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Let's Talk Strategy!

Discussion in 'General Property Chat' started by York, 24th Jun, 2015.

  1. York

    York Finance Broker Business Member

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    Hi guys, I've been a long term Somersoft browser for a long time and have learned a lot thus far.

    My question is in regards to strategy. I currently live in my PPOR and aquired my first IP early 2014.

    With the current upswing in the Sydney market I have made some decent capital gains. Now, I do have some equity to make another purchase. Obviously not in Sydney as the prices have become out of my league. So I'm looking to regional areas or coastal. With my only IP NG, I was thinking maybe next one should have some cash flow as I would find it tight if both were NG.
    Also I think it would be good to have a bit of balance in my portfolio.
    I've been looking around places like the NSW South Coast. Sanctuary Point and Sussex Inlet. Seems to get decent returns and growth isn't great but it does increase over time (like most places I suppose).

    Does this sound like a sound strategy? I forgot to mention that my IP and PPOR are both in Sydney's West. So for growth I am covered based on my financial ability.
     
  2. Rixter

    Rixter Well-Known Member

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    YP, what and where to buy is dependent upon your chosen investment strategy.

    You see property is merely the vehicle. The strategy is how you intend driving that vehicle.

    Unfortunately the mistake I see newbies and sometimes not so newbies is that they are property focused instead of strategy focused which is like putting the cart before the horse.

    Property investing is not about property rather about the strategy and the way you intend to use the vehicle to get to where you are wanting to go. No good buying a small shopping car if you intend driving interstate on a family holiday.

    What strategy/s are best for you is determined by where you are wanting to go, the time frame you want to get there in and how hands on along the way you want to be - all based around your personal risk profile.

    What exactly are you trying to achieve and when by?

    I hope this provides some food for thought.
     
  3. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Welcome York.

    Rixter makes some great comments, particularly asking "What exactly are you trying to achieve and when by?"

    May I ask, are you looking at regional/coast NSW simply because you can afford there, or because it will move you toward your goals?

    If I were to take a guess, I might suggest that you are sticking with something a bit familiar and comfortable as you don't have a clear enough strategy to point you in a firm direction.
     
  4. devank

    devank Look, lets just get on with this, ok? Premium Member

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    I have memorised this sentence by now.
    As soon as I see the words "You see.." this sentence come to mind :p
     
  5. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    As a side note - pull out the equity as quickly as you can as there are more credit changes to come so you may not be able to do this in the future.

    Re north coast - I can still see some good deals in Gosford, upper CC and lower newcastle.

    I know cash-flow is your goal but surely CG is important too right? As such I just can't see you getting that in areas you mentioned?
     
  6. York

    York Finance Broker Business Member

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    Hi Rixter,
    Thanks for your prompt reply. I guess I am a newbie. Which is why I am here to learn as much as I can. Your response is a great one. You are right. Property is my vehicle to gain financial independence and retire as quickly as I can.
    My purpose in property investment is to grow my wealth to a point that physically working my normal job is no longer a necessity.
    So at this stage in my life (I am in my early 30's) I cannot purely rely on a CG only strategy as my income will not support multiple properties NG. So I'm trying to find a medium CG property with a medium yield. This will have sone gains long term and also hopefully be at least CF neutral for the short to medium term.
    Sorry for not being clearer in my first post.
     
  7. York

    York Finance Broker Business Member

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    Hi Steven, Thank you for your welcome. I have no problem going beyond NSW. I just happen to know people who invested in the areas I mentioned previously.
    I have no particular connection to NSW. Obviously I live here and know the area better than others. But I'm learning other markets too including Brisbane metro. This is my other area of interest.
     
  8. York

    York Finance Broker Business Member

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    Yes, CG is definately important. I guess I haven't thought about what Im actually aiming for. Like what Rixter said. I need a clear goal. I guess at this stage in my life it is CG. I can't retire any time soon so I should be looking to grow my wealth. I just though CF would help in servicing loans but it looks like that would come at the cost of CG in the longer term. Food for thought. Thanks.
     
  9. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I think there's something to be discovered in the quotes above :)

    Keep poking around here and asking more questions. Seems a lot of the experienced investors (who seek capital growth) are also looking at Brisbane so you may be on to something there.

    I'm currently house hunting in Brisbane. Flying up weekly from now until I have an offer or two accepted.

    I'm sure you could drop Rixter a line for some help with setting out your goals and plan for their accomplishment. Knowing where you're header and how to get there is critical.
     
  10. York

    York Finance Broker Business Member

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    Thanks for the input Steven.
     
  11. bob shovel

    bob shovel Well-Known Member

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    as a "newbo" dont be disheartened or scared off by the gobbledeegok of straregy and vehicles. it will come, keep reading and asking q's.

    you have an end goal of sorts in place you need to fill the gaps. dont ecpect to know or need to know the gaps yet. start getting ideas and a loose strategy, start say short, mid and long term ideas
     
  12. Arashi87

    Arashi87 Well-Known Member

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    Saying I want to be financially free is equivalent to "I want to go on a road trip that makes me happy", that's not a destination.

    Often people misinterpret what Rixter trying to tell us (including myself few weeks ago:p)

    Goals are need to be very very specific, for example you said retire as quickly as possible, whats your salary right now? And that "figure" can work in reverse to build your portfolio. And in how long? 20-30 years? Will you be happy with that figure in 30 years?:cool: :cool:

    Mind you I am a noob too, I still don't dare to plan 20+ year and beyond but trying to set my goal in short-mid terms (5-10years) :rolleyes::rolleyes::rolleyes:
     
    bob shovel likes this.
  13. devank

    devank Look, lets just get on with this, ok? Premium Member

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    In short, be SMART about it :)

     
  14. York

    York Finance Broker Business Member

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    Thanks for the tips guys. Great community here.
     
  15. Lisa Parker- Buyers Agent

    Lisa Parker- Buyers Agent Well-Known Member Business Member

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    Beautifully articulated!
     
  16. York

    York Finance Broker Business Member

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    Great advice Bob. Thanks for the positive encouraging comment.