strategy/action advise

Hello all,

I have spent the last 4 or so years lurking/reading on this forum and not contributing much. However, I am at an impasse.

Goal: 5 million in property assets (gross) by 2022 (Currently with just over 1 million in assets)

Strategy: Buy property in growth areas, properties that have value add potential.

We currently have equity that is been/has been drawn out. We could use this to buy now in a state other than NSW or we can sit on it and use it to buy in NSW once this mad rush dies down. Both are viable options with the 'safer' option being to buy now outside of NSW as it doesn't rely on waiting, or guesswork about the market. Waiting for the Sydney market to become more stable or waiting for (even a small) correction as per previous cycles seems riskier because it is a guessing game.

Can I ask for people's opinions/discussion to assist me and hubby in making a decision.
 
You have lots of options but I would suggest waiting for a correction in Sydney is not the best one of them. It could be a while and when it happen the correction could cost you a lot. Opportunity cost is a big deal.
 
Hello jkat!

Sounds like you are in a similar position with similar goals to us.

We don't plan on waiting to progress with further purchases and plan to (further) diversify in other states to;

1. Avoid/minimise land taxes and keep costs down.

2. Have exposure to different cities in different housing cycles. This will hopefully ensure that at least one of our properties will have had some growth every couple of years and we can spread our purchases year to year. If we only purchased in one market we could have a period where we might be limited by lack of growth in that market.
 
Hi jkat,

$4mil of property assets in 7 years time is certainly achievable, but I would start as soon as possible and map out a strategic course to get you there (and possibly beyond)

Assuming you are on a PAYG or are not receiving any form of exorbitant income, one of the key areas to structure properly now is finance so you don't run into serviceability walls down the track. There are many brokers on this forum who know how to get the most out of your income in terms of leverage, and to fit in line with your purchasing strategy

If you were to wait for a correction in Sydney or NSW, you may not be purchasing anything for a long while (even up to 2022!), so I would suggest looking at other states (Brisbane seems to be touted as the next up and comer and the amount of activity and threads on Brisbane seem to suggest this also)

Finally, I would look at the types of property to purchase for you to get to your end goal. $5 mil portfolio of stock standard Sydney properties will provide you with a very negative cashflow so it might be worth checking out areas that provide you with higher rental yields or perhaps places that qualify for dual occ?

Good luck.



Hello all,

I have spent the last 4 or so years lurking/reading on this forum and not contributing much. However, I am at an impasse.

Goal: 5 million in property assets (gross) by 2022 (Currently with just over 1 million in assets)

Strategy: Buy property in growth areas, properties that have value add potential.

We currently have equity that is been/has been drawn out. We could use this to buy now in a state other than NSW or we can sit on it and use it to buy in NSW once this mad rush dies down. Both are viable options with the 'safer' option being to buy now outside of NSW as it doesn't rely on waiting, or guesswork about the market. Waiting for the Sydney market to become more stable or waiting for (even a small) correction as per previous cycles seems riskier because it is a guessing game.

Can I ask for people's opinions/discussion to assist me and hubby in making a decision.
 
Goal: 5 million in property assets (gross) by 2022 (Currently with just over 1 million in assets)

Strategy: Buy property in growth areas, properties that have value add potential.

Getting $5M of gross assets does not seems to be the right sort of goal.

I think your goals should be a certain net worth or income stream by a certain date. Achieving this would then allow you to work part time, help others out or whatever your objective is.

To get to this your stategy could then be have $5M of diversified property assets achieving a certain growth rate and yield which, along with other things, will achieve your goal.

From that you can map out how many properties you would require and the type of characteristics they would have (to achieve the required growth and yield). You might find you need to do renovations, dual occupancies or developments to get to the objectives in the necessary timeframe.

Then, at least, you will have an idea of what you need to do when.

Hopefully then you can work out whether waiting out the market is going to get you there in the required timeframe.
 
You have lots of options but I would suggest waiting for a correction in Sydney is not the best one of them. It could be a while and when it happen the correction could cost you a lot. Opportunity cost is a big deal.

Thanks for this -- this is what I am thinking about and worried about. I like investing in NSW/Sydney because it is where I feel comfortable investing.

However, you have hit the nail on the head re: opportunity cost and this is what we need to discuss to see how it plays into our plans/goals.
 
1. Avoid/minimise land taxes and keep costs down.

2. Have exposure to different cities in different housing cycles. This will hopefully ensure that at least one of our properties will have had some growth every couple of years and we can spread our purchases year to year. If we only purchased in one market we could have a period where we might be limited by lack of growth in that market.

We have bought in VIC as well and are doing so for the same reasons you are. I just feel comfortable with Sydney/NSW and I know now is not the time to be buying here. *sigh*
 
Getting $5M of gross assets does not seems to be the right sort of goal.

I think your goals should be a certain net worth or income stream by a certain date.

We do have a more comprehensive goal/strategy. I just didn't want to bog everyone down in the details. The goal of 5million in gross assets is what will get us to the income stream etc. that we want/need.

Thanks for your input (!) though it has brought me back to the core of what we are trying to achieve... which means a conversation with hubby about how buying/not buying in sydney vs. other places will get us to our goal.
 
A 5 million dollar gross asset goal doesn't really sound like it reflects your investing performance and success.
To me it sounds like a liability.
Personally I would be focusing on the income stream as the goal and as you have suggested you will most likely finish with 5 million in gross assets as a result.
 
5 mil in gross is fine as long as it is an interim goal. I used to freak people out by telling them my debt goals. As a 22 yr old I told people I wanted to OWE 1 mill by 25. I got there but it was kind of irrelevant and just a step on the way but nothing wrong with different ways to describe goals, and also focussing on the process is good to not just the destination.

And everyone who is in Sydney feels comfortable with Sydney. I used to, I grew up there. Just need to realise this is a big country with lots of other desirable areas and its not the only market, even though its the biggest. Anything with a diverse region for existance within a few hours of Sydney will catch the ripple (most of it already is) from this boom as it does every cycle, Bris/SEQ has lots going for it and is affordable, and there are major regionals worth a look for some players too. Opportunity is everywhere, you just need to learn how to see it.
 
Appreciate all the comments - linking it back to our goals has given us some discussion topics to try and help us make the decision about what we do next.
 
I like investing in NSW/Sydney because it is where I feel comfortable investing.

There are many people who can help in your search and managing the properties outside your immediate area - BAs for buying, interviewing many PMs for managing and always the SS community!
 
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