Our most expensive property purchase to date

[mystery]

I was sitting around at home the other day thinking of all the properties that I and my wife and I have bought, sold, renovated, developed and held over 32 years since buying my first block of land at - 24 The Loop, Edgewater (WA) around 1978/9. I wish we still owned every one of them ...

In thirty odd years of buying property The most expensive purchase was for a property we recently purchased in Goulburn that settled last week. We only paid $245,000. Yes folks that is our most expensive purchase to date.

I did a rough tally of properties from over the years that I/we have bought (I'm sure I've missed a few, but you get the idea) :

Edgewater WA (land) - $15,000
Embleton WA (house 1/3 share)
Subiaco (house) - $50,000
Kingsley WA (house & land) - $55,000
Wungong WA (house/5 acres)
Myaree WA (house) - $30,000
Belmont WA (unit) - $62,000
Bridgetown WA (house/2 acres) - $80,000
Macarthur ACT (house) - $110,000
Queanbeyan (unit) - $109,000
Queanbeyan (unit) - $160,000
Mystery Bay NSW (house/land/owner build)
Narooma NSW (townhouse)
Elizabeth Vale SA (house) - $189,000
Elizabeth South (house) - $101,000
Melton Vic (house) - $160,000
Melton Vic (house) - $185,000
Redbank Plains Qld (house/development) - $218,000
Redbank Plains Qld (new house dual occupancy build) - $202,000
Goodna Qld (house) - $235,000
Goulburn NSW (business/residence) - $245,000

I find it interesting that in today's constant bombardment in the media regarding unaffordable housing and mortgage stress that affordable housing is still available, but rarely highlighted. Most of the properties we've bought over the years were not in the CBD of a major city or in inner city locations, but they were affordable and within our budget.

We tended to buy locally as there were no books, magazines or internet to teach us about property investing, ... we just loved property and thought buying more was a good idea. We drove the streets in suburbs we liked or read the "property for sale" section in the newspapers and saved like mad to save the deposit for the next house, ... I'm pretty sure it was 30% back then and it was hard work getting the bank to approve more than one house loan and interest rates were pretty high compared to today.

A Queensland sparky told me a couple of weeks ago when I was renovating one of our properties that his dad told him never to sell your first property, ...... I thought this was a great piece of advice, I wish someone had told me this back then and I was smart enough to have listened ...

Anyway .... I just thought that it might make for an interesting discussion.

Mystery

 

[Cherry Pro]

Congratulations Mystery ...wonderful to read of your latest purchase. Your purchases may not have been expensive expensive but they have paved the way to your wealth and early retirement.

Reminded me of the book "The Slight Edge" ... it's the small successful actions repeated that make the difference.

Congratulations and thanks for sharing !
Amelia

 

[sash]

Good stuff mystery....have you still got all these?

You bought some for a song....particularly the ones in WA!

I was sitting around at home the other day thinking of all the properties that I and my wife and I have bought, sold, renovated, developed and held over 32 years since buying my first block of land at - 24 The Loop, Edgewater (WA) around 1978/9. I wish we still owned every one of them ...

In thirty odd years of buying property The most expensive purchase was for a property we recently purchased in Goulburn that settled last week. We only paid $245,000. Yes folks that is our most expensive purchase to date.

I did a rough tally of properties from over the years that I/we have bought (I'm sure I've missed a few, but you get the idea) :

Edgewater WA (land) - $15,000
Embleton WA (house 1/3 share)
Subiaco (house) - $50,000
Kingsley WA (house & land) - $55,000
Wungong WA (house/5 acres)
Myaree WA (house) - $30,000
Belmont WA (unit) - $62,000
Bridgetown WA (house/2 acres) - $80,000
Macarthur ACT (house) - $110,000
Queanbeyan (unit) - $109,000
Queanbeyan (unit) - $160,000
Mystery Bay NSW (house/land/owner build)
Narooma NSW (townhouse)
Elizabeth Vale SA (house) - $189,000
Elizabeth South (house) - $101,000
Melton Vic (house) - $160,000
Melton Vic (house) - $185,000
Redbank Plains Qld (house/development) - $218,000
Redbank Plains Qld (new house dual occupancy build) - $202,000
Goodna Qld (house) - $235,000
Goulburn NSW (business/residence) - $245,000

I find it interesting that in today's constant bombardment in the media regarding unaffordable housing and mortgage stress that affordable housing is still available, but rarely highlighted. Most of the properties we've bought over the years were not in the CBD of a major city or in inner city locations, but they were affordable and within our budget.

We tended to buy locally as there were no books, magazines or internet to teach us about property investing, ... we just loved property and thought buying more was a good idea. We drove the streets in suburbs we liked or read the "property for sale" section in the newspapers and saved like mad to save the deposit for the next house, ... I'm pretty sure it was 30% back then and it was hard work getting the bank to approve more than one house loan and interest rates were pretty high compared to today.

A Queensland sparky told me a couple of weeks ago when I was renovating one of our properties that his dad told him never to sell your first property, ...... I thought this was a great piece of advice, I wish someone had told me this back then and I was smart enough to have listened ...

Anyway .... I just thought that it might make for an interesting discussion.

Mystery

 

[MTR]

I was sitting around at home the other day thinking of all the properties that I and my wife and I have bought, sold, renovated, developed and held over 32 years since buying my first block of land at - 24 The Loop, Edgewater (WA) around 1978/9. I wish we still owned every one of them ...

In thirty odd years of buying property The most expensive purchase was for a property we recently purchased in Goulburn that settled last week. We only paid $245,000. Yes folks that is our most expensive purchase to date.

I did a rough tally of properties from over the years that I/we have bought (I'm sure I've missed a few, but you get the idea) :

Edgewater WA (land) - $15,000
Embleton WA (house 1/3 share)
Subiaco (house) - $50,000
Kingsley WA (house & land) - $55,000
Wungong WA (house/5 acres)
Myaree WA (house) - $30,000
Belmont WA (unit) - $62,000
Bridgetown WA (house/2 acres) - $80,000
Macarthur ACT (house) - $110,000
Queanbeyan (unit) - $109,000
Queanbeyan (unit) - $160,000
Mystery Bay NSW (house/land/owner build)
Narooma NSW (townhouse)
Elizabeth Vale SA (house) - $189,000
Elizabeth South (house) - $101,000
Melton Vic (house) - $160,000
Melton Vic (house) - $185,000
Redbank Plains Qld (house/development) - $218,000
Redbank Plains Qld (new house dual occupancy build) - $202,000
Goodna Qld (house) - $235,000
Goulburn NSW (business/residence) - $245,000

I find it interesting that in today's constant bombardment in the media regarding unaffordable housing and mortgage stress that affordable housing is still available, but rarely highlighted. Most of the properties we've bought over the years were not in the CBD of a major city or in inner city locations, but they were affordable and within our budget.

We tended to buy locally as there were no books, magazines or internet to teach us about property investing, ... we just loved property and thought buying more was a good idea. We drove the streets in suburbs we liked or read the "property for sale" section in the newspapers and saved like mad to save the deposit for the next house, ... I'm pretty sure it was 30% back then and it was hard work getting the bank to approve more than one house loan and interest rates were pretty high compared to today.

A Queensland sparky told me a couple of weeks ago when I was renovating one of our properties that his dad told him never to sell your first property, ...... I thought this was a great piece of advice, I wish someone had told me this back then and I was smart enough to have listened ...

Anyway .... I just thought that it might make for an interesting discussion.

Mystery

Subiaco, WA is blue chip, a house in Subi entry point today would he around $800K-900K which would require a reno and extension, I think median is around $1M, so at your purchase price $50K you would have purchased it at least 30 years ago or more is that right, good for you???? I was purchasing around 17 years ago for around $200K??

I would be keen on more info. Well done anyway on your pick here



Cheers, MTR

 

[mystery]

Congratulations Mystery ...wonderful to read of your latest purchase. Your purchases may not have been expensive expensive but they have paved the way to your wealth and early retirement.

Reminded me of the book "The Slight Edge" ... it's the small successful actions repeated that make the difference.

Congratulations and thanks for sharing !
Amelia

Thanks Amelia

Good stuff mystery....have you still got all these?

You bought some for a song....particularly the ones in WA!

No Sash, .... We bought and sold as we went along and finally sold our last 3 Perth properties in 92. It was the right decision at the time and we made good capital gains, but geez ... hindsight eh! ... LOL

Subiaco, WA is blue chip, a house in Subi entry point today would he around $800K-900K which would require a reno and extension, I think median is around $1M, so at this price $50K you would have purchased it at least 30 years ago or more is that right, or you just got lucky, good for you???? I was purchasing around 17 years ago for around $200K?? So, have I missed something... do you mean unit, I would be keen on more info. Well done anyway on your pick here

Cheers, MTR

MTR .... yes, .... Subi was an old rundown house ... I think it was late 1970's or 1980-81 when we bought ... can't remember, but I know I used the profit from the sale of the Edgewater block to purchase. We didn't hold it for long ... We got some instant capital gain and sold ... I don't even remember the street. We've lived on the east coast for over 20 years now, so you forget over time.

Mystery

 

[MTR]

Hi Mystery
thanks.

All the best

Cheers, MTR

 

[jingo]

A Queensland sparky told me a couple of weeks ago when I was renovating one of our properties that his dad told him never to sell your first property, ...... I thought this was a great piece of advice, I wish someone had told me this back then and I was smart enough to have listened ...

Anyway .... I just thought that it might make for an interesting discussion.

Mystery

Great list of properties, Mystery.

I guess at the time, your strategy was to renovate and then sell the IP's, not to hold them. Also, you would have been investing through periods of very high interest rates - which may have made holding them difficult if not impossible??

Regards Jason

 

[mystery]

Great list of properties, Mystery.

I guess at the time, your strategy was to renovate and then sell the IP's, not to hold them. Also, you would have been investing through periods of very high interest rates - which may have made holding them difficult if not impossible??

Regards Jason

Thanks for the reply Jason, ........ I was hoping the thread would encourage discussion from other people to share experiences of their purchases over the years etc, but obviously I didn't word my first post clearly enough, ...

The interest rates weren't really a big problem as we earned pretty good wages and because we always put in a deposit the loan amounts weren't a major worry. The problem was we didn't have the information that is available today. We were pretty much ignorant to the benefits of holding property and using the equity to re-invest. That sort of information just wasn't widely known. We just bought and sold to release the cash for the next purchase, ... we didn't know any better.

Most of the properties on that list are long gone unfortunately, but hopefully we've managed to pick up some tips along the way .... Our strategy these days is to hold a reduced number of IP's (fed up with tenants and PM's not looking after our IP's) and only buy property that can be value added such as small cosmetic/sell renovation projects, major renovation or small development (dual occupancy/subdivision) to build instant equity. This strategy is working very well for us in the current stagnant period in real estate.

We also decided to treat property a bit like shares, ... if one is not performing then dump it and re-invest the funds into another location or a property with value adding potential. Sure you have buying/selling costs but with the right property you can more than make it up by buying a property with value adding potential. I figured that through a 7-10 year cycle we only really see substantial gain for a couple of years, the rest of the time increasing annual holding costs and funding the shortfall on several properties eats into any gains made and we are just treading water, it's very frustrating.

As an example of what I'm talking about ... I renovated one of our IP's in Qld 18 months ago.... nothing more could be done to value add and the market looked like remaining stagnant for a few years and even after the work it was still negatively geared, so we sold it for a decent price instead of having holding costs eat away reserve funds.

We re-invested those funds into another Qld IP we owned by doing a new house build (4,2,2) as part of a dual occupancy development and I renovated the old house. The development has netted us a $160,000 to $180,000 equity gain and it will be cash flow positive after all costs are deducted and depreciation factored in from day one and this is in a very flat Queensland market.

If we had kept things as they were we would have had two negatively geared non performing properties, ... by making the strategic decision we did, .... we still have two properties, but they don't cost anything to hold and we have considerable equity which we didn't have before.

It is this sort of return that we are looking for these day's ... gone is the buy and hold plan for us. Unless we can make a property cash flow positive then it has to go .... I don't mind paying tax by developing a passive income from property ... It is far less stressful and a much more fun way of investing and after all it really should be an enjoyable journey ...

I'm sure I'm not telling anyone anything new and plenty of SS's are far more knowledgeable than me and have probably been working smarter strategies for decades ....

Mystery

PS ... I was only going to give a short reply, but I couldn't stop typing ...

 

[Edmond Dantes]

I always read your posts with interest and although my experience is minuscule to what yours is, this is exactly where I'm planning my investment path to go. Also, my IP is in Goodna and I agree 100% on what you saying about having a property costing you money, capital gains stagnant for years (goodna!), but holding costs going through the roof. This is my first IP (and only one at this stage) and won't be selling it. I've only had it for couple of years and even though it's costing me money, selling it now will cost me even more. My future IPs will have to have some sort of way to increase equity by either cosmetic renovation, or opportunity for development (granny flat or even more if possible), even if it's in the longer term when I have enough funds to do it.

Have had the same tenant since I bought my property and has been always on time with rent (touch wood).

Also, unfortunately the price bracket you've purchased also comes with more hassles, with low socioeconomic tenants and *most* of the times, more issues. But, less holding costs that having a $500k property with a yield of 4%, praying that capital gains will outweight the costs.

 

[kathryn d]

Well done Mystery.

Our most expensive purchase was an 11 unit apt building for $310K
and our cheapest was a transportable (3 bed mobile home) on a rented lot for $10K

They both need a bit of work....nothing fancy, but safe and livable.
The apts about $25k, and the mobile about $2,500.

So far we haven't sold any properties.
2012 was the first year since 2004, that we hadn't purchased more.

 

[MsAli]

Well done Mystery and thank you for sharing your successes . Inspirational !

From what I understand your strategy was cash flow as you bought in the lower socio economic areas?

At what age did you retire?

What would be your advice for a 20 something investor? About transitioning from corporate to full time investment sooner than later?

Gives me good perspective of where I could be in the future.

Cheers,
MsAli

 

[mystery]

Well done Mystery and thank you for sharing your successes . Inspirational !

From what I understand your strategy was cash flow as you bought in the lower socio economic areas?

At what age did you retire?

What would be your advice for a 20 something investor? About transitioning from corporate to full time investment sooner than later?

Gives me good perspective of where I could be in the future.

Cheers,
MsAli

MsAli,...... I certainly haven't retired as I'm only 54 p), ... I've definitely slowed down and at present I don't work a regular job through personal choice and my wife has a passive income coming in. I still do projects to create income, but not full time and not for customers, just for my wife and I. What helps is that on renovation projects, I am able to do at least 80% of the work myself, so I save huge amounts in labour costs, but I get the return when and if we sell or through rent increases/equity gain due to the improvements done.

I have spent quite a bit of time not working a regular job and just hanging around, but I got bored doing the same things day in and day out. I love being around property, so I look for opportunities to turn that passion into dollars, but my body is starting to hint that a smarter way would be to "project manage", especially as the aches and pains are more pronounced these days ...

The latest dual occupancy build showed me that I can watch from a distance as someone else does all the work and I still make equity profit and I didn't have to raise a sweat .... I presume this is what they call "working smarter". I particularly noticed this as I was sweating in 36c heat doing the reno in the older house next door recently.

RE: the income stream, ... hmm, lower socioeconomic area are fine, but they come with the obvious problems (trashed properties, loss of rent, heavy wear and tear etc).... We sometimes think it would have been better to have invested one or two levels higher in the property market.

Also at the lower socioeconomic level you can also come up against what I call the "rent ceiling", .. this means that you are limited in the amount of money for rent increases you can ask for due to an affordability issue. You can only ask what people can afford to pay in that area and this does not always reflect what you should be getting for your property.

Re: you moving from corporate to full time investing .... I can't really answer that for you. The answer really lies in what area of property investing is your passion and forte. I certainly feel that at present small developments or maybe some commercial is the way to go, but you really have to be flexible as cycles turn and in a few years another area of investing will be better value.

Don't be in a hurry to quit your current job, as you can still create wealth through property on a spare time basis. Not so much from hands on, but more from "project managing" small developments/renovations. Having a wage is pretty much an essential ingredient to gaining access to funds to finance the deals. Banks are funny that way, ... they still want to see proof that you can pay them back, so it is definitely beneficial to keep a regular wage coming in until you can replace that wage plus more ... At that point you then have the choice of leaving your employment to pursue property or another passion as a self funded tycoon ...

There are many SS forumites that have achieved far more than I have and are much smarter than me .... Ask some of them for their success secrets and then cut and paste those ideas that you believe will give you the ingredients for success and formulate your plan. Having the plan in writing is very powerful and will inspire you to greater things ... "What your mind can conceive and believe you will achieve"

I hope this answered your question, .... Good luck MsAli

Mystery

 

[redwing]

Hi Mystery

re: The below and looking at the list, I'm taking it you've relocated a few times then

We tended to buy locally as there were no books, magazines or internet to teach us about property investing, ... we just loved property and thought buying more was a good idea. We drove the streets in suburbs we liked or read the "property for sale" section in the newspapers and saved like mad to save the deposit for the next house, ... I'm pretty sure it was 30% back then and it was hard work getting the bank to approve more than one house loan and interest rates were pretty high compared to today.

Great read with the list, interesting prices on some of the early purchases

House & Land package in Kingsley WA $55k

According to realestate.com.au

The most recent median house price for Kingsley is $619,500 and the median unit price is $446,000.

 

[mystery]

Hi Mystery

re: The below and looking at the list, I'm taking it you've relocated a few times then

Great read with the list, interesting prices on some of the early purchases

House & Land package in Kingsley WA $55k

According to realestate.com.au

Thanks Redwing, ..... I was talking to a buyers agent in Perth on the phone about 4-5 years ago now. I mentioned to him about my first ever purchase ... the block of land in Edgewater .... I asked him what it would be worth at that time and he said he knew the location and said "probably about $550,000-$600,000", ... I'm not sure how accurate he was, but geez ... who'd have thought, .. Perth has gone crazy.

Yes we do move around a bit .... We have never stayed very long in one place. We have been in our current home only 2 years after a complete gutting of the place back to stud wall/skeleton and then basically re-building internally....

We are moving to the latest property purchase in Goulburn at Christmas/New Year to start again with another reno (We sold our current home yesterday). The Goulburn one will be interesting, .. it's an old photographic studio/residence ... It will be a challenge but loads of potential upside if done well.

Re: the Kingsley H&L ..... I remember bidding at the land auction that surrounded the primary school and managed to get a block for around $14,000 .... We then just selected a small project home to be built on it. It must have been around 1980/81 at a guess. I just looked at Google Earth .... I think and I'm only guessing here that it was McDowell Crescent .... I know it was opposite a primary school.

It's the biggest regret we have ... selling our Perth/WA properties in 1992 (we had 3 at the time) .... We made good money (The Myaree place on Marmion Street bought for $30,000 and sold for $110,000 after a couple of years and a makeover), but it would have been unbelievable if we still had them ... Still, we all have those stories.

Something I neglected to mention was that as of 2001/02 we had no house and only about $40,000 in the bank after a failed retail business venture .... We bought a block of land on the NSW coast and I built a house with my own hands using our savings, ..... It was the equity from this place that got us started again. We have got into our current position basically in the past decade by sheer hard work and determination. As they say if you've done it once then the second time should be easier ...... I'll let you know

Mystery

 

[redwing]

Thanks Mystery

Is the current strategy to renovate a PPoR and then move onward and upwards into the next?

 

[mystery]

Thanks Mystery

Is the current strategy to renovate a PPoR and then move onward and upwards into the next?

We still hold several IP's, but yes .... more development projects of PPOR's and sub-division and dual occupancy projects preferably as part of a PPOR purchase. I've done too many reno's a long way from home, so I'm looking for deals closer to where we live ... It's just easier.

We have 11-12 years until legal retirement age, so with what we know and the experience gained, we may as well take advantage of the opportunity to build more wealth and boost our retirement age nest egg while we can .... That's the plan anyway .... I'll let you know how it goes around 2023/24 ...

Mystery

 

[redwing]

Edgewater WA (land) - $15,000
Embleton WA (house 1/3 share)
Subiaco (house) - $50,000
Kingsley WA (house & land) - $55,000
Wungong WA (house/5 acres)
Myaree WA (house) - $30,000
Belmont WA (unit) - $62,000
Bridgetown WA (house/2 acres) - $80,000
Macarthur ACT (house) - $110,000
Queanbeyan (unit) - $109,000
Queanbeyan (unit) - $160,000
Mystery Bay NSW (house/land/owner build)
Narooma NSW (townhouse)
Elizabeth Vale SA (house) - $189,000
Elizabeth South (house) - $101,000
Melton Vic (house) - $160,000
Melton Vic (house) - $185,000
Redbank Plains Qld (house/development) - $218,000
Redbank Plains Qld (new house dual occupancy build) - $202,000
Goodna Qld (house) - $235,000
Goulburn NSW (business/residence) - $245,000

It makes me want to go back and review everything over the years though; its great that you've tracked it all

 

[mflying]

Hi Mystery,

Great post! and great to see insight of your journey in property investment.

It inspires me!

We both bought in same town at same time (Goulburn) and same price range!

we are just embarking on jounry of property investing and may learn trick or two from experience people like yourself.