Rebuilding the portfolio - house or unit?

[cegosling]

My husband and I are a classic example of what goes wrong when you don't know what you are doing. However knowing our mistakes - not holding/selling to soon/combined with losses made during the GFC and ill health have resulted in us trying to rebuild again.
We are both 50 (with a ten yr old child), and currently have 2 properties. A beach-side unit in a sought after location owing $153k/value $430k-rent $320pw. A house also in a good spot purchased November 2014 for $525/owing $530k-rent $435pw. We wish to buy one further property to complete our portfolio with the idea of holding all for a 10 year period and then living in unit 1 and selling off the rest of the portfolio. We currently have a job where our accommodation is provided free of charge. We now have the option of buying another beach-side unit ($350k) facing the sea in a group of 6 single storey. It is a good location, and the price is right, but my question is would it be best to settle for this unit, or look for a house which may have greater capital growth over this period. We just want to get it right this time!!Any suggestions welcome.

 

[Propertunity]

.... but my question is would it be best to settle for this unit, or look for a house which may have greater capital growth over this period.

You need to check the last 15-20 year history of the CG of Units Vs Houses for the area you are considering (as just one part of your DD). This is readily available data found in RP Data or Pricefinder etc.

 

[cegosling]

Thanks Propertunity I have looked over that - apart from an across the board drop in 11/12 it is similar. I guess our second train of thought is Unit 1 will be paid off in 5 yrs, and we could probably pay off this unit as well in the 10 yr time frame, so as a freehold asset its growth may be comparable with the growth in a home with 100%+ borrowings over that period.

 

[Propertunity]

..... we could probably pay off this unit as well in the 10 yr time frame, so as a freehold asset its growth may be comparable with the growth in a home with 100%+ borrowings over that period.

Whether or not the unit or the home is fully owned or fully or partly mortgaged will have zero effect on the capital growth.

 

[cegosling]

I realise that - I probably expressed it badly but meant to indicate that the fact that we could pay it off, combined with the capital growth over the period, may well give us more net cash at the end of the day.