Why a slum lord ?

Discussion in 'Investor Psychology & Mindset' started by JDP1, 7th May, 2016.

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  1. Yann

    Yann Well-Known Member

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    Just one remark though I would say working class and/or low socio areas, as working class also includes older style units close to cities which can be interesting alternatives with the right timing to just houses in suburb types discussed before
     
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  2. JDP1

    JDP1 Well-Known Member

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    Thanks for all the responses...
     
  3. Sackie

    Sackie Well-Known Member

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    I think people need to invest taking 4 main things into account:

    1. Their financial situation
    2. Their risk profile
    3. Their strategy
    4. Their goals.

    Now having said that, I have seen couples on 300k plus a year income with no debt, buy in regional places with not much going for it, just because it returns $20/week. No other reason. And they say they are wanting to piggyback off that into their next ip asap.

    Did they do the 'right' or 'wrong' thing? Many will say there is no right or wrong approach in investing.

    That's a very interesting position to take with investing imo. Very interesting.

    My 2 cents.
     
  4. Blacky

    Blacky Well-Known Member

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    At least they are doing something. Something is better than nothing.

    I know plenty of guys on figures like that, who dont have anything to show for it, and live month to month. They are no better off than the residents of the slumlord.

    Plus - they get to save tax :p

    Blacky
     
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  5. Sackie

    Sackie Well-Known Member

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    I agree @Blacky 100%, better than nothing.

    Don't get me started on the 'saving tax' investors...losing money to save tax purely as their strategy...:rolleyes:
     
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  6. Tony Fleming

    Tony Fleming Well-Known Member

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    I've got a mix of metro and regional properties. I wouldn't say they were slums but not the greatest areas. I had to work with what I had (sub 50k pa) I would have loved a good blue chip property in a good area but it just wouldn't have worked or got me to where I am today. It more comes down to yield. I'm very cash flow orientated and looking to replace my current income. I've found with low socio economic housing its actually hard to have vacancies. I normally Reno my buys to make them more desirable but its peoples last option its either have a place or be on the street. Had plenty of people apply begrudgingly and stay for years while they save for their own place. With the higher end properties people seem to be able to pick and choose what they like. Just my two cents.

    Dr Slumlord
     
  7. Connor

    Connor Well-Known Member

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    What do you think would happen there?
    Birdcage has been a little gem for me over the last few years. While many investors avoid the area due to it's lower socio demographics, I've done very well out of the splitters/small devs. The figures had been stacking up in the area up until the start of this year as prices have now increased.
     
  8. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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    Cannot hazard a guess at this moment.

    The way I see it if labor wins the prices will go down, if liberals win it does not go up by much. So risk/reward suggests, best to wait for a while till dust settles.

    Lower socio demographics and infrastructure are improving, splits are not so viable, but still stack up better than hoppers crossing and laverton.
     
  9. Wall Street

    Wall Street Well-Known Member

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    I'm a proud buyer of slum properties.

    Most of these have outperformed my PPOR in middle class, Volvo driving suburbia - both in terms of yield and capital growth. They don't have to be polar opposites.

    Yes - tenants are a mixed bunch, but the costs of repairs are much less than trying to keep my own home in decent condition (in part because the tenants complain less than my wife) ;)