Just want to know your opinion for different investment stragegies (cons and pros analysis) for buy properties for subdivision in high end market i.e Kew, Camberwell, Balwyn and mid end market i.e Nunawading, Blackburn, Mitcham, Ringwood?
For high end market:
Potential:
- subdivided units is highly seeked by buyer
- remove competition from other unaffortable investors
Problem:
- higher price means higher stamp duty, higher land tax
- more equity required
- cashflow problem, rent cannot cover the loan interest
For mid ed maket
Potential
- can buy more properties with the same equity
- less tax and stamp duty, it means more equity for investment
- high rent if good location i.e public transport, schools, uni
- better cashflow
Problem:
- never enter the high end market as the price goes up faster than mid end market
For high end market:
Potential:
- subdivided units is highly seeked by buyer
- remove competition from other unaffortable investors
Problem:
- higher price means higher stamp duty, higher land tax
- more equity required
- cashflow problem, rent cannot cover the loan interest
For mid ed maket
Potential
- can buy more properties with the same equity
- less tax and stamp duty, it means more equity for investment
- high rent if good location i.e public transport, schools, uni
- better cashflow
Problem:
- never enter the high end market as the price goes up faster than mid end market