Reply: 2
From: Simon St John
Interesting post....thanks Watto as I am considering this very question myself, as are others I'm sure in the light of the level of interest, seminars, etc. on the topic
It seems to me it comes down to each individuals resources and their goals.
With buy and hold, even if +ve, there is inevitably going to be a ceiling ont he number of properties one can acquire and hold - there are only so many deposit/establishment costs that can be funded (whether by using cash or equity or a combination).
Wrapping gives you a way to go beyond this ceiling - if that was your aim.
Even then, traditional wrap strategies would still see you hit a ceiling on the number of wrap transaction you can have going at one time.
My impression is that wrapping is one technique in a suite of many that someone who wants to ramp up their property investment activity can use.
It's perhaps not a matter of one strategy only for all people, but a range of strategies for each individual, dependant on circumstances.
Some say wrapping is not really property investing - it's a finance business. As I see it, ANY transaction to do with property is a property investment. If it's true that the key to a successful wrap is buying at the right price in the first place, successful wrapping bears uncanny resemblance to other property strategies.
The way a return is released from a piece of real estate is not the issue, but rather, it is what return you release relative to other investment opportunities foregone.
I wonder what others feel?
Cheers, Simon