Any good regional cash flow stories?

Let me just put this into perspective. If you had bought something in Sydney in 2002-2003, you would have waited just as long. A full cycle can take 10-15 years. The difference I have noticed between Regional & City properties (in the areas I've invested), is that in the City it will stay flat for a long time between drinks, whereas in some of the Regional markets it just slowly creeps up, and maybe this is why some say there's little CG in Regional, is because it's not so obvious. Blind Eddy could see prices were taking off in Sydney, because it went so fast.

What you are talking about is timing the market. Waiting for an area to start to move, or just lucking out & buying at the right time. There's a heap of investors that do this very successfully,
@See Change being one who buys up big & then selling down afterwards, but most investors don't do this.

 

Some did double their money, I did and I know other investors also same scenario. But nonetheless even at 50-60% growth that is excellent outcome in 3 years.

Different strokes for different folks, I am certainly not poo pooing regional property, but presenting some facts and its not all bad. I don't care either way, if regional centres are booming I have and will jump into these markets, however my strategy will always be to sell down some to reduce risk.

 

Regardless of the lending environment, it was this strong cashflow that allowed us to continually borrow & buy.

 

Skater am not at all saying that one strategy is better than the other, they are different and by the way I have purchased in regional centres in WA in the boom of 2001/7, I doubled my money in a very short time frame, Government was pumping some serious $ into these areas. I would buy in regional areas today in a flash if I see an opportunity to make money.

MTR

 

I know that & I'm not denying that, however I think that it needs to be understood that doubling your money in three years isn't a normal cycle. You've either been damn lucky to buy at the right time, or you have successfully timed the market. There are a lot of investors here who do time the market & make very good gains from this, and I congratulate all those that have done this, however the average man in the street doesn't do this, and often wouldn't know where to start.

 

This is precisely my point ... although today , even you would have less borrowing capacity at almost all lenders, because all your debt will assessed at sensitised rates, but was not during your accumulation phase. Now granted. that may not stop you purchasing completely, as your portfolio has already enjoyed enough time to mature to the point where it's extremely high yielding, but it would limit the number of additional purchases you could make compared to a year ago.

That doesn't harm your plans of course, as you are at the end of your investment cycle and retiring, rather than at the beginning. But consider someone starting today, seeking to grow a portfolio large enough to generate a passive income, and faced with far larger debt levels and far more sensitised treatment of debt levels than you were subjected to during your borrowing /accumulation phase.

This is where debt reduction will be the difference between making it or not making it, for those starting today. No one with a PPOR mortgage, a partner and just 1 dependent child and combined earnings of less than 200K has a snowballs chance of being able to borrow sufficiently to fund a 2.5 million + portfolio ( which then needs to double) in order to finish with 2.5 million , yielding 5-6%, for a 6 figure passive income... not now.

You now require either a very large income, a windfall or a cash flow accelerant with which you can pursue aggressive debt reduction - ie NRAS or dual occupancy , in order to achieve what the previous generation did. So the arguments for including some sort of extremely high yielding stock in a portfolio is extremely compelling.

 

Ah, yes, but the real rub comes when they want that PPOR to be a $1-2mil property, and they want a new car every few years (two if a couple), eat out and go overseas, and THEN expect to get a 6 figure passive income.

While we are far from perfect, we live simple lives. We own our PPOR. It's not new, it's not a mansion, but it's all we need. We own our cars. Again, they are not new because I don't see the value in spending too much money on cars. We do go on overseas holidays, but this is only a recent development, we do occasionally eat out, again, this is more recent, but overall, we don't need a 6 figure income to live well in retirement.

 

Obviously NRSA isn't a long term panacea for property wealth as ( from my understanding ) there are no new properties available from June this year .

Cliff

 

Seeing man

Oh no, Dr Cliff mixing up MRSA with NRAS...

 

Just a highly tax effective dividend reinvestment plan done using property, that also works as a very effective debt reducer .... so I guess it depends on whether you consider portfolio accumulation AND debt reduction being achieved simultaneously, with all the benefits that offers in the long term in acting as a counter measure against the regulatory disruption we are seeing, to be a great platform for long term wealth creation.

I do. But I understand that you may not - you have an income well above the median, and a mature portfolio. I wonder though, if faced with a median income and commencing your accumulation now, whether you wouldnt find the maths far more compelling for your needs, in those circumstances.

 

That can all be done after the income stream is built.... a little delayed gratification will reap great long term benefits - as you are certainly an example of....

 

I'm pretty sure this has been on market since december 2015. 19 Roberts Avenue Barrack Heights NSW 2528 - House for Sale #122110338 - realestate.com.au What do you not like or like about this property?

 

Larryx2, I can't quite put my finger on it, but I like this one better:-

19 Boonara Avenue Bondi NSW 2026 - House for Sale #118903099 - realestate.com.au

Although I've heard others opinions that make me believe a large shoehorn might be required to remove the current tenants, assuming that's an apt description...

 

Newbie investor here trying to understand what the growth drivers were for OP's regional properties?? A lot of the DD I am doing is based on infrastructure, employment, population growth, schools, transport etc.

These regional areas seem to go without some of those important growth drivers yet their value still grew enormously?

 

Yes they do ….

Cliff

 

We bought a 2x1 Villa unit in Kalgoorlie some time ago for $105k.

It is currently renting at $260p/w - after the mining industry crash.

Generally; pretty good tenants over that time as well (so far).

The buy-in price is no longer what you are looking for though...currently worth circa $200-220k