Hi
I currently own 4 rental properties in the western suburbs of sydney totalling around 1.1million dollars.
I owe the bank 305k on these properties and have been informed by the bank that I can borrow around 800k using the equity in these properties.
My dilema is that i know I should be using this equity to buy more property but which should i choose? Suburbs with low capital gain and higher rental yeilds as I have now, or use the equity to buy into the unit market in the inner city and eastern suburbs where there are apparently much higher capital gains.
Does anybody have an idea what this unit market in Sydneys eastern and inner suburbs is doing at present? Is it clmbing, shrinking etc and is it a good or bad time to be moving into this market.
Any advice would be greatly appreciated and many thanks in advance.
MJIf you are thinking about investing in the Eastern inner Suburbs places like Alexander and Green Square, I believe are starting to shrink in value. The whole sydney market, in my oppinion only, is seeing a fall or stagnet in price.
Alexander is currently over developed. This can be seen by high vacencies and falling rent prices. Terraces that were renting 1 year ago was renting for $550/week. That exact same terrace is now on the market for $380/week and 4 weeks later its still on the market.
A quick question for you to help you make up your own mind.
1. With the four rental properties, how much time have you put into the management of these properties.
2. Are you still working?
a. If you are still working, do you enjoy going to work? and do you hate your boss?
b. Would you rather be working than spending time with you family or be lazing around the beach?
If your answer to the first question is not much time and the answer to question to answer 2 is I hate my boss, he/she is driving me insane and I want to kill him or I don’t have enough time to spend time with my loved ones – then you have to ask yourself what can I do with this 800k to help me achive these.
What I would do is try and establish an investment portfolio to help subsidise my pay packet. Once I am nolonger in need of the pay packet I can either tell my boss to stick it or to quit my job and spend more time with the family.
If you ask youself this question evertime you purchase an investment and you weigh up all the pros and cons, your investment strat will become alot clearer.
What do I gain for a “potential” capital gain – notice it is not a sure thing yet. Some people call it buy and prey strat. and in the meantime I still have to go to work everyday and put up with all that garbage that happens at work for the next how every many years. or
I can convert this equity into something that will produce x amount of dollars for the rest of my life nomatter what I do, and it will still rise in value with the market.
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