G'day Andrew_A,
Incisive questions - I'll do the best I can:-
Andrew_A said:
What CG, CAR and yield have you got out of this place since buying Les?
You mentioned greater than 10.4% CAR = very neat whatever it is
** edit, interested in the present yield as well and how close it is to 5%, must have another drive around Redcliffe soon
CG - You can deduce the answer from the following
CAR - I don't know the acronym (Compound Annual Return is a guess – how'd I go?) - your post indicates this relates to "% per year" of growth. Pre reno, I'd worked out that 14% is about right (estimated value $340k after 7 years on a $137k purchase)
Yield - well, it started at around 7.5% in 2000 - but then, where do we go from there? When purchasing, it is easy to quantify "I receive $200pw on a property that cost $137k" and call that 7.5%. But what happens as the VALUE goes up? Do we then say the yield has dropped (even though the mortgage/costs haven't grown?)
For me (I'm a simple bloke) the yield should relate to "what I paid vs what it returns" - on THAT basis, it continued to yield 7.5% - but growing as rent increased.
Post reno, with current value estimated at $410 to $420k, and a rent of $350 pw, some would say the yield is 4.3%. To me, though, I tend to think :-
Rent per year divided by (cost to purchase + reno cost) = 8.8% is a more useful measure for ME. Of course, if someone else bought this property today, then 4.3% would be relevant to them.
Andrew_A said:
Also do you have any older sales data as well, would be guessing you got a slice of the previous owners CG after a long flat period.
You could say that (I nearly agreed in a kneejerk reaction to your question), but then we did pay asking price (and would've gone over $140k if pushed) – just that THEY chose to sell at that time. They would've bought their new place as a "steal" as well. So, DID I get a slice of their CG after all? Debatable – but I reckon we "bought well" – even at Market Price.
When purchasing, I used PropertyValue and AussieValuer to get an idea of the previous values over the years. Bne had been quite flat (price-wise) for around 10 years over the 90's - ticking up only slightly in those 10 years (and even going down in some years).
In hindsight, the high yields back then were TELLING us the story. And they made HOLDING really easy too. And when "Mexicans"
realised this, it was all on !!!
Apart from the occasional lull, things haven't stopped since 2000 for Brisbane. Wellington Point had slowed over the last 2 years, but today, all of the "low priced" stuff is under contract very quickly – which means THIS place could be a half million property very soon (a year or two?). And I've seen comparable properties on the market today for $450k+ – maybe a little over-priced for now, but two months out…. Who knows?
Off-topic a bit, I am staggered at values in Logan today. I was VERY happy with the prices by mid 2006 (and had mentally decided "this is the peak for now" – WRONG !!) Our PPOR there has appreciated in value by over 20% in the last 12 months. This is after having already grown by 13% pa average from 1999 to 2007 – amazing !!
What can I say – SEQ just seems to be "on fire" today. Not complaining, mind.
Regards,
