In one of the LOE threads Steve asked me to describe what we've done
Our strategy has been simple.
Twice we've done ( well ,one done , one about to be ) subdivisions in sydneys north shore. They say, start close at home and that's were we started .... our home ( Even though we were told by council officials that it was not subdividable ...but that another story .... never trust Experts
. Listen to them , but then make up your own mind.
We subdivided and due to finance concerns sold one block, built on the second and then sold that. To find the second we looked at every property that came up for sale for several months in our target suburbs .
You'd think if some one was on a 3070M2 block they'd advertise the size , but their loss was our gain. Bought this for about half the price of what we'd got for our previous house , so with no PPOR mortgage ( Quickly rectified by Rolf ) we went on a spending spree in Hobart, Logan , Rockhampton and Townsville.
People talk about low returns of 5% for property, but if you buy in the right time of the cycle you can get good returns on well placed properties. A block of units we bought in Newtown , Hobart are returning gross 15 % on the purchase price with minimal in the way of maintainence. I know several members on the forum who have achieved these and better returns. Difficult know but probably not impossible. There's some very creative members on the forum . Even Logan is returning 12 % for people who bought prior to the current boom , though it tends to have more maintainence issues, and anyone buying into these types of areas expecting to get a cash return on a 8% gross return is likely to be disappointed.
It's taken about two years to get a dual occ / subdivision approved on our new home , though this time we're going to develope it fully ourselves. While we could pay for it with borrowed funds, we're selling / sold some of our properties in order to keep the debt level down mainly from the SANF point of view. Hope to finish building this year and if the sydney market is OK we'll sell, but if it's tanked, we'll be in the position to transfer it into a trust fund and hold it there untill the market picks up again.
If we sell, I'll have the option of selling my business and moving onto something else ( though I may keep going for a while yet). I'll also be looking at share investing. I've had an interest in shares predating property ( though it's been mainly on hold for the last three years ) I've recently developed a mechanical trading system which I've started trading about two months ago. After about five weeks I thought I was a f.... genius , but it is a long term system and I knew I shouldn't expect to make money quickly . The thing that got me excited at the moment if meeting a friend who's returning 40% pa on a conservative mechanical system. My system is a variation of his and on back testing returns over 50 % . I'll just have to wait to see if I can get that sort of return in real life.
I would like to trade shares successfully myself , however if I find I'm in the majority with most people and just end up loosing money, I'll be looking at investing with some more aggressive managed funds , with some degree of gearing. Steve would certainly be one person I'd be talking to at this stage as, after all his original expertise is in shares.
I will be looking at buying somewhere in Sydney in 2006 ( not cash flow , good capital growth ) because I think there are some areas that have the potential to give above average growth in the next cycle and possibly go up even if the overall market is sick. Within that area, I'll be looking for a renovator or possible something that can be developed as a dual occ , or rented on a room / room basis. A more exciting option would be trying to aggragate several blocks for a medium density / or a high rise using options , with the intention to flip the sale.
Once there are signs that the sysdney market is moving then I'd start buying more aggressively , Keeping some for longer term , but also I'd be happy to more actively trade in some areas in a company structure. Advantage of this is you only pay company tax rates if you hold for less than 1 year, and with this I'd be looking at some short term trading as well as possibly trying to get a team of reliable tradesman to do short term reno's with a view to sell quickly. Then Gradually doing the same moving along the east coast.
Of course this is just the back up plan in case I don't write a worldwide number one hit song...... and that will become a priority after we finish our current project.
I also put some of my thinking in these posts last year.
http://www.somersoft.com/forums/showthread.php?t=14045&highlight=turn
http://www.somersoft.com/forums/showthread.php?t=11656
See Change
Our strategy has been simple.
Twice we've done ( well ,one done , one about to be ) subdivisions in sydneys north shore. They say, start close at home and that's were we started .... our home ( Even though we were told by council officials that it was not subdividable ...but that another story .... never trust Experts
. Listen to them , but then make up your own mind.We subdivided and due to finance concerns sold one block, built on the second and then sold that. To find the second we looked at every property that came up for sale for several months in our target suburbs .
You'd think if some one was on a 3070M2 block they'd advertise the size , but their loss was our gain. Bought this for about half the price of what we'd got for our previous house , so with no PPOR mortgage ( Quickly rectified by Rolf ) we went on a spending spree in Hobart, Logan , Rockhampton and Townsville.
People talk about low returns of 5% for property, but if you buy in the right time of the cycle you can get good returns on well placed properties. A block of units we bought in Newtown , Hobart are returning gross 15 % on the purchase price with minimal in the way of maintainence. I know several members on the forum who have achieved these and better returns. Difficult know but probably not impossible. There's some very creative members on the forum . Even Logan is returning 12 % for people who bought prior to the current boom , though it tends to have more maintainence issues, and anyone buying into these types of areas expecting to get a cash return on a 8% gross return is likely to be disappointed.
It's taken about two years to get a dual occ / subdivision approved on our new home , though this time we're going to develope it fully ourselves. While we could pay for it with borrowed funds, we're selling / sold some of our properties in order to keep the debt level down mainly from the SANF point of view. Hope to finish building this year and if the sydney market is OK we'll sell, but if it's tanked, we'll be in the position to transfer it into a trust fund and hold it there untill the market picks up again.
If we sell, I'll have the option of selling my business and moving onto something else ( though I may keep going for a while yet). I'll also be looking at share investing. I've had an interest in shares predating property ( though it's been mainly on hold for the last three years ) I've recently developed a mechanical trading system which I've started trading about two months ago. After about five weeks I thought I was a f.... genius , but it is a long term system and I knew I shouldn't expect to make money quickly
. The thing that got me excited at the moment if meeting a friend who's returning 40% pa on a conservative mechanical system. My system is a variation of his and on back testing returns over 50 % . I'll just have to wait to see if I can get that sort of return in real life.I would like to trade shares successfully myself , however if I find I'm in the majority with most people and just end up loosing money, I'll be looking at investing with some more aggressive managed funds , with some degree of gearing. Steve would certainly be one person I'd be talking to at this stage as, after all his original expertise is in shares.
I will be looking at buying somewhere in Sydney in 2006 ( not cash flow , good capital growth ) because I think there are some areas that have the potential to give above average growth in the next cycle and possibly go up even if the overall market is sick. Within that area, I'll be looking for a renovator or possible something that can be developed as a dual occ , or rented on a room / room basis. A more exciting option would be trying to aggragate several blocks for a medium density / or a high rise using options , with the intention to flip the sale.
Once there are signs that the sysdney market is moving then I'd start buying more aggressively , Keeping some for longer term , but also I'd be happy to more actively trade in some areas in a company structure. Advantage of this is you only pay company tax rates if you hold for less than 1 year, and with this I'd be looking at some short term trading as well as possibly trying to get a team of reliable tradesman to do short term reno's with a view to sell quickly. Then Gradually doing the same moving along the east coast.
Of course this is just the back up plan in case I don't write a worldwide number one hit song......
and that will become a priority after we finish our current project.I also put some of my thinking in these posts last year.
http://www.somersoft.com/forums/showthread.php?t=14045&highlight=turn
http://www.somersoft.com/forums/showthread.php?t=11656
See Change
