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Discussion in 'Where to Buy' started by MelbInvester, 18th Jul, 2015.

  1. MelbInvester

    MelbInvester Active Member

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    Hi Guys,

    Need your opinion regarding below.

    • I have few IPs and paying 5K land tax and buying one more paying up to 10K
    • All the IP's are in VIC
    • I can barrow 600 K ( Got the pre approval)

    so would i buy something in QLD or Melb unit?

    MI
     
  2. HUGH72

    HUGH72 Well-Known Member

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    Diversify, then when one city isn't growing somewhere else always is. Then you will be less likely to runout of available equity and your asset base is always growing.
    Obviously you can also limit Land tax liability, that's what I'm doing.
    For 600k you could also buy 2 in Adelaide or 2 cheapies in BN or 1 in each location.
     
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  3. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Agree with Hugh, diversify. Having IPs in multiple states exposes us to different cycles all happening at the same time. Our equity at least somewhere should be growing, allowing us to keep expanding and not being stagnant for a period of time (serviceability pending) It also mitigates concentration risk.
     
  4. Rockstar

    Rockstar Well-Known Member

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    For some reason I wouldn't feel comfortable investing outside my territory. I've done very well staying within my comfort zone despite being regularly liable for land tax bills. I know my market very well so every purchase is based on a great deal of experience and familiarity. I am developing as well as investing so my situation is a bit different from others.
    What do you feel more comfortable doing?
     
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  5. Hodor

    Hodor Well-Known Member

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    +1
     
  6. C-mac

    C-mac Well-Known Member

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    My two cents; it doesn't have to be QLD, but diversification is a wise move for any portfolio. VIC presents some great metro and regional opportunities; but it is always worth considering options outside of your own state.
     
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  7. Hodge

    Hodge Well-Known Member

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    I'd kill for a $10k land tax bill! These days I'm too scared to open the bill.
     
  8. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    If you pay an additional 5k pa land tax but make $100k pa capital growth, its not a bad ROI.

    Invest where it makes sense to invest
     
  9. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I have a few IPs in Sydney and am now buying in Bris. It makes sense for a few reasons:
    1. My Sydney stuff has grown well and it's had a strong run so it will run out of steam at some point.
    2. Diversifying interstate into a market that is showing good signs of future growth is a fair idea for many reasons--spreading risk, potential for one market to be moving while the other is flat, and the icing on the cake are the state-based land tax thresholds but that's not a reason for investing in another state. Land tax is a cost of doing business.

    I vomited a little at bold. There are oversupply issues. Significantly so around Docklands, Southbank which affect other areas due to prices and rents being soft in the CBD.
     
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  10. OC1

    OC1 Well-Known Member

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    What are you assuming a UNIT means it's inner city/CBD?
     
  11. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    No.

    But if units in the CBD are cheap to buy and rent, that has an impact on units elsewhere.

    "Why rent/buy 10km out of the city when it's not much more to rent/buy smack-bang in the city.?"

    And the further you go from the CBD, the less people want units.

    To clarify, I'm sure some investors might do ok with some units in some parts of Melbourne but Melb units would be near the bottom of my list of stock to buy in a major capital at the moment due to the ridiculous number of completed, commenced and approved stock vs population growth.
     
  12. OC1

    OC1 Well-Known Member

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    My units have done great in the last 2 years. Are you sure you aren't confusing units with apartments? You don't sound like you have the complete picture and regurgitating what you see in the media.
     
  13. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Actually, you're right. I am using the term "unit" interchangeably with "apartment".
     
  14. OC1

    OC1 Well-Known Member

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    Different thing here in VIC. Inner city apartments you are correct. OP mentions unit which would typically be in the suburbs. :)
     
  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    I feel...enlightened.

    :)