Anyone only own 1 IP (and no more planned?)

Discussion in 'Investment Strategy' started by Kjulez, 12th Oct, 2020.

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  1. Kjulez

    Kjulez Member

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    So I am a little late to the idea of property investment.

    If I could have my time again I would do things differently but anyway, this is where we are.

    Paid off our house totally in 2015. THEN looked into what to do with excess money. For the past 5 years we have been focused on shares and have built up a pretty good share portfolio. Aiming to retire in about 10 years.

    Only now have I really thought about why property investing is good regarding a cash on cash return and while it's too late to build a property portfolio if we want to retire in 10 years, I was thinking it would still be good to have 1 investment property (which we should be able to do at a certain price point).

    Does anyone think it's worth doing or with only 1 property is there too much risk on getting it right? Just seems like if we don't pick the right spot/ time for growth that it could be money not very well spent.

    Does anyone only have 1 IP & happy with that decision?

    Thanks :)
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    Why change a winning strategy?

    The Y-man
     
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  3. Trainee

    Trainee Well-Known Member

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    If you understand and do well with shares, theres no need to add a property.
     
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  4. Codie

    Codie Well-Known Member

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    Agree. I’ve only recently turned to shares and if I had done so 4yrs ago instead of buying property I’d be miles ahead. A healthy balance of both is a good idea, well located A grade properties for growth (no need to go adding poor stock just for the sake of another) and direct other funds to the market
     
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  5. Lacrim

    Lacrim Well-Known Member

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    If you felt the need to buy a property, the only one I would consider buying in your position is one that had dual purpose ie a future downsizer.
     
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  6. Kjulez

    Kjulez Member

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    Hi The Y Man.

    It just seems attractive with low interest rates and also possible growth that I was possibly just blinded to before by following only share heavy/ leaning advice. Also, a lot of our current strategy will involve progressively withdrawing the principal during retirement (i.e. passive income of dividends AND selling off shares). I like the idea of at the end having an additional asset to pass on to our children. Sounds very privileged to say that but I think most people here are probably aiming for the same sort of thing.

    Also I think I just worry about diversification. Which doesn't make sense to put a large chunk of our money into one specific asset but I just mean it would be good to have exposure to property, something that can seem a bit safer than shares in the crazy world we're currently in.

    At the moment I feel like I don't want to buy shares due to uncertainty if the market will ever reflect what is actually happening in the world and cash is such a terrible return that it seems like having some 'good' debt could be a good thing. Although I must admit I haven't worked through the numbers as yet as to if it is better to just continue with current strategy.
     
  7. Kjulez

    Kjulez Member

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    Yes, this is what I have been thinking of, only problem is that I don't think the area I want to live in long term is a great investment suburb. Already quite expensive and rental vacancies are a bit high :(
     
  8. The Y-man

    The Y-man Moderator Staff Member

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    Cool! :cool: :)

    Do you have a PPOR? How has it performed? Do you owe anything on it?

    The Y-man
     
  9. Lacrim

    Lacrim Well-Known Member

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    Inner city apartment?
     
  10. Kjulez

    Kjulez Member

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    We have a PPOR, nothing owing. It has performed relatively well I'd say, but I never really consider our house as an investment. Like it has performed well, but so has anywhere else I'd want to live so there's no real gain.

    That's the thing, it's a bit hard to look so far into the future and know what you would want, but I'm not huge on apartments. Actually I think it would just be easier to downsize the current house in the future.
     
  11. The Y-man

    The Y-man Moderator Staff Member

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    Sorry - missed it in your original post :p

    How much can you borrow?

    The Y-man
     
  12. Trainee

    Trainee Well-Known Member

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    If you wanted to take advantage of leverage, can you put in a deposit, with the idea that the property will not be for retirement? But for your heirs?
     
  13. The.Night.King

    The.Night.King Well-Known Member

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    one property cycle is about 10-15 years. So in your case 10 years prior to retirement is still doable. 2-3 IP in the next 10 years ( perhaps even 5, 1 property every 2 years ) I reckon is doable if you plan your strategy accordingly, Of course you need to leverage the expertise of others who have done it.
     
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  14. Kjulez

    Kjulez Member

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    I have only used online mortgage calculators but they seem to say around the $1.2M mark. Our house is probably worth around $1.5M.

    Yes, that is essentially the long term aim I suppose. I guess we just need to see some sort of financial advisor to sort out what we might realistically be able to do. I had been looking at Empower Wealth but only because of the Property Couch podcast and I like their message. I also like the fact that some of the reviews/ testimonials say that they didn't recommend property for them so that's good to know that if it doesn't fit with your goals they don't push that even though they obviously favour it. We will probably at least go for the initial appointment with them.
     
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