Anyone changing strategy???

Though I haven’t put this into practice, the idea of buying for cashflow during a boom and buying for capital growth during a period of stagnation somehow appeals to me.

It also ensures comparatively high returns (as you’re never buying properties returning 3-4%).

Peter

I’m still looking to buy, although I’m extremely fussy about what I buy, and always set a realistic price limit on what I’m prepared to offer.

But I have to admit, it is very hard to find a property where the vendors don’t expect to get $20 to $30K more than the market price.

Hello all,

My strategy is something like this.
I own my home outright so I have no personal debt.
I have 4 Brisbane CBD houses bought over the last 4 years which create a nuetrally geared portfolio with significant equity already. These properties where purchased with capital gain focus.I believe their value will double by 2010 creating equity of $800,000 to $[8D]1,000,000.
So, now my focus is to by come cash positive property so in 2010 I can use the equity to wipe out the debt on the positive cashflow properties
and therefore own outright the high yielding properties
Hope that make sense?
I am wanting to by Commercial property for my cash flow positive property rather than houses so there are less titles to manage.
Feel free to pick the eyeballs out of my strategy.

MJK[8D]

I would agree in principle with the old adage
” never sell” but after being in the game for a while one realises that sometimes there is a right time to sell. Often capital growth exceeds rental growth and transferance of equity into high yeild is a reasonable solution provided it ends up meeting your requirements.
Debt reduction through capital gain is viable. The mistake most novice investors make is selling too soon.
One could argue that you use equity to buy more property without selling, but you cant eat equity can you. Capital growth investors must consider income at some stage to achieve their purpose for investing.

MJK

I am definitely with you on that one Harold.

Hey Maximus

I think its fair to say that at least in inner Melbourne and Sydney (maybe Brisbane), some ‘corrections’ are in order. House prices have rose quicker than income. There will be some pain and desperation as interest rates firm.

Ideally, assemble some cash or even borrowability to make some low ‘cash’ offers to desperate people holding quality assets. ‘Vulture’fund.

Hey all. Hope everyone is well.

Over this past year I have tried most strategies. Lucky for me they have been successful but I still find that the most powerful amongst them all is Cashflow. I bought properties for cashflow that have gone up significantly so I have cashed a few in and even though I will face CGT the end situation will be tht I own my PPOR (home). I see that as a great move as it allows me to have an excellent base for buying when opportunities present themselves.

I am still actively hunting Cashflow deals and also looking for Reno’s to cash and debt reduce.

I figure it doesn’t matter what strategy you use as long as it takes you closer to your end goal. So when I sell a house I reduce debt on the portfolio. This has been extremely successful in one year where I see my nett wealth has gone up significantly.

In conclusion I still believe Cashflow is king. I can do unlimited deals as long as I buy for cashflow. When I accompany that with reno and sell that sees a debt reduction plan kick in. Paired I have found them excellent tools for me. I cannot argue that my relationship with one agent has made this process very profitable and given me a new friend to boot.

I must admit though that I am also thinking about firing up the Wrap machine again (or maybe Licence to Occupy).

Changing times changing tools.

Enjoy
AD [:0)]
(Andrew)

“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”

Hey Marty,
The Key for me is the fact that there is no right or worng way to do proprety. There are two factors that decide for me. What I am comfortable with and what the market is allowing me to do.

There are so many ways to make a dollar in the RE Market I wanted to try them to see what worked well for me. I see the differnet approach as tools in my belt. Sometimes I need a hammer and sometimes I may need a screwdriver. If I understand the different methods then that allows me to continue investing no matter what the market is doing.

The more tools the more options.

Hope this helps.

Enjoy
AD [:0)]
(Andrew)

“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.”