General Property Investment Strategies

Hi All,

I've been viewing and reading a lot of threads on this forum and they are very useful.

Whilst I'm relatively new to property investment, I have learnt a lot in the past year ie Negative/positive gearing, cash flow, depreciation etc.

Are there any threads in regards to "Property Strategies". We invest in properties for one main reason, and that is Future Financial Freedom. What is the strategy ? or strategies to follow ?

One for example that I hear from a few people is buy on Interest Only loans as many properties as you can "safely" and in 7/10/15 years, you are bound to have built Capital (assuming you buy in the right areas, 10-15 km from CBD in VIC). The capital can be used to pay off as much as debt as possible and you can end up with like 5 or 6 properties all cash flow and you are set.

Some books that I have read and even articles, say that you have to buy positive cash flow properties from the start (and they are not everywhere) and that basically will lead to a good future.

I have some friends that buy houses, get plans and permits for them for 3 units and then sell that house with those permits and plans attached for a 60-100K profit.
I have others who build and sell 2 and keep 1.

I currently have a 3 bedroom townhouse in Vic, I purchased it off the plan for 440,000 (10% deposit), Rented out at 400 p/w. Stamp duty was literally nothing and after depreciation and other expenses, the property is positively geared (or is it positive cash flow), tax return was over 4K this year thanks to it.

I am confused as to what my next step is ? Should I do something similar ? I can't seem to find strategies that people have used to accumulate multiple properties. I live with the parents so I don't have much expenses, I make over 80K a year and believe the townhouse is now worth 500 to 520K, according to similar properties in the area and my real estate opinion.

I need help on my next step or what steps people have taken in the past. They say it is very important to get the first property right, and I think I did..I think....

Thank you

 

A key is buying properties below their market value as that allows you to accumulate faster.

Be careful of OTP properties not achieving a respectable valuation in some markets. I think the risk is lower for OTP townhouses than for units. Just be careful if the market is oversupplied.

Strategy partly comes down to what interests you. I think that's why some look at short-term buy, renovate, sell or developing. Developing certainly requires larger cash reserves.

Buying existing properties is a more passive style ( less hard-yakka ).

 

I have written a few threads concerning strategies, more from a tax and legal perspective. See
Strategy: Buying Investment Properties in 1 name only
Strategy: Rent where you live and Buy Investment Properties
Strategy: Rent and Maximise CGT concessions to Pay off the Home loan sooner

I have a list of over 100 different strategies along these lines and I will post a few every now and again.

 

Each of the strategies (and more) people have been able to accumulate multiple properties.

My parents did the negative gear properties and accumulated 10 properties (retired) all negative geared throughout their working life. These properties are all positive geared and still achieve amazing growth.

Cash flow + there are stories out there and these people tend to be more famous or out there due to marketing (I own 20 properties sounds more impressive than a cashflow neg who might own 5-10).

Developing there are multiple developers that own numerous properties. Some will sell all other will sell all but 1 and keep that one as their profits.

What you need to do is read and determine your own risk and goals.

Just remember less than 1% of all property investors own 6 or more properties.