Your worst IP purchase

@Northy85 don't worry mate, I've purchased a premium report from Todd Hunter (Buyers Agent) and he mentioned that it is the good location now to buy, because it is starting to picking up the pace.

Ormeau and Upper Coomera is the way to go now for buying at the bottom of the market and then wait for CG to kick in after 5-10 years.

 

Hi Tekoz
I have had a bank valuation recently confirming this and I occasionally look at sold prices in the area.
Hugh.

 

My "worst" IP has only gone up by about 30k in 3 years (NSW regional). But its paying its own way and is CF+ so who cares.

 

@HUGH72
Cool, so it is no longer becoming worse for you. Hopefully in the next 5-10 years Redbank Plains becomes blue chip.

 

That might be pushing it but as long as the rent keeps rising I'll be happy.

 

@Tekoz, what was your worst IP purchase so far?

 

Worst purchase was a unit in Mandurah. Bought for $206,000 (2003), sold for $257,000 (2013).
What was wrong with it:
- low capital growth area
- low rental returns
- strata manager very difficult to deal with
- trouble finding tenants

It took me 5 years to realise I had bought a lemon. By then the property market in the area had collapsed, so I waited until a good time to sell and sold.

 

@meme plecko yes, so far the worst one is doing-nothing just makes it worse ...

I'll wait until 2016 when the interest rate is increased by RBA then buy in QLD area within Brisbane-Ipswich region.

With just $300k cannot buy any decent CF+ house except... you know the Park Ridge H&L Package which was rejected by my lender.

 

Do you have cash to add to the $300k? Buy an older house or unit in good areas. Stop chasing H and L.

 

Me too Except I paid $240k and decided to cut my losses and sold for $205k. It was supposed to be a future deve block, but it was costing a bomb in maintenance and hard to find tenants etc so I had two options: continue to sink money into it hoping for eventual cg or, painful as it was, crystallise the loss and move on.

The annoying thing is I did a lot of research... but it was all in the details. Couldn't see the forest for the trees. Lesson learned. Next time, pay attention to what's happening at a macro level first. If I did this back then, I would have bought in Sydney and not had such a huge opportunity cost.

 

What part of Rocky?

 

Berserker. A block away from Stockland.

 

It depends on the size of the mortgage repayments, the age of the property, your ability to handle stress, and how much you earn via other means (eg your job) to build the size of the slushy fund. Around $10k per property is the norm, however something with less mortgage repayment burden might not require such a large slushy fund.

 

For me just old homes that needs constant repairs. Its like a kinder surprise moment whenever I receive an email from the agent. It really feels like a blood hemorrhage on the cash flow but sure its going to be ok in the near future.

 

A tenanted old house= just like a box of chocolates.

 

I haven't had anything that doesn't make positive returns. Although some make less than others so I'd consider them poor investments.

One such lesser performing property is also the subject of JV dispute, which is quite bizarre for such a simple investment. Another, which I recently sold, barely registered over 50% cap gains over 5 years which is quite poor also. These two are probably the worst. Of course, with high leverage, even a 50% return can translate into multiples of your initial capital. But with leverage also comes much higher risk.

 

I hear you. It's not so much the loss as the opportunity cost. I wish I knew then (in 2011) what I knew then. Wouldn't have bought a report from Terry Ryder and bought a place that is now worth a bit less than I paid for it when I could have made a motza just by adding a property in Sydney.

I'm hoping to be able to sell it next year but still not a good time atm. Most annoying thing is that it's gone from CF neutral to negative due to drop in rent.

 

not 100% happy with the country stuff we own, great learning experience but not particularly useful right now, would be better in 10 years when we have excess cash we need to park, the % return is good but the CG is rubbish.

although thanks to recent lending in someways a lot of our investments are annoying as although we are CF + by a decent margin and ok in cash, we can't get our own house.

 

Don't wait too long, you don't want to find that prices have moved and you can no longer afford a decent property.

 

Why do you want to wait until IR rises?