Real Estate Sell Down

@Sackie I get all that but none of those things mitigate the low return on capital with residential in Perth. PM fees, land tax, council rates, water rates, insurance and repairs etc really eat into cashflow. PM fees in Perth are really high.

Return on capital for commercial is much higher, which means that cashflows are much better. I need income, not dodgy tenants and useless property managers. I know there are downsides to CIP as well, but at least the returns are much higher. People are wary of commercial because they don't understand it but I didn't know anything about but I didn't know anything about residential property investment when I started. I'm a quick study, so why not?

If I get jack of the CIPs, I can always flog them off and buy ETFs. Low return on capital but no tenants or dodgy PMs to deal with. I'm not concerned. I feel lucky I have so many options.

 

I'm definitely not against commercial, I actually recently bought into 2 commercial businesses, one in Australia and one overseas. I think you obviously have thought about this for awhile and you know what your doing. Like you said, you are in a position where you have multiple options now. If you decide to shift your focus and efforts towards commercial, I don't see why you couldn't do well mate.

 

I hear ya.
And I reckon it will probably get worse. Maybe you need to look greener pastures if you want RIPs. And save on land tax.

CIPs are a different kettle of fish. There are some areas of Sydney that have hardly anything listed. Can't buy anything so I'm gonna build them. Looking at 2 projects atm with what seems very good numbers.
Waiting on reply for a couple offers.

 

Thought this was so clever!

 

Amazing how much changes in a few weeks.
And so I'm into RE though this time doing a CIP development.
Land deal is done through and I'm teeing up the design and construction team.
This time I am even more lucky than ever to have a group of experienced CIP builders who's counsel and contacts I can use for the process.
I estimate the project will take around 12-16 months to complete.
Expected returns vary and i use ranges for estimates though atm it looks to be around 40-60% CG

On the trading side I started trading fx again and I'm finding it very tedious...too much screen time. Not good. Returns for this year are 12% but I may get jack of it and just trade options. FX seems always drama. And it's mentally exhausting, specially at my age...
Also been trading options and liking it as i don't care what happens. Once I trade, exercised or not. That's it. Just seems so much easier. And a 10% return for the year so far.

And now back to sorting out decades of expense receipts.

 

What? Are you kidding? A decade?

 

Nope. Just making sure I have all the expenses for a couple IPs sold that were held for 15 & 25 yrs.

 

Yes you are right.
When I sold 3 IPs it took a while to find contracts, luckily it was shorter period than yours. However I should perhaps sort out the remaining contracts, place them in one common place, as my old accountant did wrongly calculate the purchase price and associated costs.
However the current holdings I never plan to sell, but maybe one day it will happen, who knows?

 

Trivia: In 1994 I was paying Fixed Rate Bank Bills at a surprisingly low rate of 6.1%pa, unfortunately that did'nt last long.
Then there's council/water rate etc etc

I like to organise them in binders with clear sheet protectors. One each property.

 

We’re buying land to build higher return property . Just completed another .

So switching to properties with higher cash flow . Over next couple of years expect to sell down some of portfolio to have the rest debt free.

Might buy a boat and depending on profits , maybe a fnq winter escape pad . We’ve been debating which we’d go with first and have realised the boat is the way to go initially . Effectively would be a waterfront weekender in Sydney .

Main decision is whether we go for something like this ( which can move at a decent rate )
https://www.boatsales.com.au/boats/details/2009-riviera-4400-sport-yacht/OAG-AD-19469722

or a trawler hull design like this

Integrity 426 Es: Power Boats | Boats Online for Sale | Fibreglass/grp | Boats Online
Which is much more economical to run

cliff

 

Personal POV but holiday homes aren't for me either. I'd hate to be locked into going to the same place every weekend. That gets old pretty quickly. Rather spend on Airbnb's or hotels if/when I can get away and experience different places.

Plus you need to maintain that holiday home eg gardening etc and it potentially sits empty during the week. Effectively you'd be going there once a week to do chores lol. I don't see any upsides.

 

We've been in two syndicates with boats before and used them on a regular basis . A Hanse 43 and a Seawind 1000XL .

Problem with what you say is that you need to book things in advance and you can't predict the weather ...

Own your own boat . Beautiful day . lets go to the boat. Crappy weather . Hey guys , lets not go today and see what it's like next weekend . You don't have that flexibility with a syndicate or with a hire. The boat would be near where I work , so also have the opportunity to take it out after work and comeback the next morning . One of my favourite places in sydney is on a mooring at the top of smiths creek . Riviera would make it easy to get there and back for one evening .

Buying a boat only works if you use it on a regular basis and we would .

But , it needs to be after I cut my work hours down significantly as at the moment we wouldn't use it enough .

We've estimated running / Marina fees would be around 2 k / month and then there unscheduled maintenance .. It's not something to do if money's tight , but hopefully ,we'll be in the position in the next 2-3 years to justify it .

I mean what's the point in investing in property and not being able to spend money on things you want ...

Also we want to have the jetty at our Port Stephens weekender built prior to getting a boat and while it's been approved , it hasn't been built . The Riv would be a shorty day trip up there while the Integrity would be a long day.

Cliff

 

We bought a weekender at Port Stephens around 9 years ago and go up around 2 out of three weekends . It's become the default place for get togethers and we have friends up there on a regular basis .

Most important thing is all we have to pack are clothes and perishable foods . Everything else is there . We're guaranteed a good night sleeps we have nice beds and we've set up everything the way we want it with a Jetty to come ( will be an expensive fishing platform ). I have a late start on Monday morning so we have Friday -Sunday nights up when we want which is quite frequently .

Interestingly it's doubled in price since we've bought it and the market there has only just started moving . Once hexham bypass is done , Wouldn't be surprised to see a further doubling as it will be only 90 mins from the start of the free way . Under 2 hrs door to door for us at the moment .

We have thought of doing airbnb . The house next door is , but it's been a godsend to be able to get out of Sydney over the last year on a regular basis and we like being able to do what we want , when we want.

Cliff

 

Yep after so many years there's a few of us here thinking along the same lines.

I'm more inclined to hire a boat as maintenance, towing, mooring etc is not something i'm keen on, and it seems the need it. Just ring up and if there's one available great, if not hopefully I will survuve the trauma lol.

I been looking at Airlie Beach units last few days. Some nice units around the 4-500k.

 

We look at Airlie , but Cairns is warm in Sydney winter while Airlie isn't that warm .

Cliff

 

Your living the dream.

 

Not quite . Dream would include , Boat , Cairns , and regular OS holidays flying Business or First

Cliff

 

Fair enough.

 

Hmmm, for the OS holidays, need to fix the Covid issue first.