Investment advice seeking

Discussion in 'Investment Strategy' started by Cat Lover, 11th May, 2020.

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  1. Cat Lover

    Cat Lover Member

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    Hi All,

    I have been reading posts in this forum for while, however, this is the first time I post here for a question. It will be much appreciated if you guys would please give me some advice.

    I own a very large apartment (much larger than the standard one), which has 2 basement car parks on one of the main roads in Hawthorn, which its value app $900 K (no mortgage, hold it for 10 years+, there are 14 apartments in the block). It is renting at $550 p/w before expenses and management fee in this current market. I am single, no kids, 52 years old. My total incomes after deducting all living expenses is $3 K per month. The property next doors is about to be demolished and the developer is going to build a new apartment block which will cover the sun into our living room.

    Q: Should I sell my apartment in this market and buy a new property somewhere else?

    - If so, where is the best place to buy for both average cash flow + capital growth in future ?
    - Is it worth to do it? after paying selling commission, CGT and stamp duty, or just leave the current one and rent it out cheap?

    Thanks in advance for your help.
     
    Cat Lover, 11th May, 2020
    #1
  2. The Y-man

    The Y-man Moderator Staff Member

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    What (if any) do you think the impact on the rent be?

    The Y-man
     
    The Y-man, 11th May, 2020
    #2
  3. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Hey and welcome :)

    What are your goals right now?

    A $900k property returning approx 3% gross shows your still banking on growth from this property - b/c much better cash-flow is available in different assets.

    If the growth and/or yield is limited it makes sense to reconsider if it's the right thing to invest in right now.

    You need to think carefully about what you're trying to achieve, and whether this property is delivering it, both right now and also into the future.
     
    Jess Peletier, 11th May, 2020
    #3
  4. Cat Lover

    Cat Lover Member

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    I m not sure (maybe 10% less) but I think the vacancy period will be longer as more properties are available for rent.
     
    Cat Lover, 11th May, 2020
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  5. The Y-man

    The Y-man Moderator Staff Member

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    *Maybe* look at selling when you have the next vacancy - very hard to sell with a tenant in-situ.

    How big is it ? (sqm)

    The Y-man
     
    The Y-man, 11th May, 2020
    #5
  6. Cat Lover

    Cat Lover Member

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    Over 180 sqm including balcony, car parks and storage
     
    Cat Lover, 11th May, 2020
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  7. Cat Lover

    Cat Lover Member

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    Thanks Jess. Annual growth at 5 -7% and net yield after fees and tax at 2% are what I am looking for. Do you have any suggestion for me?
     
    Cat Lover, 11th May, 2020
    #7
  8. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Is the current property meeting that brief? :)
     
    Jess Peletier, 11th May, 2020
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  9. The Y-man

    The Y-man Moderator Staff Member

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    How much of your $550 pw is left after pm fees and expenses?

    The Y-man
     
    The Y-man, 11th May, 2020
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  10. Cat Lover

    Cat Lover Member

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    Yep in the past 10+ years but I think it won't in future
     
    Cat Lover, 11th May, 2020
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  11. Cat Lover

    Cat Lover Member

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    Over 2% net yield b4 tax. Do u think semi rural property is a good investment for capital growth?
     
    Cat Lover, 11th May, 2020
    #11
  12. The Y-man

    The Y-man Moderator Staff Member

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    IMHO..... NOOOOOOOOOOOOOOOOOOOOOOOOOO!!!
    (unless it is on the edge of urbanisation and able to be split in the future)

    The Y-man
     
    The Y-man, 11th May, 2020
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  13. The Y-man

    The Y-man Moderator Staff Member

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    The Y-man, 11th May, 2020
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  14. Cat Lover

    Cat Lover Member

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    Cat Lover, 11th May, 2020
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  15. The Y-man

    The Y-man Moderator Staff Member

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    I have 2 properties there.

    The first was the unit we bought in 2000 for $165k. It's now bank valued at $680k....


    The Y-man
     
    The Y-man, 11th May, 2020
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  16. Cat Lover

    Cat Lover Member

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    Thx u for your advice. What is the net rental yield?
     
    Cat Lover, 12th May, 2020
    #16
  17. The Y-man

    The Y-man Moderator Staff Member

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    Our 3BR/2BTH Unit gets ~400pw

    The house I linked above will need carpets, bathroom, kitchen and repaint but will prob get around the same.

    The Y-man
     
    The Y-man, 12th May, 2020
    #17
  18. Spiralkut

    Spiralkut Well-Known Member

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    With that money you could easily buy a couple cheaper properties returning 1k a week in rent gaining 5-7% capital. They would not be in Melbourne though.
     
    Spiralkut, 12th May, 2020
    #18
  19. Cat Lover

    Cat Lover Member

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    R they in Victoria? Or other cities?
     
    Cat Lover, 13th May, 2020
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  20. Cat Lover

    Cat Lover Member

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    Will it take 2-3 months and cost $50K to do these renovations?
     
    Cat Lover, 13th May, 2020
    #20
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