Where to invest - Anywhere in Aus?

Melb will continue to outperform in the long run.

Brisbane for fast money.

Syd is risky.

I would think a bit different:

Both Melbourne and Brisbane for moderate and steady growth and best long term prospects.

Sydney for fast cash , as id think there is about 12-18 months left in that boom.
 
Jerry Parker is just a salesman with a poor disguise

All he rants on about is new products

I wonder why

Only a drongo investor buys new

A pure investor buys for land value
 
I tend to avoid new property for all of the reasons listed by others here.

What I find to be a good 'goldilocks' zone for property though (in regard to depreciation specifically) are those of 5-10 year old vintage.

Why?

Generally speaking, properties of this age have had all their marketing costs and over-inflated 'when brand new'-ness washed out of them. BUT at 5-10 years of age a tax depreciation report is still in it's relative 'prime'. Meaning that if buy say a 6-year old property, you get the best of both worlds for a few years. You'll use these few years to get the property moving into positive cash flow territory via market growth and rental increases.

Like I said, this is a generally observation/personal experience but Goldilocks 5-10 year old properties are worth a look for this reason. :)
 
That's kind of what I meant, except I'm a bit reserved about Brissy in long term.

can I ask why you would be reserved about Brisbane long term? Sure its currently nowhere near Melbourne in terms of non-mining economic strength, but its catching up, whilst still having the large amounts of mining and resources [ commodity prices are currently low but eventually the cycle will reverse and prices will shoot back up like a few years back]. Plus, the low entry prices mean potentially higher gains to be had, all the while delivering stronger than mel or even Sydney rental yields.
This to me sounds like Brisbane offers better percentage gains - both cg and rental yields- than Melbourne.
Its just not mature like Melbourne, but all the fundamentals are in place and the process of maturing has started.
 
clarification of "pure investor"

Ok Clarification of the "pure investor" comment.

The context of the comment was around claire90"s comments.

Someone who is looking to only invest money. By money I mean both debt and equity(includes cash).

The "pure or passive investor" does not invest time and skill in doing some remodelling, redecorating or refurbishment.

So the cost of funds for a "pure investor", we can call around 5% at the moment. So without any further benefit from the investment , the breakeven rate of capital growth is 5% per annum.

However, the tax benefit of depreciation and interest is a further benefit for the "pure investor" depending on their individual circumstance of course.

This benefit is higher with a new property because of the higher depreciation effects on tax reduction.

An older property you have real depreciation in the actual cash cost of R&M. These costs or outgoing need to be taken into account when considering the overall return on investment (ROI). These costs are are variable and increase over time.

Capital growth is a separate consideration that is periodically estimated with valuations and crystallised when the property is sold. The investor is speculation (gambling) on achieving a capital gain.

To clarify the "pure investor" tag with respect to the above backdrop. The differentiation.

Pure (passive) investors- seeking to maximise after tax returns from the property both rental and capital growth

Speculator- betting on capital growth only

Developer/refurbisher- seeking to manufacture value by adding extra resources that produce higher returns. This carries time/development /refurbishment risk that I usually calculate at 20%. The risk is real thus need to become part of the ROI.


I appreciate that many investors on this forum are a combination of the three.

However I thought Claire90 was talking about more of a passive property investment by adding her equity only to develop returns and not so much a combination of the three.

For the pure or passive investor important value is created by on of the unique features of property that shares do not have. That is intrinsic value. Every property is in a unique location. Whether a growing area, a corner allotment, a view between buildings, a great spot in a unit development, near a new hospital, walking distance to a great school, Pure Investors can take advantage of this intrinsic value propositions and buy quality properties that create value in capital growth and increased liquidity.

When property quality & location selection is done well, it exceeds that risk weighted developer/refurbisher investment model. Especially if time is your most valuable asset.

So once you have built your team around your tax position, your debt costs & strategy. The pure investor needs data on locations to invest in. Where are large investments going that will support my smaller investments, where do people really want to live, where do they work? I'll save this "location subject" for another time.

If anyone would like to discuss further Its OK to PM me and Ill get back.

I hope this clarified this "pure investor" comment that was confusing. "passive" investor would have been a better word I think.

And yes I have been a professional investment property advisor since 1995.

Cheers,

Jerry Parker
 
I tend to avoid new property for all of the reasons listed by others here.

What I find to be a good 'goldilocks' zone for property though (in regard to depreciation specifically) are those of 5-10 year old vintage.

Why?

Generally speaking, properties of this age have had all their marketing costs and over-inflated 'when brand new'-ness washed out of them. BUT at 5-10 years of age a tax depreciation report is still in it's relative 'prime'. Meaning that if buy say a 6-year old property, you get the best of both worlds for a few years. You'll use these few years to get the property moving into positive cash flow territory via market growth and rental increases.

Like I said, this is a generally observation/personal experience but Goldilocks 5-10 year old properties are worth a look for this reason. :)

Is there any way of identifying a property's age through normal Internet real estate websites or do you need say an RP Data subscription. I am new here and always intended on buying new or newly new but this post and many others is making me rethink. Thanks.
 
Is there any way of identifying a property's age through normal Internet real estate websites or do you need say an RP Data subscription. I am new here and always intended on buying new or newly new but this post and many others is making me rethink. Thanks.

Sometimes you can tell by the build and fittings. Otherwise, council is a good start.
 
Top