Why You Should Never Sell a Property

I think I need to get financing from the same people as you. At a point I was >7% yield on my portfolio and none of the majors was giving my financing

In saying not really sure if I want a massive rental properties portfolio anymore (I just have a phobia of tenants)

 

While I agree that is the case for many....but like my example of the lady in the back of nowhere, she simply HAS to focus on cashflow, as she is a very low income worker. Different strokes for different folks. The person I'm speaking about will never be a high income worker & will never buy a $1m property.....but she can supplement her income and improve where she is in life....something most in the same scenario would sit on their hands and say 'woah is me'.

Although she's on a much smaller scale to those of us who have built large portfolios and have made decent income, I respect her for giving it a go, and making (perhaps very weak) lemonade out of the lemons she's been dealt.

 

Rubbish! Banks have always used rental appraisal from real estate agent.

 

That's a great yield.

I never live in my own property.
Because we build and hold, Depreciation helps to offset taxes and boosts the income.

The First 5 Years of the investment journey was a bit slow.

I had to offload my commercial property in CBD, even though it has a good yield, it is dragging me to get more loans.

I sit with my broker and spend a lot of time to make sure, my application is structured correctly.

 

Sounds funny,

But, for investment-grade properties, you can show lot higher rental appraisals, than normal.

Outer suburbs or not good suburbs, if they think apprisal is out of whack, they tend to ignore the rental apprisal and take the standard rents applicable.

 

had to offload my commercial property in CBD, even though it has a good yield, it is dragging me to get more loans.
Were the commercial properties earning such a good yield they are begging for you to borrow more and buy more ?
I have had the bank at different times beg us to borrow more .
Other times forced me to repay

 

Amen

 

Thats great to hear it worked well for you

Bentleigh has been a star performer, the school zoning did this

 

What really bugs me is the term used here … accumulating phase…..grrrrr

 

lesson - public forums

never ever share too much information, like addresses.

 

I decide to stick to residential properties. non-investment grade properties might be giving me little cash flow. It's not helping my DTI and leverage on the commercial is bad.

 

Sat with multiple brokers - and whatever was done yield was unable to service the loans on its own hence I hit my serviceability walls. In saying that I got no issues with that and I just rinse and repeat. If youve done a few of these dev and holds then dev part should be a walk in the park for you

First few when its hard/stressful as your going through the learning phrase. After a while its like your half asleep, few clicks/and calls to people part of your network and a 6-24 months later (depends on the scale) done

 

A lot of developers like to rinse and repeat. It's their strategy.

I don't have enough knowledge of it. I hire a project manager to help me with the process.

It's a very efficient use of my time.

I might go to the site once in 3 months.

 

I don't even buy my own properties. I used a buyers agency.

Recently it took 2 days to hire a buyers agent and buy a property in auction.

The whole process was in 2 days time.

 

Last time I went only for handover (ended up staying a week and completed the finishes - more like a holiday for me)

Depends on what you do with your life
This is the closest thing to work for me and I love it

 

Again, with the 'investment grade' properties. Just because you buy in expensive areas, it doesn't mean you get better service or that it's a superior investment than elsewhere. It's just a fallacy made up by MY to get bums on seats in his business.

As I said earlier, I have no issue with someone investing wherever they want to invest, so long as it works for them......but labelling, maybe 95% of the investment properties in the country as 'non investment grade' means that you are basically telling most investors that their choice of investment is inferior to your own.

 

Yep, not a fan of that either. Even though retired, I'm still buying & selling. That term basically says that I'm going to buy x amount of properties & then sit back & do nothing, because I've already done my 'accumulating phase'.

 

Capital growth is meaningless if it's paper only.

 

I wouldn't exactly say its 'meaningless'. Having growth 'on paper' allows you to use the equity to build a portfolio, passively or actively. Eventually when you sell down/consolidate the assets to minimise/eliminate the debt, the capital growth part of the wealth becomes realised. You could say growth in all assets is generally 'meaningless' until realised. However the value of having the growth, even if just 'on paper' is actually massively meaningful. This is not even taking into account the rental returns of the 'paper growth'.