Is property really a good investment?

Discussion in 'Investment Strategy' started by Alex123711, 28th Mar, 2018.

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  1. Gockie

    Gockie Life is good ☺️ Premium Member

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    If 3-4 years ago... yes... you sold way too early....
     
  2. Ed Barton

    Ed Barton Well-Known Member

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    Not necessarily.
     
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  3. Beano

    Beano Well-Known Member

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    You need to look elsewhere
    The last deal I have seen is my investor mate 9% net ...Apparently it has a large land holding hence the lower yield (the last one he did was 10%)
    I have only been doing land (no building ) recently ...not a fantastic yield but still returning 30% of the net rental as profit
    All profit goes to reduce debt
     
  4. Perthguy

    Perthguy Well-Known Member

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    Is that residential? Because the OP is asking about residential.
     
  5. Codie

    Codie Well-Known Member

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    Yields don’t matter to the majority of the population that is owner occ, and they are exactly who is going to pay more & more for property in great locations. Not an investor trying to pick up a deal. So that logic is flawed imo - also ive bought within 8-9km with 5.1% yields $600k plus house & land in Brisbane so if rents move slightly north we could easily see growth here.
     
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  6. Zeehan

    Zeehan Well-Known Member

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    Great comment. Alex, time and regular employment, play a huge part. We held our investment unit for 15 years and were fortunate enough to make a decent enough profit to put into our super and keep us off the pension. From time to time, but not often, if the unit wasn’t rented for a period, we had to top up our mortgage repayment. No way would we have put the equivalent amount of money into a bank account. It’s a form of forced savings in a way. We have no regrets.
     
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  7. Codie

    Codie Well-Known Member

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    I don’t think your numbers are correct, using real numbers from a purchase 1 month ago, inner/middle ring 9km to Brisbane CBD

    $582k, 11% deposit
    Payments $19,400Pa. - $380 a week I/O
    Insurance $1530pa -$30 a week
    Rates $1800pa -$36 a week
    Maintaneance $?
    Property manager $38 a week

    Rent $550pw $28,600
    Depreciation roughly $6k PA @ say 30% marginal = $2k back so let’s say $30,500

    As owner occ we remove the depreciation which basically cancels the cost of a property manager so like for like All costs associated come to around $23-25k as an IP a year so I’m not sure what your using as an example as this was 1 month ago and is 5k PA positive and in a great location
     
  8. Angel

    Angel Well-Known Member

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    In Qld the LL pays most of the water charge, and the council rates for LLs is almost double what OOs are charged.
     
  9. Beano

    Beano Well-Known Member

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    That particular one is commercial
     
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  10. hieund85

    hieund85 Well-Known Member

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    Water charges, repair/maintainance/cleaning/gardening, vacant loss, letting fees are not included here. Your calc of $5k is too optimistic.
    Where is stamp duty? What is the interest rate? It does not sound like INV IO loan rate. The gross yield based on the purchase price only is 4.9%, difficult to see it make CF+
     
    Last edited: 30th Mar, 2018
  11. Perthguy

    Perthguy Well-Known Member

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    I think commercial can have a much better return than residential
     
  12. Illusivedreams

    Illusivedreams Well-Known Member

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    It think it is OO.
     
  13. hieund85

    hieund85 Well-Known Member

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    If it is OO, then there is no number needed, just buy what you like and can afford. And he did mention property manager that's why I thought it is IP.
     
  14. Codie

    Codie Well-Known Member

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    Sorry it is OO I’m just pointing out how much a property manager would be at rental appraisal, stamp duty I don’t calculate into a yearly cost for me it’s just the entry. Interest rate is 3.75% - i move in gain PPOR rates & stamp duty, Reno then move out 12 months time. Keeping the rate and saving $9k on stamp duty.

    Not sure about water charges my tenant pays them all on the other property in Gold Coast?

    Garden/maintenance/letting fees are really only between vacancy are they not? Leads back to buying quality in a good location & that problem is less so. Either way let’s say that $5k is soaked up. Neutral is not a bad place to be.
     
  15. DrunkSailor

    DrunkSailor Well-Known Member

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    Yeah I will, I’m looking at places every day. But don’t worry, if I buy something and the market crashes next year I’ll be all over this forum whinging about how you guys promised Sydney and Melbourne would never go down.
     
  16. Codie

    Codie Well-Known Member

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    Says a lot. Your obviously not taking a long term view if your looking at next year. Bare in mind your buying towards the peak in the Sydney market and there’s a lot of info and data out there to support this. Does it mean you shouldn’t get a foot in the door? That’s up to your situation to decide. Remember there’s other markets out there
     
  17. Illusivedreams

    Illusivedreams Well-Known Member

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    No one said the market wont to down.
    You have to evolve and change with the market.

    My strategy has changed in the last 6 months.

    Will change again in 1 year.

    If return was guarantee their would be little profit.
     
  18. Angel

    Angel Well-Known Member

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    He is being sarcastic.
     
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  19. Ed Barton

    Ed Barton Well-Known Member

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    There is so much tax involved in property investment.

    Select property investment is good, and I'm not talking gung ho selection, just not stupid things like mining towns. For those without much money it's cheap to borrow to buy too.
     
  20. virhlpool

    virhlpool Well-Known Member

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    By that logic most suburbs neat city have ****** yield in any major city. Does it mean they won't boom in near future? Not sure of It works like that.
     

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