Should we re think our strategy?

Well four years in and we only have 2 x IP's Strategy is to go for long term growth, cash flow is almost neutral on one, not on the other.

1st IP 2 bed apartment in Kensington Vic renting at $320 per week, paid $418k in 2010, recently told if we sold it expect high 300's maybe low 400's, Was rented out when we bought at $345 had to drop recently with competition from new apartments

2nd IP bought August this year - 2 bed apartment in North Melbourne for $470k , rented out at $420 per week. Vendor had done full reno prior to us buying was rented out before reno at $385.

Have pretty much used our all our LOC for deposits and equity against our PPOR (approx. 1mill in Ivanhoe)

Have tried to focus on inner city areas close to all amenieties ie uni and hospitals etc with long term capital growth in ten years

Not sure what to do next I think something like a townhouse / duplex interstate ie Brisvegas or Adelaide would be good.

Kensington would prefer to hold as not keen on making a loss at this stage,
North Melbourne hoping will see some decent capital growth over the next few years.

Mistakes - 2 bed apartment in Hawthorn - bought for 246k sold for $280k to friends after 1.5 years rented out. Should have held it, but once again needed to finance next move for PPOR. Close to Swinburne and 1 minute walk to train station.

East Doncaster sold PPOR to finance Ivanhoe for $611k in 2007 wonder what it would be worth now - had to sell to do new build.

Wins - buy first house in East Donnie for $150k sold for $290k very minor cosmetic reno only, 2nd house in East Donnie above bought for $358k minor kitchen reno and floors, sold for $611k.

So have done OK with PPOR's and first investment property, now not so sure headed in right direction.

Kensington does seem to be picking up but a lot of new apartment builds still around there. North Melbourne I am hoping will become the new East Melbourne in the next five to ten year.

I work with reasonable salary and O/T wife works casual / part time.

No other income generation source. No other loans for cars etc.

I'd like to retire in ten years but can't see it happening at the moment. should we try and go for a mix of cash flow positive and growth? Have seen so many success stories such as Rixter on here.
 
No other income generation source.

I'd like to retire in ten years but can't see it happening at the moment.

I dont know your financials, nor your goals and aspirations and true fears.

One thing I can tell you for 100 % certain, is that if you cant see it, no one else can, and it aint gonna happen.

I also know that 10 years is a long time that will allow you to find and tap that other income generation source,and its probably Not where you feel it will be.

ta
rolf
 
One thing I can tell you for 100 % certain, is that if you cant see it, no one else can, and it aint gonna happen.

Exactly what Rolf said up there /\.

I say it all the time...Success is 80% correct mindset x 20% applied strategy.

In other words, HOW you think is FOUR times more important than how you PLAN to do it.
 
Last edited:
PI can certainly be brutal... you can go 8 years or more and not see growth. then you sell and the dam thing doubles!

don't fall for the ol' buy n die strategy, you need to work it harder than that
 
don't fall for the ol' buy n die strategy, you need to work it harder than that

Yep. If you're going to do this, you may as well be in Shares instead. They'll give you better return than buy and hold.

The benefit of property over shares is the ability to improve it, so do that.
 
Well four years in and we only have 2 x IP's Strategy is to go for long term growth, cash flow is almost neutral on one, not on the other.

1st IP 2 bed apartment in Kensington Vic renting at $320 per week, paid $418k in 2010, recently told if we sold it expect high 300's maybe low 400's, Was rented out when we bought at $345 had to drop recently with competition from new apartments

2nd IP bought August this year - 2 bed apartment in North Melbourne for $470k , rented out at $420 per week. Vendor had done full reno prior to us buying was rented out before reno at $385.

Have pretty much used our all our LOC for deposits and equity against our PPOR (approx. 1mill in Ivanhoe)

Have tried to focus on inner city areas close to all amenieties ie uni and hospitals etc with long term capital growth in ten years

Not sure what to do next I think something like a townhouse / duplex interstate ie Brisvegas or Adelaide would be good.

Kensington would prefer to hold as not keen on making a loss at this stage,
North Melbourne hoping will see some decent capital growth over the next few years.

Mistakes - 2 bed apartment in Hawthorn - bought for 246k sold for $280k to friends after 1.5 years rented out. Should have held it, but once again needed to finance next move for PPOR. Close to Swinburne and 1 minute walk to train station.

East Doncaster sold PPOR to finance Ivanhoe for $611k in 2007 wonder what it would be worth now - had to sell to do new build.

Wins - buy first house in East Donnie for $150k sold for $290k very minor cosmetic reno only, 2nd house in East Donnie above bought for $358k minor kitchen reno and floors, sold for $611k.

So have done OK with PPOR's and first investment property, now not so sure headed in right direction.

Kensington does seem to be picking up but a lot of new apartment builds still around there. North Melbourne I am hoping will become the new East Melbourne in the next five to ten year.

I work with reasonable salary and O/T wife works casual / part time.

No other income generation source. No other loans for cars etc.

I'd like to retire in ten years but can't see it happening at the moment. should we try and go for a mix of cash flow positive and growth? Have seen so many success stories such as Rixter on here.

Hi sexy40,

If you want to achieve your goal of retiring in 10 years (and you haven't stated that goal clearly yet so its impossible to know for sure) you are going to have to at least do 3 things.

1. Like Rolf was implying, work on your mindset
2. Learn more about property investing. (IMHO you seem to lack knowledge in some fundamental areas which I believe is slowing you down/limiting your CG potentials)
3. You need a much more aggressive strategy to get to your goals. I see this all the time, people have their goals and often choose a strategy/approach that just wont get them there in the timeframe they want.

IMHO if you dont do the above 3, retiring in 10 years is (assuming full time retirement) highly unlikely.

But the only thing stopping you is you. You can do it! ;)

Leo
 
Last edited:
don't fall for the ol' buy n die strategy, you need to work it harder than that

Exactly - to follow on from Ausprop, in relation to working it harder.... you just can't buy any property and use it within a buy & hold strategy or any other strategy for that matter.

You need to plan a buy & hold strategy out so as to maximise the performance you require over the time frame you have allotted to it.

Things you need to plan out, in no particular order, are: the types of property you buy including age, areas you buy them in, how many you buy, how often you buy them, your purchase budget & yield they need to have, your financial serviceability & portfolio loan structure required, ability to value add, asset protection etc etc.

These are some the types of things that need to be addressed & maintained on the buy & hold wheel.

I hope this provides some food for thought.
 
Hi,

I hope this article by Michael Yardney will help you as it did in formulating my strategy.

http://propertyupdate.com.au/10-thi...uying-an-investment-property-michael-yardney/

especially 4 points below and my favourite is the 4th one (I've started asking myself these questions before buying any new IPs)

Buy a property below its intrinsic value.

In an area that has a long history of strong capital growth.

Look for a property with a twist ? something unique, special or different.

A Property where you can manufacture capital growth through renovations or redevelopment.

Good Luck!
 
Hi Teshy, I really like some of the points you bring up below:

[QUOE=Teshy;1244472]Hi,

I hope this article by Michael Yardney will help you as it did in formulating my strategy.

http://propertyupdate.com.au/10-thi...uying-an-investment-property-michael-yardney/

especially 4 points below and my favourite is the 4th one (I've started asking myself these questions before buying any new IPs)

Buy a property below its intrinsic value. Agree 1000%! IMHO its very important regardless of whatever strategy you want to use.

In an area that has a long history of strong capital growth. I don't believe this is vital, just my opinion.

Look for a property with a twist ? something unique, special or different. Agree 100%!

A Property where you can manufacture capital growth through renovations or redevelopment. Also agree 100%
Good Luck![/QUOTE]

nice one teshy!

Leo
 
Yeah I've re jigged that point to not invest in woop woop.

Hi teshy,

I actually didn't type:

"In an area that has a long history of strong capital growth". That was Michael Yardney. What I was saying is that investing in an area that has had a long history of strong CG is not vitally IMO.

Cheers

leo
 
Hi teshy,

I actually didn't type:

"In an area that has a long history of strong capital growth". That was Michael Yardney. What I was saying is that investing in an area that has had a long history of strong CG is not vitally IMO.

Cheers

leo

Yep it really depends on one's chosen investment strategy/s.
 
Hi teshy,

What I was saying is that investing in an area that has had a long history of strong CG is not vitally IMO.

Cheers

leo

Completely agree Leo. I was saying I've re jigged this point to not invest too far from major cities & towns.
 
Yep it really depends on one's chosen investment strategy/s.

I agree that investing in an area where there is a long history of capital growth could be replaced now by - invest in an area where the demographic has an above average disposable income - because that is what will cause above average growth in property values in the future.
 
Last edited by a moderator:
or will benefit from demographic change, or where there is a supply/demand imbalance. In fact balance between supply and demand is more important than anything
 
Thanks everyone for all the advice so far will consider those options. Might hold Kensington for a while and see how we track, then in the mean time try and pay down as much debt as possible.

Also thanks for your advice Michael. We have followed you web site closely and been to some of your seminars. We almost bought one of your packages in Epping however got offered land in a slightly better position and we already to buy from Vic Urban and discovered it had a big easement at the back. That put us off the area.

Looking at all the signs for Kensington logically it must grow given where it is located and the changing demographic, but still a lot of new apartments going up. Not sure how many more they can build around there. The older streets of Kensington are much nicer than some of the new build wastelands on busy roads. But some people want new and shiny and the depreciation schedules. Then they get stuck with large body corp fees for the pool and spa and suna and gym and lifts etc etc etc
 
Sexyv40

WE DO NOT SELL PROPERTY - and I would never, ever have recommended Epping - it clearly doesn't fit int he guidelines discussed in this thread.

You must be confusing us with someone else - we also avoid house and land

Good luck with Kensington



Thanks everyone for all the advice so far will consider those options. Might hold Kensington for a while and see how we track, then in the mean time try and pay down as much debt as possible.

Also thanks for your advice Michael. We have followed you web site closely and been to some of your seminars. We almost bought one of your packages in Epping however got offered land in a slightly better position and we already to buy from Vic Urban and discovered it had a big easement at the back. That put us off the area.

Looking at all the signs for Kensington logically it must grow given where it is located and the changing demographic, but still a lot of new apartments going up. Not sure how many more they can build around there. The older streets of Kensington are much nicer than some of the new build wastelands on busy roads. But some people want new and shiny and the depreciation schedules. Then they get stuck with large body corp fees for the pool and spa and suna and gym and lifts etc etc etc
 
Back
Top