Upgrading investments...

[SmiTTy2008]

Hi all

I currently have 2 IP's in Sydney west, one apartment and one large block of land with a house on it. My initial plan was to knock down the house, subdivide and build two houses.

Im assessing my options at the moment, and I am considering selling the two IPs and buying an apartment in the city instead. IMHO, city apts seem to hold their value quite well and you also get decent rental returns (apart from strata fees). I'd be looking for an apartment in around the 650-750k mark after selling my other 2.

Just wanted to get peoples opinion on this. Is this a wise idea? I dont feel I am getting (or will be getting) decent capital returns on my current 2 IP's. On top of that, I dont want to commit myself into too much debt and buy 650-750k apartment on top of my existing loans.

Thanks in advanced!! =)

 

[Propertunity]

I currently have 2 IP's in Sydney west, one apartment and one large block of land with a house on it. My initial plan was to knock down the house, subdivide and build two houses.

So what has changed to make you reconsider?

Im assessing my options at the moment, and I am considering selling the two IPs and buying an apartment in the city instead.

I'm not a big fan of selling out of an investment unless it was a mistake (dog). The transaction costs are too high in RE and eat away at profit margins.

IMHO, city apts seem to hold their value quite well and you also get decent rental returns (apart from strata fees).

Is this a Q or have you done enough DD to know this for yourself? I'd tend to disagree on both counts at various parts of the cycle.

I'd be looking for an apartment in around the 650-750k mark after selling my other 2.

Sure OK. Any reason for this price range?

I dont feel I am getting (or will be getting) decent capital returns on my current 2 IP's.

What is the long term trend? These are uncertain times but things like CG always revert to trend. Don't act impulsively and regret selling in 3 + years. I'm not saying "don't ever sell" just be sure before you commit to that path.....and if you know what growth you "will be getting", then you're a better man than I and I'm supposed to be an expert as a BA.

On top of that, I dont want to commit myself into too much debt and buy 650-750k apartment on top of my existing loans.

A fear of debt will stunt your growth! Sure, be afraid enough to research & do DD to make sure you have a top notch investment. But after that take action.

 

[The Y-man]

Im assessing my options at the moment, and I am considering selling the two IPs and buying an apartment in the city instead.

As per Propertunitiy's post - are you sure this is an ugrade? Higher price does not necessarily maketh a better investment.

I own/have owned cbd apartments, surburban apartments, and suburban houses. The CBD apartment is not the best performer by any stretch of the imagination. Rememebr, the higher the price bracket, the less number of potential clients you have....

The Y-man