We've Done it Again!
- Thread starter Rixter
- Start date
What suburb is that?
Rixter
The following question relates to something I am thinking / exploring / researching currently as I may need to change my wealth building strategy from 'Build and Hold' to Build, Sell & increase frequency of projects to 2 per year even if I build project houses rather than duplexes as pre building approval times for duplexes causes delays and esculates costs.
For each of your properties how much (or not at all, a little bit, a lot) are you subsiding the properties.
Is IP No 1's rent funding its holding costs? I guess IP No 1 has risen in value and so on..
Is Ip No 2 rent funding its holding costs?
Your strategy is buy & hold after paying stamp duty whereas my strategy is build & hold paying interest repayments as we build to ensure built value is higher than cost of building.
Kind Regards
Sheryn
PS
I do not overly concern myself with figures & percentages it is more a gut feeling for me, the market is flat, it will fall a little bit for a while & maybe I can get a better 'deal' on buying, building and selling while market is flat.
The following question relates to something I am thinking / exploring / researching currently as I may need to change my wealth building strategy from 'Build and Hold' to Build, Sell & increase frequency of projects to 2 per year even if I build project houses rather than duplexes as pre building approval times for duplexes causes delays and esculates costs.
For each of your properties how much (or not at all, a little bit, a lot) are you subsiding the properties.
Is IP No 1's rent funding its holding costs? I guess IP No 1 has risen in value and so on..
Is Ip No 2 rent funding its holding costs?
Your strategy is buy & hold after paying stamp duty whereas my strategy is build & hold paying interest repayments as we build to ensure built value is higher than cost of building.
Kind Regards
Sheryn
PS
I do not overly concern myself with figures & percentages it is more a gut feeling for me, the market is flat, it will fall a little bit for a while & maybe I can get a better 'deal' on buying, building and selling while market is flat.
Hi Sheryn,
IP No 1's rent is $14560 p/a. - its mortgage is $5239 p/a. Bought 2000 and its tripled in value from $99k to $300k
IP No 2's rent is $18700 p/a. - its mortgage is $6636 p/a. Bought 2001 and its also tripled in value from $123k to $380k.
From our portfolio's CF perspective earlier purchases basically offset later purchases.
I hope this helps.
Latest Purchase
Hi Rick
I think you have made a very good buy; anywhere within 10 minutes drive to Paramatta will be in a very strong demand going forwards; there is such a large immigration intake settling in that area; especially the Indians and the Chinese which will drive prices up. The jobs in this 2nd CBD of Sydney is fueling all these plus the excellent transport nodes....
i visit the Westfield Paramatta once in a while and am always amazed at the vibrancy and the buzz of the whole area....wish i had bought many years ago tho when prices were "cheap"...
Hi Rick
I think you have made a very good buy; anywhere within 10 minutes drive to Paramatta will be in a very strong demand going forwards; there is such a large immigration intake settling in that area; especially the Indians and the Chinese which will drive prices up. The jobs in this 2nd CBD of Sydney is fueling all these plus the excellent transport nodes....
i visit the Westfield Paramatta once in a while and am always amazed at the vibrancy and the buzz of the whole area....wish i had bought many years ago tho when prices were "cheap"...
Nice one Rick!
I also figured you'd be out that way either Wenty or maybe as far out as St Marys or some such. Good area, good prospects, good yields.
So, $353K yielding 5.5%. Pretty close to my $400K yielding 5% odd estimate...
I'm coming round to the concept of cash flow being king. Once I've finished my Sydney build I might look to diversify future purchases with something in the lower medians with higher yields and just buy more of them. But I do like that with my top end properties I have a lot less tennants to have issues with. My PM deals with it all but the concept of being a slumlord doesn't appeal.
Good work mate, keep at it. In 10 years time it will be worth a touch under a million. And I genuinely believe this to be the case. Some people can't see it, but it will happen.
Big plus for you is you're a stroll to the train station so don't have to rely on crappy Westbus runs along the M2 from North West suburbs. Train is critical in Sydney.
Cheers,
Mike
I also figured you'd be out that way either Wenty or maybe as far out as St Marys or some such. Good area, good prospects, good yields.
So, $353K yielding 5.5%. Pretty close to my $400K yielding 5% odd estimate...
I'm coming round to the concept of cash flow being king. Once I've finished my Sydney build I might look to diversify future purchases with something in the lower medians with higher yields and just buy more of them. But I do like that with my top end properties I have a lot less tennants to have issues with. My PM deals with it all but the concept of being a slumlord doesn't appeal.
Good work mate, keep at it. In 10 years time it will be worth a touch under a million. And I genuinely believe this to be the case. Some people can't see it, but it will happen.
Big plus for you is you're a stroll to the train station so don't have to rely on crappy Westbus runs along the M2 from North West suburbs. Train is critical in Sydney.
Cheers,
Mike
Great buy. Love it for a few reasons
1. Lower end of the market so less likely to be affected by any ongoing economic issues in fact properties at this end do better in uncertain times as the rents are cheaper but for the investor yields are good.
2. Close to Parramatta CBD.
3. Close to train station.
4. Close to one of the largest public hospitals in Australia. Westmead.
5. Because it is close to government and community services lots of opportunities for renting to government employees. In uncertain economic times nurses, governments workers, etc still have a job and the rent is usually paid on time.
Good stuff. I think you will be happy with that purchase.
1. Lower end of the market so less likely to be affected by any ongoing economic issues in fact properties at this end do better in uncertain times as the rents are cheaper but for the investor yields are good.
2. Close to Parramatta CBD.
3. Close to train station.
4. Close to one of the largest public hospitals in Australia. Westmead.
5. Because it is close to government and community services lots of opportunities for renting to government employees. In uncertain economic times nurses, governments workers, etc still have a job and the rent is usually paid on time.
Good stuff. I think you will be happy with that purchase.
Hi Rick,
Very nice, tidy looking property
With the above figures does that take into account the equity top-ups or acccess for the future property purchases?
Hi Virgo,
Yes thats what my Macro DD leads me thinking also.
Btw...in 10 years time todays prices are "cheap"...
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Hi Rick,
Did I mention already you were onto a winner?...
Plan reveals city needs 770,000 more homes
Its not Mensa, but there's always the D&G crowd out there telling us its impossible or the end of the world. I hope Beebop reads that article...
Then there's the rest of us just getting on with it. Sydney will do well over the coming decade. Mark my words and hold me to that observation!
Cheers,
Michael
Did I mention already you were onto a winner?...
Plan reveals city needs 770,000 more homes
SMH said:
Its not Mensa, but there's always the D&G crowd out there telling us its impossible or the end of the world. I hope Beebop reads that article...
Then there's the rest of us just getting on with it. Sydney will do well over the coming decade. Mark my words and hold me to that observation!
Cheers,
Michael
I wholeheartedly agree Micheal. Plus, most of my holdings are in Sydney, which is exciting stuff.
Hi Rewing,
Equity accessed for future purchases are apportioned against the property they were used to purchase, same as the rental income. Not against the property used to secure the access.
Is that what you were asking - Does that explain it?
Hi Michael.
Yes thanks for that.......I had seen similar articles written. These all played a part in my decision into why I chose the area. That's the 'government injection' part I use in my Macro DD selection criteria.
Yes, I totally agree with you.
Some go out and make it happen, whilst the others ponder what has happened.
Nope, that answers it..thanks Rick
thanks
It has been one long hard slog over the past 9 months!! With the rate I'm losing I should get there by July woooohooo
Well done Rick
I know with your energy and drive you'll make things happen successfully and reach your goals. You've always presented as an optimist which is also a huge contribution to your focus as well. Keep up the good work!
Been looking in Wenty and surrounds for a few clients lately- agree that some areas have good prospects, though I'm a fan of the "close to train line" brigade when it comes to transport facilities. Securing something that you don't need to worry about (given your status as an absentee landlord) is sensible and will cause you less stress over the longer term. You really shouldn't have any problems renting as the large migrant population in this area ensures rental vacancy rates are very low at most times. Best of luck with it all
I know with your energy and drive you'll make things happen successfully and reach your goals. You've always presented as an optimist which is also a huge contribution to your focus as well. Keep up the good work!
Been looking in Wenty and surrounds for a few clients lately- agree that some areas have good prospects, though I'm a fan of the "close to train line" brigade when it comes to transport facilities. Securing something that you don't need to worry about (given your status as an absentee landlord) is sensible and will cause you less stress over the longer term. You really shouldn't have any problems renting as the large migrant population in this area ensures rental vacancy rates are very low at most times. Best of luck with it all
