Was this a good investment?

[Empty Pockets]

Just running some figures on a property that we've hit a 4 year anniversary with. Wondering what peoples thoughts are on it's performance. Good, poor or nothing special.

Townhouse purchased 2007 in western sydney.

Purchase $225,500
Rent at purchase $230pw
Strata at purchase $320pq

Current Value $310,000-$320,000
Current rent $340pw
Current Strata $350pq

Was purchased with 100% lend plus costs. Is still neg geared between $6000-$7000 before depreciation which is about $3000.

No tenant issues, longest vacancy was 1 week. Total spent on repairs is $900.

EP

 

[Peter Parker]

Just running some figures on a property that we've hit a 4 year anniversary with. Wondering what peoples thoughts are on it's performance. Good, poor or nothing special.

At purchase the body corporate was expensive relative to rent, but that figure's improved over time.

It's grown in value by much more than what's been lost in -ve cashflow.

It should become neutrally geared and then CF+ in (say) 5 years of CPI rent increases.

There's areas that have done better and a lot that have done worse. You started with a 5% gross yield which is better than what others have started with (<4%).

Provided it appreciates by more than about 1.5% pa it will outstrip your negative gearing losses.

Overall it looks pretty good.

 

[Propertunity]

I'd have to agree with Spidy. You made $100K in just 4 years for not much out-of-pocket (especially after tax). ....and all this during a period where the world's economy went thru a GFC.

If you are looking for ppl to beat up on you, then OK, you should have bought a few more at the time

 

[Monopoly]

Just running some figures on a property that we've hit a 4 year anniversary with. Wondering what peoples thoughts are on it's performance. Good, poor or nothing special.

Townhouse purchased 2007 in western sydney.

Purchase $225,500
Rent at purchase $230pw
Strata at purchase $320pq

Current Value $310,000-$320,000
Current rent $340pw
Current Strata $350pq

Was purchased with 100% lend plus costs. Is still neg geared between $6000-$7000 before depreciation which is about $3000.

No tenant issues, longest vacancy was 1 week. Total spent on repairs is $900.

EP

And you need to ask??????????

Questions like this always make me laugh, what did you expect people to say, "oh no that's terrible, I'd have expected the property and rent to both have doubled by now; this is just completely unacceptable!!!"

Seriously....

 

[Belbo]

Hey, Monopoly, that wasn't too helpful of you.

Let's give the dude a break here, and see if we can offer a bit of constructive feedback to EP, as you yourself often seem to suggest we should try to do with people genuine about making a go of property investing.

Looks to me like you've made a handsome bit of equity there, EP.

Now, you could look at your success on this venture and call it luck, or you could say it's the result of a well-worked out plan.

Of course, we can't read the future for capital gains on any particular investment with certainty, so it's always a bit of both, I reckon.

I expect that being cash flow negative to the tune of about $3K a year after tax hasn't been without its privations for you, but I'm sure you're not sorry now to have worn them.

The interesting question is though, how do you feel about trying your hand at another one?

You've got a good chunk of equity to draw on for a deposit, and with careful research you should be able to find something in your budget close to CF neutral, so why not do it all over again?

Of course, there's the argument that median property prices are set to slide for a while (or even plummet!), but medians don't tell the whole story, and my own crystal ball's not convincing me of this case for pessimism either.

What are your plans, if you don't mind me asking, EP?

 

[Monopoly]

Hey, Monopoly, that wasn't too helpful of you.

Let's give the dude a break here, and see if we can offer a bit of constructive feedback to EP, as you yourself often seem to suggest we should try to do with people genuine about making a go of property investing.

Looks to me like you've made a handsome bit of equity there, EP.

Now, you could look at your success on this venture and call it luck, or you could say it's the result of a well-worked out plan.

Of course, we can't read the future for capital gains on any particular investment with certainty, so it's always a bit of both, I reckon.

I expect that being cash flow negative to the tune of about $3K a year after tax hasn't been without its privations for you, but I'm sure you're not sorry now to have worn them.

The interesting question is though, how do you feel about trying your hand at another one?

Fair point Belbo, and okay I've been shamed into it.... apologies EP but you gotta admit a blind man could see that it was a worthwhile investment, I mean the growth in both capital and yield are (as Belbo said) undeniably very handsome.

And also as he suggested maybe you now need ask yourself, would I consider taking on another given this outcome? Though it's not a simple yes or no answer; there are many factors to take into consideration.

Okay, I've said my bit, go for it....I deserve the spanking for taking a cheap shot at your call for a pat on the back. You do deserve the applause, well at least for your efforts; well done!!

 

[Empty Pockets]

No offence taken monopoly.

No one here seems to post any of their numbers apart from nathan so I thought I would throw some out there. Views are varied on the forum so while a blind man, you and me can see a good gain, this might not be the thoughts of someone else.

The gain is unrealised so while it makes me warm and fuzzy, I recognise it can go down or go nowhere for a number of years. Will be interesting to see what happens over the next four years. I was hoping it would be cash flow neutral by next year but that is looking unlikely.

Belbo - yes will be purchasing again this year in the sunshine state.

 

[Monopoly]

No offence taken monopoly.

I'm glad, absolutely none was intended; I was just teasing!

No one here seems to post any of their numbers apart from nathan so I thought I would throw some out there. Views are varied on the forum so while a blind man, you and me can see a good gain, this might not be the thoughts of someone else.

That's true, but there's definitely no doubt that you did your sums on this deal, and it's paid off well.

Glad to it help give you the confidence needed to see you going back for a second go; that's great. Keep up the good work, you'll do very nicely I'm sure.

 

[Belbo]

No doubt, EP.

You'd be much further ahead by now if you'd been into currencies, oops CFDs, doh! rare earths, or was that gold? No, wait! Silver. Hold the presses: currencies!

 

[Nathan]

Congrats EP for earning in equity from 1 property $25,000pa over 4 years. Some would say its around the average wage annually for the area. Never the less if you had bought 10 of these that would have been $250,000 in equity pa you would have earnt

Good work, and decent buy. I wouldnt have bought it to start with, but it has worked for you. Moving forward maybe look at numbers closer to your PP and rents closer to today. This will ensure you can move quicker with less burden on cashflow and lifestyle.

Congratulations.

 

[RealBus]

Firstly well done on a successful purchase, got in at the right time and place interested to findout which suburb delivered the performance as I've purchased in Liverpool unfortunatley with substandard results from the unit ?

 

[oracle]

I was hoping it would be cash flow neutral by next year but that is looking unlikely.

May be if you fix your rates for 5 years with a 5 in front you might just make it cashflow neutral.

One of the lesson I learnt from GFC with the low interest rate environment was when 5years rates are at historically low levels lock them in.

Not sure next when we might see it but be prepared to act whenever it does happen.

Cheers,
Oracle.

 

[charlieandkath]

Well done Empty Pockets. You'll have to change your name to Full Pockets.

As others have said, it is where you are going to take it from here. Keep that sort of performance up though and you will be more than successful.