Possibly ripple effect out from Lathlain thats gone gangbusters in recent times.
where is the bargains in Perth
- Thread starter MJD
- Start date
Who said Lathlain is not a good place to buy?
The Sunday West newspaper, bless 'em.
I was a bit surprised as Lathlain is 4km from CBD, close to rail, road, river and shopping.
I also agree the values may have been artificially inflated recently. I think as very few properties get sold here it is difficult to accurately gauge the area for valuation purposes.
Give it a year or 3 and she'll be apples.
This continues to be an interesting thread, i'm stuck in the same dilemma... want to get a first IP but realistically looking at a few years -ve CF on a Perth Metro property... putting it off and in the meantime doing nothing.
I dont know which is worse...? I suspect nothing.
So what is the first time investor to do? Realistically?
Karratha? I dont think so... too high value and i perceive the risk to be too great. Office space? Really...? There's a LOT of vacant offices at the moment...? The borrowing terms are pretty restrictive.
So come on HiEquity and Ausprop... you have maybe $80- 100K cash saved (and this is ALL your cash) and want to buy your first income producing asset, probably around the $400K mark, what would you do?
Cheers, Sam
I dont know which is worse...? I suspect nothing.
So what is the first time investor to do? Realistically?
Karratha? I dont think so... too high value and i perceive the risk to be too great. Office space? Really...? There's a LOT of vacant offices at the moment...? The borrowing terms are pretty restrictive.
So come on HiEquity and Ausprop... you have maybe $80- 100K cash saved (and this is ALL your cash) and want to buy your first income producing asset, probably around the $400K mark, what would you do?
Cheers, Sam
With access to that sort of cash, Id be looking for a nice 2 or 3 bed townhouse around Tuart Hill, Dianella, Yokine, Glendalough, Joondanna etc. Can't go wrong there, although I suspect yields won't be all that great at the start. I don't think it would be wise to buy anything more expensive/bigger as a first IP at this stage.
My first IP (although it was a PPOR for the first 4 years) was exactly this. Made impressive capital gains over 4 years and formed an excellent springboard for my next (current) project.
My first IP (although it was a PPOR for the first 4 years) was exactly this. Made impressive capital gains over 4 years and formed an excellent springboard for my next (current) project.
Some would suggest that Karratha, Port Headland ond soon Onslow to have considerably lower risk than other places....Provided the infrastructure and investments / jobs remain in the area. From what the papers suggest, work is basically guaranteed for a long while yet. (considering what you read out of the WA papers)..........but we know how good some jounalists are don't we!!
I agree that house prices are v high. If the same dollar value was used to buy a house where I live, it would be something special!!
Cheers,
F
As a first time investor i'm principally interested in yield at this stage, to get me up and running. What yields have you experienced in those areas?
Holding out for Ausprop, HiEquity and other experienced investors to put themselves mentally back in the starting blocks and advise....
Holding out for Ausprop, HiEquity and other experienced investors to put themselves mentally back in the starting blocks and advise....
As a first time investor i'm principally interested in yield at this stage, to get me up and running. What yields have you experienced in those areas?
Holding out for Ausprop, HiEquity and other experienced investors to put themselves mentally back in the starting blocks and advise....
well, for a $350k 2 bed place you are probably looking at $300pw, slightly more for a newer place, given the economy as it is now, which is approx 4.4%. I'd expect rents to rise toward the end of the year. Yield was better when the places were fetching $270pw at a value of high $200k obviously.
Samwise - there are too many unknowns for your situation. Do you have a PPOR? What's your income level? What's your appetite for risk? age? etc etc etc Note I'm not looking for you to answer these questions - just pointing out that asking for specific investment advice from some bloke/s on an internet forum probably ain't such a good idea!
Regarding Karratha, I don't perceive it to be any more risky than Perth - particularly with the yields where they are providing quite adequate compensation. Regarding empty office space - really?? How empty? And where? Which offices? You need to know the specific answers to these questions before writing off the asset class. Again, the yields should more than compensate you for this "risk". If they don't then don't purchase - simple.
A Karratha property will give you 80%LVR (at least) while the office space around 60%, so you can get twice the exposure in Karratha. The fact that the big lenders will give you the same LVR in Karratha as in Perth should tell you something about the risk... and there are still properties (sometimes) for sale there in your price range (just).
Where would I invest if I was starting out now? Same place I just did invest... but obviously I'm just ramping Karratha!
Regarding Karratha, I don't perceive it to be any more risky than Perth - particularly with the yields where they are providing quite adequate compensation. Regarding empty office space - really?? How empty? And where? Which offices? You need to know the specific answers to these questions before writing off the asset class. Again, the yields should more than compensate you for this "risk". If they don't then don't purchase - simple.
A Karratha property will give you 80%LVR (at least) while the office space around 60%, so you can get twice the exposure in Karratha. The fact that the big lenders will give you the same LVR in Karratha as in Perth should tell you something about the risk... and there are still properties (sometimes) for sale there in your price range (just).
Where would I invest if I was starting out now? Same place I just did invest... but obviously I'm just ramping Karratha!
agree that we would need to know more specifics. PPOR gains are tax free... so when starting out a goodway to get ahead is developing your own PPOR and picking up tax free dev margin. imagine doing that in karratha....
having seen many paths travelled I like the look of dazzlings/tpfkad still. this GFC has shaken out a lot of the neg geared portfolios and exposed them for what they are.
i started out on bog standard neg geared properties that grew in value. would i have that same confidence of success now?i honestly dont know.
having seen many paths travelled I like the look of dazzlings/tpfkad still. this GFC has shaken out a lot of the neg geared portfolios and exposed them for what they are.
i started out on bog standard neg geared properties that grew in value. would i have that same confidence of success now?i honestly dont know.
OK my situation (as an example) is I have a PPoR that is valued at $700K. I can access $100K in equity and have a further $100K cash... but i'd rather leave some cash for a buffer. So i'm willing to invest $100K (ish) now.
Combined income over $200K but down to single income of $100K+ because wife on maternity leave for most of this year. She will return to work.
We look to trade up our PPoR from $700K to about $1.2m when wifes salary returns and this is affordable... this is one of our short term (2-4yr) financial/ lifestyle goals. Long term goal is to acquire an investment portfolio which allows us to retire as early as possible and travel.
Given this scenario and current conditions, the first actions I should take which would set us on the path to achieving these goals, in your opinion, would be.... [insert suggestions here]
Combined income over $200K but down to single income of $100K+ because wife on maternity leave for most of this year. She will return to work.
We look to trade up our PPoR from $700K to about $1.2m when wifes salary returns and this is affordable... this is one of our short term (2-4yr) financial/ lifestyle goals. Long term goal is to acquire an investment portfolio which allows us to retire as early as possible and travel.
Given this scenario and current conditions, the first actions I should take which would set us on the path to achieving these goals, in your opinion, would be.... [insert suggestions here]
OK my situation (as an example) is I have a PPoR that is valued at $700K. I can access $100K in equity and have a further $100K cash... but i'd rather leave some cash for a buffer. So i'm willing to invest $100K (ish) now.
Combined income over $200K but down to single income of $100K+ because wife on maternity leave for most of this year. She will return to work.
We look to trade up our PPoR from $700K to about $1.2m when wifes salary returns and this is affordable... this is one of our short term (2-4yr) financial/ lifestyle goals. Long term goal is to acquire an investment portfolio which allows us to retire as early as possible and travel.
Given this scenario and current conditions, the first actions I should take which would set us on the path to achieving these goals, in your opinion, would be.... [insert suggestions here]
Every one is to there own......but I would.............
Your long term goal I would action immediately, in order to realise my PPOR upgrade in a few years time to a $1.2m and would also be in a position to retire earlier (i.e. time in the market as opposed to timing the market.) The upgraded PPOR could still be achievable in 5 years by getting started in PI now!
I would stay living in the $700,000 PPOR (as I would expect it to be quite comfortable) provided that it is a comfortable place in raising a youngin and get set on the path to achieving goals immediately by searching and buying investment properties.
As suggested though, everyone considers different priorities in life.
Cheers,
F
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Given this scenario and current conditions, the first actions I should take which would set us on the path to achieving these goals, in your opinion, would be.... [insert suggestions here]
I can only suggest moves that would improve your financial situation. These would include:
- Renting out your PPOR to make the interest on that loan tax deductible
- Also, renting a suitable house to give you the $1.2m property lifestyle won't cost much by comparison.
- Leveraging the $200k you have at your disposal into a circa $800k positive cash flow property / portfolio asap. I have already suggested options here but there are others around if you look (very) hard. This will leave a small but should be adequate surplus of funds / cash for a rainy day.
- Invest the surplus in the share market with a small / judicious margin loan to get some more exposure and experience.
That's what I would do but my focus starting at that level would be to get as big as possible as quick as possible. The only way to do that is by taking risks and the reality is that at this point you don't have an awful lot to lose so this should be the time to take the most risk - once you get bigger you don't need to take the same risks and those expensive properties out there start to look more affordable.
It all depends on how much you value your financial independence compared to the other aspects of your life ATM...
H.E. speaks genius! Also look at your SMSF position and salary sacrifice into it if appropriate. ensure life insurances adequate, PoA and will up to date. Invest using asset protected structures. Crack a really nice bottle of red just for the hell of it.... when you are CF+ it's just a waiting game
Food for thought... funny because one of my first thoughts (and posts) when i joined this forum was regarding whether i should rent out our PPoR and live in a rental ourselves (so that we could invest). Its a tough one...
This is where lifestyle comes into it, because living in and owning a $1.2m property is not the same as just renting one... For e.g. no security of tenancy, no ability to grow and individualise and modify the property... this approach seems too... i dont know, mercinary, to me... putting wealth (for wealths sake) above day to day happiness.
At the moment i recognise that our LVR (at 50%) is too low and we need to start leveraging... probably into an IP now but only to an LVR that still allows us the chance of upgrading our PPoR in a year or two when my wifes salary returns.
This is where lifestyle comes into it, because living in and owning a $1.2m property is not the same as just renting one... For e.g. no security of tenancy, no ability to grow and individualise and modify the property... this approach seems too... i dont know, mercinary, to me... putting wealth (for wealths sake) above day to day happiness.
At the moment i recognise that our LVR (at 50%) is too low and we need to start leveraging... probably into an IP now but only to an LVR that still allows us the chance of upgrading our PPoR in a year or two when my wifes salary returns.
SMSF
Self Managed Super Fund...? Guess...PoA
Price of Apples...? Sorry Asset protected structures
.... ummm, anybody want a cuppa? SMSF
PoA
Asset protected structures
sorry!
yes self mgd super.
EVERYONE should have a current enduring power of attorney and a will.
asset protected structures...always boring stuff (like insurance) until the need arises.
It looked that way to me too so I also followed the safe road trying to invest while holding non-deductible debt and living in "my own" house. However, I know others who were more mercenary about it and they don't have to work anymore - the power of compounding kicked in that much earlier to them due to the bigger exposure they were able to safely acquire earlier as well as their better cashflow in the meantime. A slightly bigger snowball now means a MUCH bigger snowball in ten year's time (eg an order of magnitude quite easily) due to the power of compound interest - don't underestimate that effect.
As for me, I have just gone down to four days a week this year to spend more time with the kids so it's not all bad...
