For goal setting/planning to be effective it needs to be written down in detail, time frame/s attached, and regularly reviewed to track progress. High achievers carry this out to the nth degree which probably explains why they are in the minority.
My Tips for Acquiring Short to Mid Term Capital Growth
- Thread starter Rixter
- Start date
For goal setting/planning to be effective it needs to be written down in detail, time frame/s attached, and regularly reviewed to track progress. High achievers carry this out to the nth degree which probably explains why they are in the minority.
Good to Have as detailed plan as possible. Especially IP is not easy to liquidate compare to other investment vehicles. Better to know what you are/will be doing before you do anything. Some people like planning too much and do not act. Some want to act without planning.
Buy for yield with neutral or positive cash flow, and some prospects for capital growth (easier said than done LOL) which means getting a place that a reno can increase the yield and add immediate value to mitigate any fall in market. Then in 12 months decide whether to a quick flick (to reduce bad debt) otherwise hold and draw out equity to get another.
Just got the first one, but now finding that the next right property is hard to find because stupid buyers keep over-paying. Looking at a granny flat posibility.
Bump...from the vault
Vaughan, are you looking to create financial independence by replacing your payg income from it and if so how?
3/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.
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I found a suburb that fulfill all your criteria, but should we buy the house ( 30 years old approx ) or buy the new townhouse from other investors ?
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I found a suburb that fulfill all your criteria, but should we buy the house ( 30 years old approx ) or buy the new townhouse from other investors ?
I found a suburb that fulfill all your criteria, but should we buy the house ( 30 years old approx ) or buy the new townhouse from other investors ?
Vivian,
Property investing is not about property rather about your strategy and the way you intend to use the property to get to where you are wanting to go. No good buying a small shopping car if you intend driving interstate on a family holiday.
Unfortunately the mistake I see newbies and sometimes not so newbies is that they are property focused instead of strategy focused which is like putting the cart before the horse.
What strategy/s are best for you is determined by where you are wanting to go, the time frame you want to get there in and how hands on along the way you want to be ( manual/automatic etc) - all based around your personal risk profile.
I hope this provides some food for thought.
What is your chosen investment strategy?
3/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.
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I found a suburb that fulfill all your criteria, but should we buy the house ( 30 years old approx ) or buy the new townhouse from other investors ?
^^ what Rix said. It depends...what do you hope to achieve from the investment?
I would like to add the strategy I used in Sydney over the last few years to the thread if it is ok with Rixter.
1: Print off large map of Sydney.
2: affix to a wall in a sizable room.
3: Stand 6 feet from the map and throw 3 darts.
4: Inspect where the darts have landed and buy in those areas.
Note: Throw more than 3 darts if you have enough equity available.
1: Print off large map of Sydney.
2: affix to a wall in a sizable room.
3: Stand 6 feet from the map and throw 3 darts.
4: Inspect where the darts have landed and buy in those areas.
Note: Throw more than 3 darts if you have enough equity available.
Great post Rixter!
So how do you research all these things? The council one is fairly straightforward but is there a way to get broader view of commercial development?
For example i tried looking at the McDonalds, Target, Harvey Norman websites and there is no mention of where they are opening new stores.
It would be great to get a broad view of suburbs and what kind of commerical developing is going on.
So how do you research all these things? The council one is fairly straightforward but is there a way to get broader view of commercial development?
For example i tried looking at the McDonalds, Target, Harvey Norman websites and there is no mention of where they are opening new stores.
It would be great to get a broad view of suburbs and what kind of commerical developing is going on.
Apart from all the various big multi-national company websites, local newspapers, community news, local businesses, and people in the area.....general networking etc, Google is your friend too.
Use that to look for all the metropolitan urban redevelopment authorities that have been formed.
Use that to look for all the metropolitan urban redevelopment authorities that have been formed.
At first, My strategy is buy and hold, buying 3 bedr house at min 5% CG and 5% Rental yield, add up value with reno or chance of subdividing later on.
but the suburb that i look at it now, have no houses for sale at my preferred street, lots of old houses been demolished and subdivided into townhouses.
I am just a newbie, so i don't know whether i should stick into my strategy or switch it. The townhouse itself under 5 years old still under builder warranty and been rented. Should i use a buyers agent to research the property for me ?
Last time inspection, i almost got into sales agent trap. He is trying to lure me to put an offer straight away without doing due dilligent or talking to my solicitor. luckily i refused and it turn out the property was heavily overvalued.
I would like to earn passive income for at least 50k pa within 15 years, my target is buying cash flow positive in a good growth suburb and have at least 8 IP by that time. It is that simple but as a newbie i am scared i bought wrong property in wrong location at overvalued price.
Your advice would be highly appreciated.
I have been in research since 6 months ago and the more i read the more i research the more gray hair i had.
Preferred street, how big is this street. Sounds like you might be putting too much emotional attachment into the decision. You have done some good DD by the sounds to find an area thats seeing a reasonable amount of infill. What's happening in the streets nearby, are they cheaper, is there still the rental demand, potential to develop in the future?
Given the amount and timeframe this is very achievable but "buying cash flow positive in a good growth suburb" well that is what dreams are made of but reality is it basically does not exist unless you manufacture it, investors usually choose a certain strategy.
You purchase for cashflow which may be rural areas where house prices are very low but yield is good. You will get cashflow but little growth. If you purchase for growth then you would be negatively geared and have to come up with the shortfall each week.
Now you can get both but it requires you manufacturing. For example you buy a splitter block with a house at the front. You get the block subdivided, sell of the rear and the profit you make gets invested back into the front property bringing the loan amount down and increasing the yield
Also I have said this in numerous other posts but the numbers of IP's in a goal to me is irrelevant. The goal you have set is 50k passive income and in 15 years so the number of IP's should not matter.
The only consideration is diversifying your portfolio so all your eggs are not in the one basket but you can achieves this with 4 properties really.
For example basic maths and a lot left out but 50k/8 IP's equals 6.25k passive income per property.
OR
50k/4 IP's equals 12.5k passive income per property.
The end result is the same, 50k passve income, you have just done it with less properties, and in my opinion less stress and less ongoing stress managing 4 tenants as opposed to 8
Whilst I agree with a lot of what you're saying it's not always the case.
I bought a rural property 2 years ago, yield was 6.7% on purchase price. It's gone up in value $42k (as per desktop valuation suitable for mortgage purposes). Rent has also increased by $10p/w during that time.
Depending on where you're buying, I do agree and like properties to have chance to value add through renovation or development. I see these types of properties having the best growth potential.
So you see that is exactly Rixter's point. What is one's strategy from the start?
Yours is to add value or to develop with land in mind, others might like closer proximities and smaller projects, others are just passive investors, and others just wish to buy units, or townhouses, or only houses old or new estates...
Basically the possibilities are endless, it takes few years to play the game and to decide what is right for you and what works for you, right? But most important is to start and give it a go and to learn from that.
BUT, the goal needs to be written down, I agree 100%, and for us it was not the number of IPs and when we will buy but rather what the monetary end result we wished to achieve. The market forces dictated the number of IPs we bought, the time it took to achieve and the equity built!
Our goal in year 2000 was to achieve $50K income each and once received we modified the goals....
I believe starting is crucial, but perseverance in times of adversity, learning from mistakes and continuing to view the large picture, rather than all those small stumbling details along the way, have helped the way!
Remember Warren Buffett sayings, "Someone is sitting in the shade today because someone planted a tree", or "Price is what you pay. Value is what you get.", or "Wealth is the transfer of money from the impatient to the patient", and it is the last quote that I find the newbies don't understand the most!
Keep it up Rixter, keep passing the most important values, whether the mindset or the strategies of the game, so others open to information may reap the rewards too!
Median price house on the street is higher than median price for the suburbs. the street had very strong demand with the benefit walking distance to train station, 2 schools, and shopping mall. Its not on busy street, instead quiet safe and leafy street. Most of the old houses on the street sitting on a big block of land, was purchased and subdivided into townhouses. I can see more stock on the market was offer under subdivided permit to investors and lots of subdividing going on on the area.
I went around and check with local property managers which street most appeal for the investors and she gave me the name, and i checked it, but the problem is the property in this street was held tightly, the only property available in the market was 2 bedroom townhouse with garage being built over easement.
maybe i should switch the suburb or just use BA for my first ip.
I lose my confidence after all of it.
