Poll: I have x Properties now

[D.T.]

Yup, I agree with you.

But perhaps its that self satisfaction of knowing xxx amount of IP's makes one happy?
Though they may only own 2% as a whole, with <5% net return as a whole

Whats the point of owning differently if it confers no benefit? In fact its probably a disadvantage.

 

[Harro]

Whats the point of owning differently if it confers no benefit? In fact its probably a disadvantage.

Could you please elaborate on your comment D.T.

 

[D.T.]

Could you please elaborate on your comment D.T.

I was referring to someone above who said they'd rather own 100% of one IP than 10% of 10. So, I'm asking why this is, because it isn't beneficial at all.

 

[Harro]

I was referring to someone above who said they'd rather own 100% of one IP than 10% of 10. So, I'm asking why this is, because it isn't beneficial at all.

I guess it's horses for courses. Personally, I would prefer to "Own" 3 IP's, rather than to be leveraged @ 80% into 10.

 

[D.T.]

I guess it's horses for courses. Personally, I would prefer to "Own" 3 IP's, rather than to be leveraged @ 80% into 10.

What benefit would that provide, financially? Can we do a hypothetical scenario?

Lets assume we're both talking about the same amount of money - $1mil say.

For $1mil you could own 3 x 333k IPs
For $1mil I could own 20% of $5mil IPs, which is 15 of those same 333k IPs

Say 10% growth and 10% yield for both of us because we're equally skilled

You get $100k growth per year and $100k rent per year and spend 0 on interest.

I get $500k growth per year and $500k rent per year and spend $250k on interest.

We both have to pay same council rates, property management, insurance etc so lets ignore them.

I profit $250k and you profit $100k from a rental standpoint, and the growth is nice too

 

[Ace in the Hole]

I guess it's horses for courses. Personally, I would prefer to "Own" 3 IP's, rather than to be leveraged @ 80% into 10.

I think everybody would take that deal.
100% of 3 x 500k properties = 1.5 mil equity.
20% of 10 x 500k properties = 1 mil equity.

Now if the fields were level, 100% of 2 vs 20% of 10, would you still prefer the non leveraged option?

 

[Harro]

I think everybody would take that deal.
100% of 3 x 500k properties = 1.5 mil equity.
20% of 10 x 500k properties = 1 mil equity.

Now if the fields were level, 100% of 2 vs 20% of 10, would you still prefer the non leveraged option?

Good example. At my stage in life (retired) I would choose to OWN, because it is a passive income stream, going solely to me.
If I were younger, different story. That's why I said horses for courses.

 

[Blixsem]

I think you example is a bit wonky with a 10% yield. Makes your point look much better.

 

[spludgey]

I think you example is a bit wonky with a 10% yield. Makes your point look much better.

Just needs to be a 7% yield or so currently to work out better. With loans being around the 4.8% mark, the remaining 2.2% should pay all the costs. Plus you'll get some depreciation on top.

 

[Intrinsic_Value]

my number of properties just got smaller this month!!!!

guess I'm not following the right track

 

[Intrinsic_Value]

.

Now if the fields were level, 100% of 2 vs 20% of 10, would you still prefer the non leveraged option?

not at this stage of the property cycle.

 

[sash]

I have hit 21....2 are still being built. Both in WA...one will be ready next month...the other will be ready by late Jan 2015.

Looking to get another 9 before I call it quits.....I am leaning more towards capital growth properties. Though I am getting an average of 6% return on most of which I buy.

The Mandurah purchase is now paying dividends. The land itself has jumped about 35k in the last year. I bought for 133k ...now the land itself is around 160k for 300sqm!

 

[D.T.]

Very nice sash

 

[sash]

Very nice sash

Thanks.

Brisbane and Adelaide are where Perth was in 2011...so good buying.

These markets will go off in 2016-2017...maybe sooner. Soon as Qld get rid of Newman the faster the market will recover.

 

[landlubber]

Well done Sash.

Well done Sash ...you clearly got your shoot together. We maxed at 35 ( all houses and units/aparts in/near cap cities. Now 62 and 7 years LOE and sold down to 27 atm. Keep going. It can be done. Focus, focus, focus. LL

 

[sash]

Thanks LL.

I am 47....hoping to pull the plug in about 6-8 years.

I plan to keep going.

How much do you pull out to live from your LOE strategy?

My LVR is reasonable at 40%....I plan to live off rents. But plan to sell some in NSW before the market tanks.

Well done Sash ...you clearly got your shoot together. We maxed at 35 ( all houses and units/aparts in/near cap cities. Now 62 and 7 years LOE and sold down to 27 atm. Keep going. It can be done. Focus, focus, focus. LL

 

[landlubber]

Thanks LL.

I am 47....hoping to pull the plug in about 6-8 years.

I plan to keep going.

How much do you pull out to live from your LOE strategy?

My LVR is reasonable at 40%....I plan to live off rents. But plan to sell some in NSW before the market tanks.

Hi Sash, that would be 55 which is same age as I pulled the pin. We live on 'about' $70 to $100 K per year ...depending on how much we spend on travel. 40% LVR is very reasonable. LL

 

[sash]

I get about 40-60k net already....will go to 70-100k once the 2 developments are done.

LVR will still be 40%. I am looking at couple more in Brissie.

Hi Sash, that would be 55 which is same age as I pulled the pin. We live on 'about' $70 to $100 K per year ...depending on how much we spend on travel. 40% LVR is very reasonable. LL

 

[ZachAnSel]

I get about 40-60k net already....will go to 70-100k once the 2 developments are done.

LVR will still be 40%. I am looking at couple more in Brissie.

Dumb questions Sash, why 40%? You can get the job faster if say push lvr to 50%?

Are you preparing something for rainy days?

 

[dajackal]

6th IP is under offer at the moment bringing portfolio LVR back up to 80%.

4 Sydney units purchased from 2009-2013
2 Brisbane houses purchased in 2014

should I keep going? planning on starting a family soon so don't want to take on too much risk.

PPOR is at 20% LVR and trying to pay it off ASAP