Investing $500K cash in Melbourne property

Investing Golden Rule #1
What are you trying to achieve?

Seriously, unless you give some information about what you would like to achieve from investing in property, then there’s really no way to recommend a strategy to achieve it.

Keep smiling
Felicity

As Felicity says…what are you trying to achieve?

If it is what most people wnat out of property..financial freedom, extra wealth, security, income etc then it is not really the properties you are after but the money that they can give you.

Property investors are really in the business of finance not property.

You can achieve this in 2 ways.

High cashflow/ low capital growth properties or high capital growth/lower return properties.

Many beginning investors start with cahsflow properties because that is all they can afford.

With $500k you can jump straight to the higher level of high growth properties.

It is a buyer’s market in Melbourne at present (we have already bought 3 investment properties for clients this week [url]www.buyingmelbourne.com.au[/url]

But you must do your research carefully and choose areas with strong capital growth and then choose the appropriate property in that area.

Our research has identified a number of suburbs that will outperform Melbourne’s average capital growth by 100% (OK …..not to hard when the average growth won’t be great in the next 2 years..but better than nothing)

We are buying properties in areas that are still increasing in value by 10% per annum.

Do your due dilligence, look at lots of properties, make some cheeky offers, don’t rush in and look for properties with a “twist.” Properties that you can add some value to and get quick capital gains.

If you are able to do this on your own and have the ability to do this for your first investment then great. Go for it.

If not, get an experienced buyers advocate who understands investments to assist you. They will be worth their fee many times over

Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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392649
think I saw your posting on another website. You need a better defined goal than just wealth creation. Do some investing in investment books first. Steve’s books are a good place to start, then you can better define what you want to do with your cash. Don’t just rush out and buy property. You need to know what to do with it once you have purchased it, and you need to know where your profit will come from.

Jules

Hi 39,

There are a number of ways that you can spend your $500K – where to best direct this is going to be determined by your personal presferences for cashflow or growth or a combination thereof.

As a broadbrushed statement if you are seeking cashflow from your investments then you will need to consider the strong possibility of buying out of Melbourne or, at best, spending considerable time looking closer to Melbourne and finding the property that has an untapped capacity that gives a better cashflow.

Alternatively you may prefer to adopt a longer term view and buy for growth. In this case you would need to see where you can best use your $500K. Look for something that has a consistent growth history and is as close to the city as you can comfortably afford and hold.

Now as to the question of how much to invest. Once again this will be largely determined by your goals, risk tolerance levels, income level, short and lng term needs and ultimately how the properties will help fund your later life. The answers to these questions will help you to fine tune what you could and should buy.

Depending upon whether or not your $500K is cash or borrowing capacity also has an impact on which course of action is best for you and what sort of leveraging levels you use, where you buy, whether it is single or multiple properties and so.

Given this will be your first property there are certain advantages to buying something close to home – but do not be seduced into buying close to home because it is close to home. Buy there by all means but make sure you make an investment decision and not a decision with your heart.

Similarly if your risk tolerance allows it do not necessarily confine yourself to your own area – unless it is a sound investment decision.

Hope this helps.

Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958