Rixter said:I dont think theres any room left on his back
Rix , given it's Christmas , I'm sure Pitt St can find room for one more
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You have two investment options - which one would you choose?
- Thread starter MarkB
- Start date
Rix , given it's Christmas , I'm sure Pitt St can find room for one more
See Change
Hi All
I went for Option B.
All of my previous investing has been Option A type investments so maybe when I am pretending I can do option b but in real life I still go for 'A'.
Some of the reason I went for option b
I assumed all things were equal then also the return was equal.
If in the current market it is -ve then to hold it I would be looking for a much bigger return in the long run.
I ignored the 5 year horizon as I feel that is to short for property.
I felt that with the bigger cap gain potential for 'b' then it must have a twist and as such still a longer term probability of achieving the gain.
Option 'b' fits my current investment (property and other) portfolio exposure.
No doubt there are other reason but these will do for now.
Cheers
I went for Option B.
All of my previous investing has been Option A type investments so maybe when I am pretending I can do option b but in real life I still go for 'A'.
Some of the reason I went for option b
I assumed all things were equal then also the return was equal.
If in the current market it is -ve then to hold it I would be looking for a much bigger return in the long run.
I ignored the 5 year horizon as I feel that is to short for property.
I felt that with the bigger cap gain potential for 'b' then it must have a twist and as such still a longer term probability of achieving the gain.
Option 'b' fits my current investment (property and other) portfolio exposure.
No doubt there are other reason but these will do for now.
Cheers
Mark (Pitt St), I don't have the time to dig up my stats texts, but the 56% probable average returns are most likely not equal in all respects. In statistics, averaging smooths over and hides the devil's detail. From my foggy memory, confidence intervals will reveal the inequality of the two sets of probabilities.
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Hi all,
I just had to bite here.
There are many differences between the two that from a purely "economic" perception are not visable.
Flexability, as already mentioned, is one of these. If the investor already owned 20+ (pick your own number) IPs, then they may not need any flexability and choose option 2. If the investor had 0 IPs, then the flexability of option one would give peace of mind.
The second point is about future prediction. If anyone tries to present to me that the chance of something happening in the near future is x% then I will question why. To try and show that the chance of something happening in the year after is y% then in the year after that z% will bring about a wry smile. I'll then ask a whole series of questions about predictions for inflation, interest rates etc, and when they are not forthcoming, will wonder out loud about how can you possibly have predictions of such accuracy without some very major underlining assumptions in place?? Of course I will then question the assumptions .
By the way Mark, I voted for option 1 for the flexability, and in the real world a more likely better cashflow.
bye
have a merry christmas and new year everyone.
I just had to bite here.
There are many differences between the two that from a purely "economic" perception are not visable.
Flexability, as already mentioned, is one of these. If the investor already owned 20+ (pick your own number) IPs, then they may not need any flexability and choose option 2. If the investor had 0 IPs, then the flexability of option one would give peace of mind.
The second point is about future prediction. If anyone tries to present to me that the chance of something happening in the near future is x% then I will question why. To try and show that the chance of something happening in the year after is y% then in the year after that z% will bring about a wry smile. I'll then ask a whole series of questions about predictions for inflation, interest rates etc, and when they are not forthcoming, will wonder out loud about how can you possibly have predictions of such accuracy without some very major underlining assumptions in place?? Of course I will then question the assumptions
.By the way Mark, I voted for option 1 for the flexability, and in the real world a more likely better cashflow.
bye
have a merry christmas and new year everyone.
Great Question... 1x$1m or 4x$250k ????????
Great Question... 1x$1m or 4x$250k ????????
For me... it's a simple answer. (But only 20% of us picked this option.)
Answer. I'd just do the $1m property and retain my PPOR exemption.
I make more money... because I make TAX FREE money.
It's a fast track approach and it works extemely well.
I call it the... PPOR home hopping technique. Just keep hopping and keep trading higher. (But make sure you still trade, flip and hold... other stuff.)
- Ross
Great Question... 1x$1m or 4x$250k ????????
For me... it's a simple answer. (But only 20% of us picked this option.)
Answer. I'd just do the $1m property and retain my PPOR exemption.
I make more money... because I make TAX FREE money.
It's a fast track approach and it works extemely well.
I call it the... PPOR home hopping technique. Just keep hopping and keep trading higher. (But make sure you still trade, flip and hold... other stuff.)
- Ross
It seems that most have gone for option A, I voted for option B ... one big place.
Here are some points as to why :
1. Ip @ 250k each are cheap nowadays ... could have low socio-economic type tenant trouble.
2. Cheaper IP for the most part would be harder to differentiate from others in the market.
3. 4 x all the paperwork and everything else.
4. If holding for the long term there is no need to consider one or the other easier to resell.
5. The expensive IP would presumably be on larger and or more sort after land. Thus potential to turn it into 4 x 250k IP later if need be ... develop. In fact developing it would probably net a sum greater than initial whole.
6. Ease in renting or selling really comes down to the specifics of the IP. Thus if the expensive Ip is quality there shouldn't be any trouble renting. Of course this would be true for option A too ... my point is that there are tenants out there paying all levels, quality will rent well at any range.
7. Hell the bigger IP would simply be far more interesting and fun to own.
Mind you if someone would like to donate 4 x 250k IP to my family we'd gladly accept without any complaints.
Here are some points as to why :
1. Ip @ 250k each are cheap nowadays ... could have low socio-economic type tenant trouble.
2. Cheaper IP for the most part would be harder to differentiate from others in the market.
3. 4 x all the paperwork and everything else.
4. If holding for the long term there is no need to consider one or the other easier to resell.
5. The expensive IP would presumably be on larger and or more sort after land. Thus potential to turn it into 4 x 250k IP later if need be ... develop. In fact developing it would probably net a sum greater than initial whole.
6. Ease in renting or selling really comes down to the specifics of the IP. Thus if the expensive Ip is quality there shouldn't be any trouble renting. Of course this would be true for option A too ... my point is that there are tenants out there paying all levels, quality will rent well at any range.
7. Hell the bigger IP would simply be far more interesting and fun to own.
Mind you if someone would like to donate 4 x 250k IP to my family we'd gladly accept without any complaints.
free capital gains
I asked my aussie husband but since we've been in Canada for the last 3 years, he wasn't sure of the answer . I thougt to ask here.
In Canada our PPOR is tax free. Any CG that we make on anything else is taxed at 75%. We used to have $100,000 tax free but they (gov) took that away a few years back.
What is Australia's?
I asked my aussie husband but since we've been in Canada for the last 3 years, he wasn't sure of the answer . I thougt to ask here.
In Canada our PPOR is tax free. Any CG that we make on anything else is taxed at 75%. We used to have $100,000 tax free but they (gov) took that away a few years back.
What is Australia's?
Don't forget that if the tax dpt considers that you are trading rather than investing, (which could be the case if you have a number of properties turning over, even if each one is owned for more than one year) then you don't get the discounted capital gains tax. You get taxed on what you make at your full marginal rate.
Patosan said:
1) A 250K unit, say 3km from Brisbane’s CDB, will get you nice 2bdr, 1 bath that will rent for at least $260pw....I don't see an issue with low socio-economic types at this level....this is out of their league....of course, do our assumptions for low socio-economic match?….you're talking Sydney (?) and I'm talking Brisneyland....apples and oranges maybe....In Brissie, I'm thinking anyone struggling to afford around the $200K mark..…
2) I think it was Geoff Dodige who once said something to the tune of not letting a bad tenant ruin your property investment dreams. Likewise, a bit of extra paperwork is the price I’d be willing to pay for greater yields on 4 smaller priced properties than a single, greater priced property…..5% gross yield x 4 $250K properties OR $3-4% yields x $1mil property…
George
