~1.1m budget in 2024, what would you do?

Hi all,

Given a ~1.1m budget (cash + borrowing + allowance for stamp/legals), how would you spend it on IPs in 2024?

The sub-500k landscape has changed dramatically within the past year and I believe it will go away soon - but while it is still realistic, options are to:

• buy 2x $500k properties in Perth, or
• buy 1 in Perth/Brisbane at ~$800k + renovate
• buy 1 in Mel/Bne/Syd at $900k-1m
• something else?

What would you do with the budget? Why and where?

Have fun with the poll!

 

$600k Perth, $400k Tsv

 

In my experience with Brisbane investors, if they have 2x the median property price in buying power then approximately 3/4 prefer two houses at median rather than one at twice median price in a higher quality area.

 

Frequent question that pops up and recently covered this on our IG:

1 x $1 million property:

✅ Allows you to buy a "premium" asset in a better area that's likely to experience growth aka 'blue chip'
✅ 'Easier' to manage - dealing with only 1 set of tenants
⚠️ More likely to be heavily negatively geared, and yield may not be great which means larger holding costs which add up long term
⚠️ Less diversification so if there are tenancy issues etc all your risk with equity/income/growth is sitting in only one basket.
⚠️ Less flexibility in selling as you cannot just sell half of it, meaning you'll incur CGT in full.


2 x $500K properties:
✅ Allows for diversification of property assets - it's unlikely that both properties will have the same issues at the same time
✅ Likely to have better cash flow and yield than option 1, which means much better chances of holding it longer term even if it doesn't grow for a while
✅ If bought well will have similar capital growth as option 1, and allow you to sell over different financial years for tax benefits
⚠️ More work: it will involve finding 2 deals vs 1, and increase amount of tenants to deal with.

At the end of the day, work out the numbers to determine if it's sustainable for you, you can then decide which option best suits you.

 

I like diversity, buy 1 quality property, buy 200k worth of ETF and make sure you leave enough cash flow to maximise your caps towards super.