What are reasons why you bought what you bought?

[CairnsInvestor]

Why do consider building is better than buying or vice versa? Houses vs Units vs Commercial/Industrial vs Development sites?

What are reasons why you bought what you bought? For example, if you had $500,000 to invest, what would you buy? Established house, unit, commercial property (offices, industrial shed, etc), small development site, or build?

 

[alexlee]

Now, MY piece of string is like this...........

 

[The Y-man]

I bought units because they were the ones I could afford easliy when I started. This allowed geographical spread, vacancy risk spread, as well as slightly better cashflow.

Cheers,

The Y-man

 

[MichaelW]

I bought a house that is on a development site, which one do I vote for?... I voted the latter as that was my primary intent. The house was a bonus as it generates income today and allows negative gearing.

Cheers,
Michael.

 

[steveadl]

At first I bought a 'shiny new house' that wouldn't have any problems because it was all new to me.

Now a few years down the track, I'm focusing on buying development blocks (same as Michael - with house on it for above mentioned benefits). In fact, right now, assuming it comes through - I'll be selling the first 'shiny new' IP I bought to secure the current deal I'm looking at.

Having said that - I don't regret buying the 1st IP. It enabled me to go further, and I wouldn't be in the position I am now without it. But as I learn more, and grow as an investor rolleyes: ) my personal focus/direction has changed.

 

[Novar]

I bought units because they were the ones I could afford easliy when I started. This allowed geographical spread, vacancy risk spread, as well as slightly better cashflow.

Cheers,

The Y-man

I agree
I like units because they are cheap to rent even for people on low income.
I can have lots of small cherry tomatoes as opposed to one big tomato.
........ easier to sell off in chunks if need be.

 

[ianvestor]

I bought a house that is on a development site, which one do I vote for?... I voted the latter as that was my primary intent. The house was a bonus as it generates income today and allows negative gearing.

Cheers,
Michael.

Was thinking the same thing... I don't get this poll so I'll just vote in my post instead:

Buy development sites
Build townhouses

Of course that's my aim, but when I was starting out I just grabbed what I could... starting with a 1 bedroom unit, then a 2 bedder, then small house, etc.

 

[Rob Williams]

I bought units within 5-7Km of the CBD.
Allows me to spread risk among various suburbs.
Affordability criteria. In the Blue Chip suburbs, there will always be more people able to afford a $250k unit than a $750k house. This will always be the case in such areas. This brings about quite a bit of pressure on prices when demand is strong.
Less downtime between tenants as more demand for units at $230 pw compared to houses in same area for many hundreds $$ per week.
I can sell bad performers in small chunks or sell one if I run into trouble, while retaining the bulk of the portfolio.
All mine have a high land component in the group and there own private yards.
The Body Corporate looks after many of the issues that I would otherwise look after if I owned a stand alone house. Yeah, I pay for it, but I've got enough to do being my own PM.
That's my theory on dinosaurs

 

[GoAnna!]

I think you have asked this poll from the perspective of how you view investments yourself. I am more strategy focused rather property description focused so i have no idea how to answer your poll And I love answering poles .

I have bought from pretty much each choice but for different reasons. For me its more about the money in the deal than the deal itself.

 

[CairnsInvestor]

Was thinking the same thing... I don't get this poll so I'll just vote in my post instead:

Buy development sites
Build townhouses

Of course that's my aim, but when I was starting out I just grabbed what I could... starting with a 1 bedroom unit, then a 2 bedder, then small house, etc.

Well investors do buy development sites for the reason for just buying, getting DA & then onselling to a buyer to develop themselves.

 

[alexlee]

Without also knowing the experience level and resources the voter has access to, the results aren't that useful. In any case, most investors start with cheaper properties and change the type of property they buy as their resources grow. That doesn't mean it's 'better' for someone starting out to jump to the second stage because they may not have the resources to do so.

Personally, I have a mix of townhouses, units and houses. My next one will probably be a house, but I'm not going to pass up a unit if I think it's a bargain. So what do I prefer? I'll know it when I see it.
Alex

 

[ianvestor]

Well investors do buy development sites for the reason for just buying, getting DA & then onselling to a buyer to develop themselves.

Okay so I just voted 'build units'. It seems like the closest match to my preference... although obviously I have to buy development sites in order to build... which could mean buying houses... so there's 3 poll options I could have picked.

Hangon, when you say 'buy development sites', do you mean sites which already have approval? I took it to mean any site which could potentially be developed after gaining approval.

Anyway, I'm surprised no one else has voted 'build units' so far.

 

[skater]

When we started, we bought cheap cf+ homes & a block of strata units, in a varity of locations, because that was all we could afford. As things progressed, we bought some closer to home that were good value at the time. Our PPOR we bought because it had another 3bed home at the rear & was only a little more expensive than stand alone homes in the area. We bought this in a cheap suburb to allow for the rather expensive sport we pursue.

 

[Kristine..]

Well, CairnsInvestor

This poll is a bit of a problem.

Why did I buy what I bought?

Are we talking about the house I bought in in 1994 which I can now knock down (except it's too good to knock down) and build three townhouses instead, or

The old house which I completely renovated and also subdivided the land, or

The commercial (retail) properties where I can build offices or apartments on the second storey, or

The unit in the block which presents the opportunity to buy up the whole lot over time, and then maybe knock the 1960s concrete bunkers down and build two storey townhouses, or

The bomb site which couldn't be subdivided but which now can, and can now fit a mansion incorporating three townhouses, or

The vacant block on which I built the exec rental, or

etc etc etc

Essentially, I buy the deal. Sometimes, I buy on a whim. Well, mostly I buy on a whim. You never know if you don't have a go.

I always wanted to own a block of flats. As a child, flats were the height of sophistication for me. Now that single person households are the fastest growing category of household, flats are back on the housing agenda regardless of the age of the occupier.

And flats don't get possums and require minimal maintenance.

I haven't bought a factory yet, but why should Daz have all the fun? A big shed sounds like a great idea. Maybe I'll get around to it after I do the Mansion House.

For the serious investor, versatility is half the success. Just buy it, throw it in the bag and get on with the next one. That'll do me.

Cheers
Kristine

 

[kathryn d]

Not sure how to vote on this either.
First property was a mobile home,
second was an 11 unit family building,
third was a house,
fourth was a house,
fifth was a furnished mobile,
sixth was a huge house we renovated into 11 bachelor suites,
seventh is family venture into a 5 unit building to live in
eigth is turning our PPOR into a rental.

At the moment we think we will buy houses for the purpose of "Rent to Own". All the benefits and no maintenace or repairs.

 

[Rixter]

I buy what I buy because it fits into my CGA investment strategy that is my chose vehicle to get me from A to B over my designated time frame.

Hope this helps.

 

[Gatoblanco]

I buy what I buy because it fits into my CGA investment strategy that is my chose vehicle to get me from A to B over my designated time frame.

Hope this helps.

Rixster buys villas/townhouses as part of his strategy. I am wondering myself for when I buy my second IP in the future whether or not to get a townhouse closer to town (which has good capital gains because of proximity to CBD) or
buy a house further out (which has not so good capital gains because of the suburb's distance from the CBD but because it has its own land, has relatively better capital gains because of the land component.)
I see townhouses/villas are popular on this forum. I want to do more research into proximity to CBD vs house further out issue. Superficially villas/thouses appear a good compromise because they have some yard. Maintainence issues are less too.
I notice so far the poll is overwhelmingly for houses. I wonder if this results is skewed by PPORs?

 

[alexlee]

I'm not convinced that outer suburbs have lower growth long term than inner suburbs. Inner suburbs are usually more expensive: that doesn't mean they GROW faster because they would have had higher purchase prices too. Over a reasonable period (say, 15 years) an outer suburb BECOMES a mid-ring suburb, and a mid-ring suburb BECOMES an inner suburb. Your current inner suburbs would have been considered mid ring 15 years ago.

Does that mean a given house accelerates in terms of growth as it 'shifts' rings?
Alex

 

[ianvestor]

Gatoblanco, the best way to work out which is better is to calculate the % value of the land component for each property compared to the purchase price.

eg.

Townhouse near CBD: $500,000, in a block of 5 on 800sqm:
$350,000 land (160sqm near CBD)
$150,000 building
Land value percentage: 70%

House in outer suburb: $500,000:
$250,000 land (600sqm in outer suburb)
$250,000 building
Land value percentage: 50%

Then again, you might be able to get a run-down house on 800sqm for the same money which would have a greater land component as a percentage of the purchase price.

 

[alexlee]

Doesn't the future redevelopment potential of the outer suburb block change the calc?
Alex