Hi All,
For those who have more than 2 IP’s do you think that it is more of a risk to buy them in the same area? I am looking at buying between 3-5 IP’s but am not sure whether I should focus on one place or buy in a multitude of places. I can see the downside for both.
I realise maintaining IP’s in the same location will be much easier but if the area goes downhill then I would risk losing a lot of money by having them all in a depreciating place. I am going to do as much research on locations as possible but you can’t really predict whats going to happen 5 years down the track. Thats the nature of life. So, I am wondering what is the best way to go.
Any ideas,
Rachel.
In the latest property Investor magazine their is a lady with 20+ properties mostly in one suburb.
Dom[specool]Hi Rachel77,
If you had asked me that question 6 months ago, I would have said, invest in the area that you live in.
Of course investing in Melbourne is a much larger choice than if you were living in a regional centre.
However, with technology, it is much easier and less costly to research and invest in other states or regions (even countries eg NZ). It is initially a leap of faith, well it was for me.
I decided to purchase in QLd, because of the fact that the market and opportunities for growth were more favourably than Melbourne. The business case dictated to me where I should be investing next. If the numbers/property intelligence was pointing me in the direction of Melbourne, Sydney or Broken Hill for that matter, then I would do that and be much more comfortable in doing that today.
James
Rachel,
There is an advantage of buying properties in different state. First you just got to take a look at the land tax threshold to find out how much it is in each state. Then you buy property up to the threshold limit and move on to the next state.
By doing this you will save money by not paying land tax, but if there are opportunity that you can’t avoid (ie. go growth areas, +ve gearing….) then you got no choice and have to pay land tax.
Managing property closing to where you live sometime is a nightmare. The agents will call you regularly if there is a problems.
Where as your investment property at the interstate then you don’t have to worry about and just sent the tradesmand to do the work, but it is costly tho…if it is a small problems that you can actually fix it yourself.
Kind regards
Chan Dollars
[Retire Young, Retire Rich] [strum]Hi Rachel77
I just look at the obvious which has been stated a number of times on this forum.I feel comfortable buying in areas which are good infrastructure, schools, transport etc. and if you are near a beach it is a bonus.
With the properties I have purchased to date this seems to work if you are looking at capital gains, which is what I tend to go for…
Good luck[biggrin][biggrin]
Rachel :o)
Buy 5 IP’s in 1 town? Or buy 1 IP in 5 towns? I can give you a definitive answer on this – from what *I* would do.
If the fundamentals add up- immigration trends, indutry/employment, population stability, tenant demand, any special/unique features (natural resources, views, coastal, rainforest, a big banana), etc etc etc…
Plus your own aims/goals/affordability/ etc etc etc add up… then I cannot see any great reason to avoid buying up in one place. It really depends on where you’re looking. Five places in Kangaroo Valley, NSW? Sure, go for it! It all depends on the research you’ve done on the place.
One thing’s for sure… if you do comprehensive research on the place (look up google.com.au and type in the place name and read EVERY link you can about EVERYTHING) then you can become an expert on that particular town/city. Knowing your market can’t be underestimated as an investor.
Sounds like you are a bit worried about the location? That’s a different story. Perhaps best to buy in a few areas you feel safer with, than in one town you are scared might die.
kay henry
R77
They say most people buy in thier local area, and that’s why many Real estate Agent’s ‘drop’ the flyers in your letterbox regarding a property for sale in your area, after all, you live there , feel comfortable there etc..
Or you may have friends or family that also like the area and want to move there..
It’s harder to get out of your ‘comfort’ zone and invest in an area you don’t know too well, it’s a bit scary and the further the distance the greater the fear ( you can’t see or drive past it ) however , over time this fear abates ( having said this the furtherest i’ve bought to date was about 4 000km away )
But remember your local area may be experiencing a downturn, whilst another suburb in another area, may be experiencing it’s best growth in decades due to new industry or such moving in..
Think of the Lotto add with the guy fishing in the river with about 50 lines in the water, improves your chances of catching a fish, but inmagine if you had 50 lines in different parts of the river, or even in other rivers.. would you feel more confident of catching some fish now than the guy sitting on the sandbank with a handline..[biggrin]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Originally posted by daaj10242:In the latest property Investor magazine their is a lady with 20+ properties mostly in one suburb.
Dom[specool]Actually, if you are talking about me, half the houses are 30km’s from Brisbane CBD and the other half are 300km’s from Brisbane CBD.
The first half were bought for capital growth, (some have since doubled and some tripled in value). The other half were bought solely for cashflow, and I’m not really expecting much capital growth from those.
After a boom like we’ve just had, equity is not a problem for us anymore. It’s the servicing of loans or cashflow which is where we must keep our attention.
It is best to have a balance of growth investments as well as cashflow ones.
Cheers Brenda[sunny]
If you want to get out of a hole, first stop digging.
I subscribe to the theory that minimises the eggs in one basket. Technology (and cheap flights) make proximity to home a non-issue for me.
Thanks everyone,
I can’t really afford to buy in my local area…prices too expensice (Blue Mountains) and definitely way -gve. At this stage I am looking at regional areas and NZ. I think once I have made my first purchase I will feel a bit better about the next one. It’s scary though!!!
I am looking at both +ve and -ve properties for balance and growth opprtunities. I’m very excited about it all but also a little worried about making a mistake.
I appreciate all your advice, hopefully I will make the right decision and start towards a future of financial frredom.
Rachel[biggrin]
Rachel,
Buy your first before you worry about buying 5! :o) Then chill out a few months and you’ll find it all slips into place. If your first stresses you, imagine what 5 could do!! Ya don’t have to do it all at once- takes a while to build an empire :o) even took God 7 days.
kay henry
wasn’t that 6 and rested on the sabbath?
did I spell that right?[eh]-but look what he created!
sorry ok away from religion, not meaning to offend anyone here[wiseguy]
It is tempting to get into it, but start off with the one, then let anything else flow. First isnt always the hardest either
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