Investment property

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Lyyynnnchy said:
Completely agree. Not suitable for a novice though
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Why do you think it's not suitable for a novice? I own both resi and commercial property. My approach to buying is quite similar except admittedly I did use a BA for the resi because it was my first purchase and the first purchase is arguably the most important. If you **** it up you're financially hamstrung.
 
The Edukator said:
Why do you think it's not suitable for a novice? I own both resi and commercial property. My approach to buying is quite similar except admittedly I did use a BA for the resi because it was my first purchase and the first purchase is arguably the most important. If you fu** it up you're financially hamstrung.
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Simple in that if you fu** a commercial property purchase it can be worth next to nothing. Typically if you have a bit of a lemon of a resi purchase you can still generally get out with something

Novice investors are unlikely to know much about incentives, make goods, options, fit out contributions, net leases, gross leases, semi gross leases, outgoings, paying for cpi increases over and above outgoings etc
 

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Lyyynnnchy said:
Simple in that if you fu** a commercial property purchase it can be worth next to nothing. Typically if you have a bit of a lemon of a resi purchase you can still generally get out with something

Novice investors are unlikely to know much about incentives, make goods, options, fit out contributions, net leases, gross leases, semi gross leases, outgoings, paying for cpi increases over and above outgoings etc
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Dno, maybe it's just me but none of those concepts are particularly difficult to understand.
 
The Edukator said:
Dno, maybe it's just me but none of those concepts are particularly difficult to understand.
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I'm thinking from the perspective of someone in their mid 20s with a $50-$100k deposit and some rich dad, poor dad reading behind them. They're not in a position to invest in commercial IMO. Better off buying some resi while learning about commercial and hopefully by the time they're ready they'll have some equity behind them to invest in commercial

I'm looking at potentially buying this atm - https://www.commercialrealestate.com.au/property/43-avalon-parade-avalon-beach-nsw-2107-13278046

Risky purchase with vacant possession and in current environment but I have some ideas
 
Lyyynnnchy said:
I'm thinking from the perspective of someone in their mid 20s with a $50-$100k deposit and some rich dad, poor dad reading behind them. They're not in a position to invest in commercial IMO. Better off buying some resi while learning about commercial and hopefully by the time they're ready they'll have some equity behind them to invest in commercial
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I think this is good advice for any investment property purchase, I'm not sure if only applies to commercial real estate. All real estate is very hard to make cashflow positive initially and if you're reliant on contractors for upkeep it can be a losing battle.

Real estate is always local, rates of returns can differ from suburb to suburb and city to city. Generally speaking, I thought commercial real estate had a better rate of return.

One thing about commercial real estate in Europe / North America I like the option to buy residential and commercial spaces in the same building. The main floor, for example, is retail and top floor is an apartment. I'd take a residential/commercial mix property over a purely commercial or purely residential property.
 
sabre_ac said:
I think this is good advice for any investment property purchase, I'm not sure if only applies to commercial real estate. All real estate is very hard to make cashflow positive initially and if you're reliant on contractors for upkeep it can be a losing battle.

Real estate is always local, rates of returns can differ from suburb to suburb and city to city. Generally speaking, I thought commercial real estate had a better rate of return.

One thing about commercial real estate in Europe / North America I like the option to buy residential and commercial spaces in the same building. The main floor, for example, is retail and top floor is an apartment. I'd take a residential/commercial mix property over a purely commercial or purely residential property.
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I also like this and it can certainly reap benefits in the future also

I work for a developer and we're having to offer $10m for a single shop with 2 units above when the owners purchased it for $2.3m only 3 years ago. The property is within 100m of one of the new Metro stations and will benefit significantly from planning uplift

The same will go for most retail shops with units above. They're usually located within town centres and LEPs for those centres are generally updated every 5 to 10 years to allow increased density around the centre cores

Not only do you benefit from increased yield as you've said above but if you're a long term holder and you've bought well you'll usually benefit from either increased activity or development potential
 
Hi guys,

I have a property dilemma and not sure which direction is the best for me.

Question: do you think it is better to own one $2.5m property to live in (suburb, location, land size, car space, 4 beds plus, double front period home, all tick the boxes) or own one $2m home to live in (does not tick all the boxes) plus one $1m investment property rented out, or own one $1m home to live in (average home) plus another 2 $1m investment properties rented out?

Barring in mind that good A grade homes that tick all the boxes tend to increase more in capital growth compared to smaller properties. Plus I have a dream home.

But having a couple of smaller investment properties will give me rent in helping to pay off mortgages. Plus not all my eggs are in one basket.

I like option two, but I am annoyed that $2m nowadays cannot buy a house that tick all the boxes. Need to spend $2.5m for that. Market has gone gangbusters in last few months.

My situation:

I own my home valued at $1.2m. (3 beds)
I already own one investment property valued at $1.4m, but I still owe 900k on that. (3 beds).
Now, the banks are willing to lend me another $1m.
I make about $150k, wife makes about $60k, plus we get $22k rent from our investment property (negative gearing).

Any investors out there? Any thoughts?
 
Guju said:
Hi guys,

I have a property dilemma and not sure which direction is the best for me.

Question: do you think it is better to own one $2.5m property to live in (suburb, location, land size, car space, 4 beds plus, double front period home, all tick the boxes) or own one $2m home to live in (does not tick all the boxes) plus one $1m investment property rented out, or own one $1m home to live in (average home) plus another 2 $1m investment properties rented out?

Barring in mind that good A grade homes that tick all the boxes tend to increase more in capital growth compared to smaller properties. Plus I have a dream home.

But having a couple of smaller investment properties will give me rent in helping to pay off mortgages. Plus not all my eggs are in one basket.

I like option two, but I am annoyed that $2m nowadays cannot buy a house that tick all the boxes. Need to spend $2.5m for that. Market has gone gangbusters in last few months.

My situation:

I own my home valued at $1.2m. (3 beds)
I already own one investment property valued at $1.4m, but I still owe 900k on that. (3 beds).
Now, the banks are willing to lend me another $1m.
I make about $150k, wife makes about $60k, plus we get $22k rent from our investment property (negative gearing).

Any investors out there? Any thoughts?
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You only need one house. Stop sapping up supply and adding to the housing affordability crisis, that less fortunate people face.
 
Deliverance said:
You only need one house. Stop sapping up supply and adding to the housing affordability crisis, that less fortunate people face.
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My apologies if I had caused any angst.

This is a genuine dilemma of mine. I will be taking up a significant risk as the new loan repayments have not been felt yet. Hence, my choice must be the right one as I would be stuck with it.

I do work long hours and usually 6 days a week. And I do most of the renovations by myself on days off to save money. Plus my wife is extremely frugal.
 
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Guju said:
Hi guys,

I have a property dilemma and not sure which direction is the best for me.

Question: do you think it is better to own one $2.5m property to live in (suburb, location, land size, car space, 4 beds plus, double front period home, all tick the boxes) or own one $2m home to live in (does not tick all the boxes) plus one $1m investment property rented out, or own one $1m home to live in (average home) plus another 2 $1m investment properties rented out?

Barring in mind that good A grade homes that tick all the boxes tend to increase more in capital growth compared to smaller properties. Plus I have a dream home.

But having a couple of smaller investment properties will give me rent in helping to pay off mortgages. Plus not all my eggs are in one basket.

I like option two, but I am annoyed that $2m nowadays cannot buy a house that tick all the boxes. Need to spend $2.5m for that. Market has gone gangbusters in last few months.

My situation:

I own my home valued at $1.2m. (3 beds)
I already own one investment property valued at $1.4m, but I still owe 900k on that. (3 beds).
Now, the banks are willing to lend me another $1m.
I make about $150k, wife makes about $60k, plus we get $22k rent from our investment property (negative gearing).

Any investors out there? Any thoughts?
Click to expand...
One plus two extra. And all three in different states
 
Guju said:
My apologies if I had caused any angst.

This is a genuine dilemma of mine. I will be taking up a significant risk as the new loan repayments have not been felt yet. Hence, my choice must be the right one as I would be stuck with it.

I do work long hours and usually 6 days a week. And I do most of the renovations by myself on days off to save money. Plus my wife is extremely frugal.
Click to expand...
No angst here mate. I'm a debt free home owner who works part time. Have experienced my fair share of deaths of people close to me in the last decade and learned from their mistakes.
In relation to your question. Nobody, on their death bed looks back on their lives and wishes they spent more time working. You only get one shot at life, don't waste it working 6 days a week. Enjoy your life with your wife.
Watch from the 1 minute mark.

 
Deliverance said:
No angst here mate. I'm a debt free home owner who works part time. Have experienced my fair share of deaths of people close to me in the last decade and learned from their mistakes.
In relation to your question. Nobody, on their death bed looks back on their lives and wishes they spent more time working. You only get one shot at life, don't waste it working 6 days a week. Enjoy your life with your wife.
Watch from the 1 minute mark.

Click to expand...


lol
 
Guju said:
Hi guys,

I have a property dilemma and not sure which direction is the best for me.

Question: do you think it is better to own one $2.5m property to live in (suburb, location, land size, car space, 4 beds plus, double front period home, all tick the boxes) or own one $2m home to live in (does not tick all the boxes) plus one $1m investment property rented out, or own one $1m home to live in (average home) plus another 2 $1m investment properties rented out?

Barring in mind that good A grade homes that tick all the boxes tend to increase more in capital growth compared to smaller properties. Plus I have a dream home.

But having a couple of smaller investment properties will give me rent in helping to pay off mortgages. Plus not all my eggs are in one basket.

I like option two, but I am annoyed that $2m nowadays cannot buy a house that tick all the boxes. Need to spend $2.5m for that. Market has gone gangbusters in last few months.

My situation:

I own my home valued at $1.2m. (3 beds)
I already own one investment property valued at $1.4m, but I still owe 900k on that. (3 beds).
Now, the banks are willing to lend me another $1m.
I make about $150k, wife makes about $60k, plus we get $22k rent from our investment property (negative gearing).

Any investors out there? Any thoughts?
Click to expand...
Why are you buying such expensive property. You could buy 4 to 5 houses in Adelaide, the rental market is huge and you would pretty much make money hand over fist on each one. Buying an investment property at $1m and working 6 days is bananas.

On SM-N981B using BigFooty.com mobile app
 
With that kind of money id be buying 2-4 smaller houses in different states, rental income will be 1k a week minimum. Before you know it you'll be able to drop a day or 2 week work due to rent
 
Deliverance said:
No angst here mate. I'm a debt free home owner who works part time. Have experienced my fair share of deaths of people close to me in the last decade and learned from their mistakes.
In relation to your question. Nobody, on their death bed looks back on their lives and wishes they spent more time working. You only get one shot at life, don't waste it working 6 days a week. Enjoy your life with your wife.
Watch from the 1 minute mark.

Click to expand...

I appreciate your insights on life. I agree, that spending quality time with family and loved ones is even more important.
 
adelaidecrows said:
Why are you buying such expensive property. You could buy 4 to 5 houses in Adelaide, the rental market is huge and you would pretty much make money hand over fist on each one. Buying an investment property at $1m and working 6 days is bananas.

Hi,

$1m is the average house price in Melbourne nowadays.

I agree, buying several smaller properties would produce better rental yield. But IMHO the capital growth would be less compared to one property in good prime location. My strategy is chasing capital growth, with plans to cash in on next property cycle.

Unfortunately, I have no knowledge of the Adelaide property market. All I know is the Melbourne property market. Even then, I only know sections of it.

I wish to work less days, but the weekend work gives me extra overtime money required to finance my investment strategy.
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burge13 said:
With that kind of money id be buying 2-4 smaller houses in different states, rental income will be 1k a week minimum. Before you know it you'll be able to drop a day or 2 week work due to rent
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I am uncomfortable venturing out of the Melbourne property market, as that is my comfort zone.

I appreciate your suggestions.

It seems, expanding portfolio with several smaller investment properties over owning one grand home is the preferred choice. Thank you all for feedback.
 
I'm not ready to buy yet, but have started to research into commercial property for down the track as maybe a next investment interstate to diversify .

I'm a little unsure of something though, if you go to a site like realcommercial for example, you have the option to either search under "buy" or "invest".

I'm not quite sure what the difference is there?
 
juss said:
I'm not ready to buy yet, but have started to research into commercial property for down the track as maybe a next investment interstate to diversify .

I'm a little unsure of something though, if you go to a site like realcommercial for example, you have the option to either search under "buy" or "invest".

I'm not quite sure what the difference is there?
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hmm, could invest maybe mean you take an interest along with some other investors? like you say you want 25% and if others do and it adds up to 100%, it will work?!? dunno. if that doesnt exist it should! copyright billyray
 
Billy ray said:
hmm, could invest maybe mean you take an interest along with some other investors? like you say you want 25% and if others do and it adds up to 100%, it will work?!? dunno. if that doesnt exist it should! copyright billyray
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Yeh I thought that's what it might be, a % stake in a commercial property with maybe an existing lease/tenant? Perhaps existing owners willing to sell of a percentage of their asset.

Apart from diversification, what do others see as the benefit of commercial property? For me one of the main ones is a hopeful set and forget long term 10 year lease.
 

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