Burnt by OTP purchase

Discussion in 'Investment Strategy' started by Jason A, 8th Jul, 2017.

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  1. larrylarry

    larrylarry Well-Known Member

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    Correct. Sometimes a punt still must be taken after factoring all the variables. Think long term. The OP doesn't seem to have thought it through but want to get back into the game after missing out and that's the danger. Well that's how I read it.
     
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  2. Sackie

    Sackie Well-Known Member

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    I agree and also there is like you mentioned the opportunity costs. Even with the DA and sell at a good time, money/servasabilty is locked away for god knows how long. So if someone wants to actively grow their portfolio asap...really need to be SO careful with their assets selection imho.
     
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  3. larrylarry

    larrylarry Well-Known Member

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    Yep. I think the changing environment calls for new approach and sometimes good property selection is just that, good property selection. Development is the next level up with greater risks (greater rewards) but old hands like you know what to do.
     
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  4. Sackie

    Sackie Well-Known Member

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    I'll tell you something... even the ppl on here who develop, all get into some ****, get blindsighted, some small and big issues along the way. Developers are sometimes slow to admit it, but imho we all are at some post just flying by the seat of our pants and winging **** sometimes. And that's WITH experience. :DThat's why I am a firm believer that if the numbers don't make sense at the beginning and you still go ahead to develop , you gotta be crazy.
     
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  5. Gockie

    Gockie Life is good ☺️ Premium Member

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    Agree Larry. He shouldnt buy just because he missed out. So... It really needs to be thought through. $550k is a lot of money to have saved.
    Yes to this. I think in Brisbane though, he wouldn't have to spend anywhere near $1mill. In any case, near Brisbane city is a safe bet (watch for flooding), it should do well with demand. And I like the bayside too as another option.

    Agree.
     
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  6. kierank

    kierank Well-Known Member

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    Totally agree with what @Leo2413 said in his post.

    I just wanted to add that making mistakes is all part of one's education. We have all made them.

    To make a mistake once means it is education; to make the same mistake more than once means you are an idiot.
     
  7. Omnidragon

    Omnidragon Well-Known Member

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    Why not take a punt and bet the housing market will fall and short certain stocks. Might make 5x your money
     
  8. nswvic

    nswvic Member

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    I can see the OP's urge to buy. When that monthly payment is actually going toward something, it`s a lot more fulfilling. As PPOR, apartment is also suitable to singles, couples without kids, convenient to public transport and amenities.
     
  9. RetireRich101

    RetireRich101 Well-Known Member

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  10. Jason A

    Jason A Member

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    Firstly thanks everyone for the replies. It was land OTP. Definitely would of made min $300k capital growth judging buy what they are selling for in the area. I did my research in buying it at the time, the area was at start of growth upswing in 2013, but my instinct told me not to buy OTP. I just got sick and frustrated of looking at crap property's for the money (I'm fussy). Here was a chance to build something new, get stamp duty exemption, builders grant $15k. Live in at first then rent it out. Tax benefits, good growth prospects(equity) and nice future PPOR. Then purchase investment unit. Sounded good on paper. But that's done and dusted so need to move on.
    Don't really have FOMO but I'm renting so trying to figure out financially what's the best way forward. Have been earning decent return in index ETF's, and 3.0% interest in citibank so that helps to subsidize rent. Share markets have had a strong run so I'm thinking about moving it all back to cash in the bank in the mean time. A lot people are recommending Brisbane and gold coast? What are peoples thoughts on the basic fundamentals of those areas? I was under the impression they will never be the same as Sydney for future growth. Are people just speculating these areas because they missed out on Sydney and Melbourne? Thoughts?
     
  11. larrylarry

    larrylarry Well-Known Member

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    Its the holding costs that concerns most investors who want to have a multiproperty portfolio so Brisbane and their states make more sense number wise. If you buy in sydney at near peak and not much more room for CG and the rent doesn't cover repayments with IR going up, what can this property do for you in the next few years when it flatlines?

    Where was this place that you could have made $300k from the increase in land value?
     
  12. Sackie

    Sackie Well-Known Member

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    I bought some deals in 2012, 13 and recently in 16 in Brisbane. The ones i bought in 2012 and 13 already have had some very good growth. You can't compare Sydney and Brisbane nor do you need to in order to do well. If your comparing Brisbane and Sydney like the way you are, you will.continue to miss out on some stella deals.
     
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  13. Jason A

    Jason A Member

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    Fair call. I really should get up there and have a look. So brisbane is yielding well and has potential for ok CG so that's the theory behind it? I work for a large organisstion so im exposed to alot of people. Alot of people ive spoken to have made fomo purchases in brissy and goldy due to them missing the boom in sydney. My concern was growth was only happening up there due to this, because sydney is still strong and if Sydney comes off song there could be potential for neg equity?



     
  14. Sackie

    Sackie Well-Known Member

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    I think one of the main reasons investors see opportunities in Brisbane is due to affordability and the price gap when compared to melb and Syd. Brisbane also has alot planned for the next 10 years. Yeilds can also be better than syd and melb and you can buy some gems. If you knew what to look for a few years ago homes in some areas selling for 450k are now 600-650k with rents at 500-550 a week. There were also some nice splitter blocks selling in the mid 500s to low 6s, now all above 1 mil plus.

    Moving forward i think mid ring to slightly further out will have some good deals. All depends your on goals and strategy.

    No crystal ball of course. Brisbane could stagnate next 10 years, who knows.

    For me, it's all about lowering risk and increasing my odds of making good purchases by 1. buying at what i think is a favourable part of a states cycle, 2. buying at what i believe to be below market value and 3. buying with add value potential. Just what works for me, it may for others too.
     
  15. Jason A

    Jason A Member

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    Definately underatand the holding costs for sydney are huge. Your probably getting nowere in sydney buying now especially if it flatlines. I think i need to research qld more and check it out. Im just a bit skeptical on qld. I know of some horror stories of gold coast a few years back from friends and family. Know some people who also bought brissy apartments who have neg equity
    But of course it comes to selecting the right property in the right suburb.

     

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