Why You Should Never Sell a Property

If I listened to this advise id be making 1/10th of what I currently make (portfolio also partly includes lower end developed to rent properties that are yielding 9%)

In saying that I wouldn't sell anything without looking at using that investment in other ways (doesn't need to be real estate)

 

In 1966 I invested £30 in a life insurance where the insurance sales representative said I would get £500 at age 85 .
So in 70 years time . He said you will be able get a house and a car.
I will be lucky buy a letterbox in 2036 .

I cancelled the policy a couple of years later.
Got nothing ...the same as if I kept the policy till 2936

 

Don’t sue @Terry_w , do what the Evergrande fund owners threatened to do, jump from the roof of a high rise. Apparently it works

 

There's that phrase that I hate. Investment grade property! Anything, literally anything can be 'investment grade' depending on your criterior. Some people want high yield, others do not. For some it's blue chip, others it's lower socio housing, for someone else it might be regional. It might be houses, units, commercial, or landbanking....the important thing is that it works for you.

As for buy & never sell, well that's just as silly. For some people buy & never sell is what they want, others may buy, sell, buy, sell their way up the ladder. It's not one size fits all.

 

If I'd have listened to that, I would have never started, let alone being retired from my investments.

About to sell another one. Bought when we were broke, it's in a regional area, with, from memory around 10% yield at the time. It's long paid off now, and has been a nice little cash cow, but it's going because it's 'ripe'. CG hasn't been stellar, which we knew when we bought, but it has actually grown more than three times purchase price in that time, so can't complain. It still churns out a nice little rent, but the yield has eroded over time, and the latest round of CG means that it will be a long drink before more comes along, and the capital will be better used paying down (in offsets) some debt. So, bye-bye, no regrets, and thanks for the ride.

 

Cant keep adding value to a property once its reached the best potential

 

Best decision,

Buy investment-grade properties, develop, renovate and hold them forever.

 

No need to add value .
The income just keeps coming in

 

Even in a stagnant market rinse and repeat > hold
Just need to make sure entry/exit costs are minimal comparative(depends how much value one can ad)

 

Nope....don't agree. No offence this sort of stuff is amateur hour stuff.

I was told new estates in Geelong will not make money...have 3 now about to cross $1m in the next 2 years......investment grade today might have not made the cut yesterday.

Some places gentrify....and outperform the so called investment grade.

 

I find that it's mainly newbies and/or Micheal Yardney's disciples that use the term 'investment grade'. It's very limiting.

 

Aspirational, prestigious suburbs. Where good schools are located. closed to CBD, close to water, high-income suburbs and income growths are consistently growing for decades. A combination of most of the factors, fall into investment grade.

They have high capital growth and borrowing against the equity is easier and all the lenders are happy to lend against them to buy a new property.

 

by following Michaels advice, we have done very very well.

Manufacturing growth through developments, hold them and refinance and repeat the same process.

 

I've bought in plenty of blue chip areas and have done very well. Also bought ripple, increasing demand suburbs and have done well.

It's beyond me why folks like to debate/argue etc what's the best approach.

There is no best approach to be applied to all people. Everyone's skills, goals and financial situation is different.

I mean it's bloody obvious.

 

I think most of them voice their opinions, which is great. This is how we learn and fine-tune our strategy.

I don't think we are arguing here.

 

What defines Investment Grade?
Those who bought in Sydney's West over the last 10 years certainly weren't buying Investment Grade..

I'm thinking Blacktown, Lalor Park, St Marys.. people who got houses in 2010-2012 in these areas for <$300K.
They were able to add a granny flat for $100-$120K and today are sitting on what I would definitely consider Investment Grade properties and have made a 200% return on their initial investment with these properties crossing the $1.2mn mark.

 

I think there's plenty of argue/debate on this in the forum. My comment wasn't limited to this thread.

 

Exactly! It's why I hate the term 'investment grade'.

Each person has their own idea of what investment grade is, depending on their own criteria. If I had stuck to this...

....I would not be retired, living off of rents today.

I'd like someone to show me someone who has retired purely from MY's 'investment grade' properties that was on an average income. While I'm not going to say that it can't be done, I will say that it would be very hard, if this is your only investments.

I have no issue with people investing in these areas, if that's what floats your boat, only the term 'investment grade', because, frankly, we are all different. Our incomes are different, our goals are different, our affordability's are different and the properties we invest in are different.

Stating that somewhere is 'investment grade', while other places are not, basically says that all those people investing elsewhere are 'inferior' and so are their choice of investments.....but if that were the case, then all those people who are renting in places that are not 'investment grade' have also made a poor choice, and should move into an 'investment grade' investment property.

Now, it's no secret that most of the properties that I've bought over the years have been cheaper, higher yielding properties than anything innercity, but the thing is, that these inferior properties still get CG, and they get regular rent increases as well. There has never been any issue with further borrowing from equity. I have happy long term tenants for the most part, which is what we all want.

So, different strokes for different folks.

For instance, I know a lady who has several houses out the back of nowhere. Little towns with maybe 200 people. Certainly NOT my idea of a great place to invest. But she does & she makes it work for her. Bought a shack for $80k and rents for $300pw. Does everything herself, including managing her properties.

Now, I would never tell her that her properties are not 'investment grade', because clearly, for her, they are, while for me, they are not. An 'investment grade' property is really something that you buy, that works for you. Where you can get happy tenants, paying their rent, and looking after your property. So, it doesn't really matter, whether it's out the back of Timbuktoo, or a blue-chip.

 

Ok can you please share a couple of examples?

 

Glen Eira and Bayside Councils in Melbourne.

I bought properties in

Bentleigh East - 2 Townhouses (Build and Hold)
Bentleigh East - 2 Townhouses (waiting for DA approval) - McKinnon Secondary School Zone

Bentleigh - 2 Townhouses ( waiting for DA approval) - McKinnon Secondary School Zone

Ormond - 2 Townhouses (completing NOV 2021) - McKinnon Secondary School Zone

Brighton - Renovate and Hold.

The above properties I consider as investment grade.

I got more properties in Western Suburbs as well. they are not considered aspirational or well sought out properties. They have capital growth due to the ripple effect.