And that is exactly why lenders don’t want to touch them. Cash flow return for lender’s is not a risk mitigant that they care about – if they foreclose they need the property to sell, not rent out.

Limited capital growth potential. If lenders don’t want to lend you money to buy them – it shows you how risky they view the investment. Let’s not forget they’ll happily lend on a lot of subpar investments, so you have to ask how bad the modelled results are for these types of specialised security.

If you’re purely focusing on yield at the expense of all else – there’s still mainstream residential properties with similar yields and capital growth potential, outer suburbs of Adelaide etc.

Else there’s other asset classes which provide the same yield and once again growth.

Consider that its gross yield, by the time you pay out strata fees,…[Read more]

There’s a reason why they’re cheap. Low if any capital growth (hence why they are cheap, they’ve been cheap forever and a day). Lenders also restrict their lending with them, which is always a poor sign as it limits the buyer pool, reducing competition for the values to rise.

They’re generally a joke amongst most serious investors as one of the…[Read more]

Dean – as above, it comes down to the local currency inflation rate. ANZ is lending in Singapore in the local currency and profiting on the margin between cost of funding and sale price. Cost of funding will not drop below the underlying inflation rate unless for distortion reasons (happened for a while with USD borrowings when EU funds were happy…[Read more]

Why do people lend money to others? For profit. You’re not going to lend out (especially at a fixed rate return) for a negative return (below inflation). There are some market distortions where this might happen, but for the most part this is the reality.

Effectively there is a margin between inflation and rate being offered – then lumber on the…[Read more]

Smart move Bjoern from the sounds of it. Never work with pushy people who are effectively trying to put on high pressure sales. As you’ve noted, investment companies which solely focus on new developments are working for the interests of selling their stock for developer commissions – which fundamentally puts their bias on pushing stock, not you…[Read more]

Welcome to the forums. :)

Welcome to the forums. :)

Consider an offset account just the same as a normal bank account – the only difference is you save on interest, than get paid it.

A REDRAW account is very different however – do not place funds in and out of there without understanding exactly what you’re doing. Every time you draw from a redraw account the ATO considers this ‘new’ borrowings -…[Read more]

Every council is different – no one can give you that advice without knowing any of the specific details and even then it’s unlikely anyone here will know the specific ins and outs for that council and neighbourhood zoning.

Speak with a local townplanner or surveyor who will let you know. As others have mentioned, with next door being developed…[Read more]

Their currency is currently in deflation – it’s all just about margins.

3.35% margin between that fixed rate in the current inflation rate.

Australia has circa 2.8% margin between underlying inflation rate and comparable five year fix.

Their currency is currently in deflation – it’s all just about margins.

3.35% margin between that fixed rate in the current inflation rate.

Australia has circa 2.8% margin between underflying inflation rate and comparable five year fix.

It’s an area we’re seeing more and more clients looking towards. Deception Bay/Clontarf/Kippa-Ring in general, a bit of a swing in investor interest compared to Logan and surrounds which was the flavour of the month for the last three years.

What to do? Time to get another accountant.

Generally I find they’re not the best bunch for investment advice – very conservative and not very forward looking. Not their job to provide investment advice in any case, that’s the realm of financial advisers.

Instead of buying a dud investment in an area with ongoing supply issues which will plague any values – why not just rent there for the girls? It’ll work out cheaper and not require her to invest in a subpar area.

Hey Jono,

David Traeger on this forums is an active Adelaide investor and property manager – well worth having a chat with. You’ll find us Adelaide investors usually catch up once a month or so for a dinner at one of the pubs in the CBD, you should definitely come along to the next one.

Details for meetups are usually posted in this thread:…[Read more]