Strategy advise on portfolio building

Discussion in 'Investment Strategy' started by SydneyInvestor, 12th Sep, 2019.

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  1. SydneyInvestor

    SydneyInvestor Well-Known Member

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    Hi PC Experts,

    I have a couple of properties in QLD which have not grown much. They were bought just a couple of years back when Sydney and Melbourne hit their peak.
    Idea was to get good capital growth in these IPs and then buy something in Sydney as IP or PPOR may be after 6 to 7 years when it starts to heat up again using equity. Now as Brisbane IPs have not grown, I am thinking of buying another one using savings.

    I have contacted Buyers Agents and they are advising areas like Regional Victoria (Geelong, Ballarat etc). Now my question is :

    1. Have Melbourne/Reg Victoria not run up already to give me good capital growth to pull equity and buy in Sydney a couple of years later.
    2. I am expecting Sydney to cool off and stay flat for couple of years now. But this steam of market going back up again in Sydney is somehow defying the logic. Even if my IPs grow, then also I wont be able to buy in Sydney if it grows at equivalent rate or faster.

    My plan was keeping property cycles in mind as per history but seems all cycles are getting nullified?

    Thanks!!!!
     
    ms420 likes this.
  2. Propertunity

    Propertunity Well-Known Member

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    What caused you to expect that?? It's been flat/falling for 2 years and now it is heading up.

    Logic has nothing to do with it - it's FEAR & GREED. :)

    Correct

    If it was as simple as just trying to follow past cycles, then we'd all have it nailed and we'd all be retired millionaires.......it doesn't work like that.
     
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  3. MWI

    MWI Well-Known Member

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    No body can suggest the strategy for you but you. Educate yourself and model those that succeeded.
    There's a difference buying IP or PPOR, one should be strategic decision numbers game and the other emotional where you wish to live and why?
    CG is not uniform each year, depends how markets and economies perform.
    I personally stay away from regional area, so is your choice to buy there because of limited funds and you just wish to enter, rather than buy with a strategy in mind?
    Part of my strategy was to buy in accumulation phase whenever I could afford, but not just anything and anywhere.
    Hopefully this will help you, you should make a plan what you actually wish to achieve from your IPs?
     
    SydneyInvestor likes this.
  4. Beano

    Beano Well-Known Member

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    Just be patient and pay down your mortgage with the profits!
    CG is just the bonus .
    The real money is from your rentals that just grow and grow over the decades.
     
  5. Ko Ko Naing

    Ko Ko Naing Well-Known Member

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    Go for Bendigo.
     
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  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Syd Market sentiment on the ground is good to strong,

    Objective data will show that in 120 days

    ta
    rolf
     
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  7. Sackie

    Sackie Well-Known Member

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    Your too positive. Stop it.
     
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  8. SydneyInvestor

    SydneyInvestor Well-Known Member

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    Thanks a lot guys for all your responses and sorry for the delay in getting back.
    I understand that then with this all these property cycles and clocks like Haron and Todd, and history repeating itself doesnt make much sense...Its all to do with demad and supply
     
    ellejay likes this.
  9. TMNT

    TMNT Well-Known Member

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    ignore herrod and todd property cycles, they are useless

    you said you bought at the peak of syd and melb
    and now you are looking at ballarat and bendigo

    ballarat is/has peaked,
    so it looks like unless coincidence, you have a habit of buying at the peak

    work out the mentality behind it, and you may completely change your actions
     
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  10. SydneyInvestor

    SydneyInvestor Well-Known Member

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    Thanks @TMNT
    I did not buy in Sydney and Melbourne, instead QLD as they were at their peak.
    Now I am working with a BA who is buying in Geelong which has come off peak thats the reason I was a bit skeptical.
     
  11. TMNT

    TMNT Well-Known Member

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    skip to 2:00
    thats my take on BAs (with no disrespect)
     
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  12. SydneyInvestor

    SydneyInvestor Well-Known Member

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    hahaha no idea but I believe an ethical BA can do wonders for you.....sourcing at good location and negotiating on good price
     
    Rich2011 likes this.
  13. Bris developer

    Bris developer Well-Known Member

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    Regional city investing is crazy imho because pure Resi speculators (sorry investors!) have no business being in cities with under 2-3million people.

    Worldwide, property price appreciation is due to a Simple equation of

    population growth x Income growth
    (+ supply shortages)

    London, NY, SF, Syd, HK, Shanghai, Mumbai are all land locked cities with growing populations that earn a lot more disposable income than people in the rural hinterland.

    Why should Australia be so “egalitarian” and unique that growth should magically spread out to bendigo and Townsville now that Syd has supposedly
    Peaked. This ridiculous idea is peddled by buyers agents, Re agents, banks, the entire vested interests within the industry.

    Syd is cheap by international standards with the drop of the AUD. Bris has SOME potential, esp if it wins the 2031 Olympics, it will reprice as a global city . Melb has enormous population growth. I would stay to the major 3 capitals.
     
    Last edited: 16th Sep, 2019
  14. Sackie

    Sackie Well-Known Member

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    I would probably never invest in regional areas either. Not because you can't make money but because there are so many opportunities in the larger cities for less risk.

    Imo investing is really all about managing 3 things. Risk, risk and more risk.
     
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  15. John_BridgeToBricks

    John_BridgeToBricks Buyer's Agent Business Member

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    Absolutely fantastic post! Well done.
     
  16. Bris developer

    Bris developer Well-Known Member

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    People who invest in regional resi are wanting to have their cake and eat it. They chase income and growth and usually get neither.

    Regional areas can make you money if you are investing in a business, a farm, a mine, or as a developer - but as a passive leveraged play into an asset class of diminishing supply, housing investment there makes no sense .

    A lot of wealth creation is based off a virtuous cycle. Wealth begets wealth. Rents explode and prices rise. Just as in business, newly minted property millionaires double down on further bullish acquisitions. “animal spirits” and “fear/greed” drive a lot of price activity followed by periods of price consolidation.
     
    Last edited: 17th Sep, 2019
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  17. SydneyInvestor

    SydneyInvestor Well-Known Member

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