First Investment Ideas

Discussion in 'Investment Strategy' started by Aiden, 13th Feb, 2018.

Join Australia's most dynamic and respected property investment community
  1. Jake Milne

    Jake Milne Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    283
    Location:
    Melbourne
    Bad market cycle timing for Sydney - look elsewhere.
     
  2. Stu Lawson

    Stu Lawson Member

    Joined:
    20th Jul, 2017
    Posts:
    17
    Location:
    VIC
    Can you share what your investment criteria are when you target vic regionals? e.g. rental yield 5%, historical cap growth +10%... vline stations... etc..
     
  3. ashish1137

    ashish1137 Well-Known Member

    Joined:
    12th Sep, 2015
    Posts:
    931
    Location:
    Sydney
    Hi Stu,

    Wiyh each of my purchases, I first see the end value of the house should be at least 15-20% more than what I would be paying. Talk to agents to understand the demand as well.

    Rent should be at least 5% so there are minimal impacts to my serviceability. Again talk to rentsl agents to understand future rentals and demand.

    It should have major infra neaby. Example, a train station within 5 min drive, parks, freeway, bay, jetty, hospital, university, or a major owner occupier area or anything which create good rental demand.

    With time, places and rents will steadily grow. However, there has been a sudden burst in most of yhe areas of Victoria such that each of the purchases have returned nearly 35% equity. I can still sense some areas which have not fully participated in the boom. If you research outskirts, Those areas might have good potential for longer term.

    Regards
     
    Stu Lawson likes this.
  4. ashish1137

    ashish1137 Well-Known Member

    Joined:
    12th Sep, 2015
    Posts:
    931
    Location:
    Sydney
    Hi Aiden,

    GF increases your cashflow but not equity (what i have learnt so far). Hence the first preference should always be where you can achieve a balance of both. When you get stuck in your journey because of serviceability, things like GFs make more sense.

    Option 2 will again increase your cash flow, you will be out of pocket by a greater amount and that impacts your serviceability. CBD units tend to give least equity and this is the peak of cycle. Basically, all points combined, will impact you in a big way. One point would not have been an issue. Say in another 2 years time, may be buying a unit would make more sense considering three options you have given.

    I have also seen that with each year passing by you have to come up with something different (based on market) to gain. Same strategy might have good previously, but may not work now or in an individual's circumstances.

    Say this year your purchase in vic gives you about 15% and next year about 10% on half the investment you are planning to put plus 5% yields on completion.

    That will be way better than 2 to 5% returns in next 2 years and negative rental yields.

    Regards
     
  5. Illusivedreams

    Illusivedreams Well-Known Member

    Joined:
    3rd Oct, 2017
    Posts:
    2,454
    Location:
    Sydney
    Melbourne has the lowest Rental Yields of any capital city according to Core Logic.

    This is usually missed by bashing Sydney.
     
    Anthony Brew likes this.
  6. Mikey

    Mikey Member

    Joined:
    20th Jul, 2016
    Posts:
    14
    Location:
    NSW
    Hi Mate,

    Western Sydney is a good place to invest. There are nice pockets around that are still affordable with room to grow.

    If you're looking around Blacktown area, check out Kings Park (just off Kings Langley). Train station nearby with easy access to M7. A hidden leafy suburb with great development potential.