Discussion in 'Investor Stories & Showcase' started by meme plecko, 23rd Jul, 2015.
Our first IP was a 2 bed unit in Kingsford across the street from the uni.
Picked it up for $415k in 2009 and immediately rented it out for $550. Decided to sell it in 2010 for $535k as it wasn't doing much for us.
With the profit of that bought a cottage in Rosebery off market for $550k and redeveloped it so it was well worth getting rid of that slow performing unit.
Although we didn't lose money on it, we try to stay away from units now and go for land with development potential instead to improve gains.
That 415k unit would be worth 750k plus today no?
Good one Jessproperty, a 120k gain in one year (or 29%) and that is not good enough for you?
Yep! And the house we built in Rosebery is conservatively worth $1.4mil+ today so with a build cost of $320k we have built up just that extra bit of equity that we wouldn't have gotten if we stuck with the unit
Don't forget stamp duty when buying and selling costs I think it worked out to be 90k but if you see a better opportunity you gotta go for it!
What did it cost to redevelop Rosebery? It has taken off because the pink dollar went there..
What is the pink dollar?? It cost us $320k in 2011 it was our first build...yeah timing was good as well, no one wanted to look past kensington but slowly they are learning!
Hahaa I just googled pink dollar...yes! And also people in units closer to beaches need more space so are moving to Rosebery Mascot Botany
Pink dollar = Gay dollar
Ok...so would have cost about 900k after stamps and holding costs....so a 500k profit.
Get with the program!
I bought an unit in Rochdale 7 Keats avenue, a 2 bedder in a huge complex with gym, pool, sauna etc. After 1 year, several hundreds of units were up near us. When we moved elsewhere and kept rockdale for IP, we had to drop rent to get tenants. We sold later just break even I think. Never unit in a big complex, ever again.
Yes, mum and dad investor special:
- we should buy something, everyone else is buying (fomo, top of the cycle)
- I like this one, nice and new (premium price)
- this area does not look crowded (too much available land, issues with oversupply later)
I can see many inexperienced buying exactly the same product.
Thanks for sharing @HUGH72
Dog box in parramatta area. Rushed purchase 1970s old style unit. Poor quality building, strata in the red and tenant did a runner after the first 3 months, major issues with the property manager. Bought for $200K sold for $240K 2 years later so no financial disaster. 6 years on this unit in the same crappy condition would be around low $400K and a 10% yield on purchase price.
Even lemons can taste sweet over time.
Agree. At least you've learned your lesson.
It still amazes me how many people look at buying a unit in a massive complex of hundreds of units with 5-10k a year strata and think it will be a good investment.
Ive sold a ppor to upgrade in 2003.
Yes @Leo2413 good lesson indeed. This was back in 2013... And we.worked hard to pay off a townhouse and big mistake. But we bought well last year and thanks to market.forces and we have a healthy equity. Now, learning as much before giving IP another go.
Edge Hill, Cairns. 3/1/2 on a big block
Bought at the peak in about 2007, overpaid (by maybe as much as 10%)
Its worth about the same as when i bought it.
Negatively geared the entire time, no rent rises since purchase.
Lots of repairs.
I'd love to see the back of it, but its not a bad house for a rental, and it's in a good suburb. But its been a hell of a long wait for some CG.
@larrylarry Just out of curiosity, why did you buy and sell the Rockdale unit and what was the buying/selling price? I agree that huge complex is not good to buy but just a bit surprise that it just break even.
The holding costs were too high for us with high interest rate (8 or 9%) and salaries weren't great then. I think we sold for $350k? Mind you we bought another place in Dundas which we sold well last year to upgrade to a house. A lot of investors in that complex and when we wanted to rent out, there were another 10-15 competing. NOt only that, another 3 new blocks were being built. We decided to cut the loss and move on.
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