Interesting was an article in Money magazine July issue, writen by Terry Ryder, entitled “Just add water”. The article discusses the superior appreciation in properties with water frontage, or water views. The article states that properties with these characteristics also re more resilient in market downturns.
An excellent example is found in Sydney, where prices have appreciated around 8.5% over 10 years, however the appreciation over the same period for the Northern and Southern beaches in Syndey, is 16% and 13% respectively.
Of course the difficulty of acquiring such property is the entry price. Has anyone used this particularly strategy of acquiring property with water views and/or frontage in their property portfolio?Yes, we picked up a very average 3×1 on a good chunk of riverfront property for a modest price. The title is affected by a restrictive height covenant (crippling it by about ~ 300K), but we didn’t pay for any of it, and went into the deal with our eyes wide open. Town planners reckon it’ll cost about 60K to have a crack at removing it, but there is no guarantee of success, as it is totally up to the two props at the rear, who obviously want to keep the front house low.
It’s very cashflow negative, so much so that it was the last RIP we ever bought. Total cost of ownership is about 83K p.a. before tax, yet it only generates 18K p.a. in rent. Need about 3.8% p.a. growth to break even financially (after tax).
The house was worth 150K in ’84 and 20 yrs later we picked it up for 925K…9.51% p.a. compounded annually.
Anyway, it’s in a good pozzy, and earmarked for a house for the kids to go in and manage when we kick them out of home when they turn 18. None of this “stay at home ’til I’m 30 to save money” horse twaddle in our household.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi mgs2,
Great info, thanks.
Dazz,
Entertainment plus.
Water hugh !!!!!!!!
Another well engineered deal.
So by my calculations your $925K property bought in 04 could be worth $3.7 M in 15 years.WOW !!!!!
Hey mate your not serious about kicking your kids out when they are 18 ?
Gotta find some water!!![snorkle]
hrm
Hugh,
Absolutely. Wife is all for it..no obstacles from me.
It doesn’t infer we are going to abandon them, but it does mean they’ll be going through a few of the hard knocks to toughen them up a bit. I find the city kids growing up now are complete Nancies and wouldn’t know hard work if it bit them on the bum.
One things for sure, we won’t be molly-coddling them ’til they are 30 still studying for their 3rd PhD.
Might start a thread on it actually.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Becareful they aren’t foolishly leaping into the drugs and alcohol at that age though. The IP could become a big party.
The house I’m living it at the moment backs straight onto the swan river and has nice jetty. Its owned by my parents and they are the cost of basic new car from paying it off.
I hear it goes up about 50k a year but if its gets rezoned to R40 its going to go up much more than that.
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