I found time to do a few valuations for my old firm last Saturday (only 5th weekend home in nearly 7 months, such are the travel demands of the new job).
After the inspection I was driving around looking at some comprable sales and as I drove by one I realised that I had valued it.
So I looked up the history.
Purchased in Jan 2003 for $200k, valued by me in Jan 2004 at $205k and sold again in Feb 2005 for $200k.
The property was in the Albion area of Sunshine in Melbourne's west.
The property would have yielded 4% gross.
When I inspected it it was rented to some refugees who only had 3 matresses, three kitchen chairs a table and a radio (it made an impression on me) and there was only one change of clothes per person. My guess is that there were some rental vacancies during the holding period.
After stamp duty, commissions negative gearing, rates etc the owners of this IP would have lost money over the two year holding period.
It just reinforces the fact that property is a LONG TERM investment and that the HK strategies of only living off capital growth will not work in all years of the property cycle.
I would venture to guess that in 25 years $200k for this property will seem a steal........
Just some food for thought,
cheers,
RightValue
After the inspection I was driving around looking at some comprable sales and as I drove by one I realised that I had valued it.
So I looked up the history.
Purchased in Jan 2003 for $200k, valued by me in Jan 2004 at $205k and sold again in Feb 2005 for $200k.
The property was in the Albion area of Sunshine in Melbourne's west.
The property would have yielded 4% gross.
When I inspected it it was rented to some refugees who only had 3 matresses, three kitchen chairs a table and a radio (it made an impression on me) and there was only one change of clothes per person. My guess is that there were some rental vacancies during the holding period.
After stamp duty, commissions negative gearing, rates etc the owners of this IP would have lost money over the two year holding period.
It just reinforces the fact that property is a LONG TERM investment and that the HK strategies of only living off capital growth will not work in all years of the property cycle.
I would venture to guess that in 25 years $200k for this property will seem a steal........
Just some food for thought,
cheers,
RightValue