so as you mentioned above and different LVRs and using or not using negative gearing, and investing or not investing regional, and so on and on and on? The question is what strategy works best for you?).
 
wow theres hope for me to be a millionaire yet!!
since im just new to the game (first home owner for about a yr now) and previously bought a block of land about a yr before that
between the two i have a total loan balance of 128000k owing (with about 30k in the offset account covering my block loan) and the purchase value of 250000k = a LVR of %51 (conservative)
i think my block of land is used as security for the house so is this cross collateral? is this a bad thing?
how do you calculate the yield? i have noticed there may be 2 different ways?
and when purchasing how do you know your going to get the yield of 7%?
my current house was purchased for about 50k less (deceased estate) than 2 current similar properties within a few 100m the only thing is the kitchen and bathroom were renoed on the other 2 houses and had small pergola areas
mine has the benefit of a double stone garage built into the house where the otheres didnt
how low should i get my LVR before purchasing my second property?
im looking at purchasing a newer bigger property for my PPOR and renting this one out with an estimated $200-220 in rent (comparable to next door that is getting 215 with single car garage and big deck tho) when the bathroom has been redone (looking at about 4k to reno bathroom (its small)
after reading this thread my plan is to acquire properties that are CF+ and looking for yield
with sights slightly more focused on CG further down the track
 
i think my block of land is used as security for the house so is this cross collateral? is this a bad thing?

Yes it is cross collateralisation but that's not always a bad thing. Depends on whether it helps you afford something you normally couldn't. However I do try to avoid it if you can.

how do you calculate the yield? i have noticed there may be 2 different ways?

There's gross yield and net yield. Gross yield = rental per year / value of property. Net yield = rental per year minus property costs / value of property. Obviously net yield is lower than gross yield as it is the one that goes into your pocket after costs.

and when purchasing how do you know your going to get the yield of 7%?

You should always base your yields etc on current value rather than purchase value because the market is now - not 10 years ago.

how low should i get my LVR before purchasing my second property?

That depends on your situation...there's no right or wrong answer.

after reading this thread my plan is to acquire properties that are CF+ and looking for yield with sights slightly more focused on CG further down the track

Good luck with that. But don't always think that properties with low prices (note low prices, not 'cheap') have better yields. I bought a property in the inner-city suburb next to Melbourne for a 10% yield...you just have to be a bit more creative.
 

Yes it is cross collateralisation but that's not always a bad thing. Depends on whether it helps you afford something you normally couldn't. However I do try to avoid it if you can.


what implications do i have if i go to sell it?

how low should i get my LVR before purchasing my second property?

That depends on your situation...there's no right or wrong answer.


i know its personal choice but any rules like dont purchase if above 80% or so?
is 51% a good level?

after reading this thread my plan is to acquire properties that are CF+ and looking for yield with sights slightly more focused on CG further down the track

Good luck with that. But don't always think that properties with low prices (note low prices, not 'cheap') have better yields. I bought a property in the inner-city suburb next to Melbourne for a 10% yield...you just have to be a bit more creative.


my first few house will be lower prices as thats all i can/will be able to afford
obviously i will be looking for CG but require CF+ to be able to afford them once i have some assets my strategy will change
 
There's gross yield and net yield. Gross yield = rental per year / value of property. Net yield = rental per year minus property costs / value of property. Obviously net yield is lower than gross yield as it is the one that goes into your pocket after costs.

so if i bought a house for 189k
got $220 a week in rent (maybe possible to get 230 or even more but looking at conservative figures)
had it on an interest only loan my interest cost would be... $254
my yield would be...? 0.05% ? = not a very good deal? or do you times by 100? thus giving it a 5% yield? still not great but ok?

for net yield i would have to factor in stamp duty and other buying associated costs, PM, rates, water, and maintenance, anything else??
 
Hi BMan

Weekly rent x 52 divided by purchase price x 100.

i.e. $230 x 52 divided by $189 000 x 100 = 6.32%

You could hopefully throw in a good sprinkle of depreciation also ;)
 
ah ok cool cool that makes it better than the .05% haha :)
one day ill know what im doing
what i dont get is doing that im getting a yield of 6.32% but costing me more in repayments so im at a negative cash flow
after depreciation and deductions etc could it turn into CF+ ?

also does anyone know much about the NRAS?? on how to claim etc?
http://www.environment.gov.au/housing/nras/about.html
 
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ah ok cool cool that makes it better than the .05% haha :)
one day ill know what im doing
what i dont get is doing that im getting a yield of 6.32% but costing me more in repayments so im at a negative cash flow
after depreciation and deductions etc could it turn into CF+ ?

also does anyone know much about the NRAS?? on how to claim etc?
http://www.environment.gov.au/housing/nras/about.html
RE: NRAS do this:
- Open google.
- Type NRAS site:somersoft.com
- Enjoy! :D
 
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