All Topics / Help Needed! / sub divide or buy???

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  • Profile photo of troy6225troy6225
    Participant
    @troy6225
    Join Date: 2010
    Post Count: 26
    August 22, 2010 - 8:42 am

    Hi all,

    Here is my situation me and my partner have PPROP on five acre block, value 520k with about 200k equity.
     What i want to know is should we sub divide and build or should we concentrate on buying.
    This will be our first IP.

    Thanks

    Profile photo of wobbiewobbie
    Member
    @wobbie
    Join Date: 2008
    Post Count: 14
    August 22, 2010 - 10:29 am

    Hi troy6225

    You need to number crunch to work out your ROI {return on investment} this will tell you if this is more viable or purchasing another property is more viable. Then you need to work out your goals:

    • are you accruing property,
    • are you looking for capital growth depending upon your income,
    • are you looking for cash flow property?

    A good balance is 1 for capital growth then 1 for cash flow, then go again. This way the banks should keep lending and not stop you on servicablity providing the properties are simular in value.

    You could buy the next one if you can afford it then come back and develop the first especially if you are looking for your next purchase in an area that is currently flat or looking to purchase a cash flow positive property. Once again your personal situation should tell you this or at least your accountant.

    Profile photo of troy6225troy6225
    Participant
    @troy6225
    Join Date: 2010
    Post Count: 26
    August 23, 2010 - 9:16 am

    Thanks Wobbie

    does anyone know good accountant in geelong area?

Viewing 3 posts - 1 through 3 (of 3 total)

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