Hi guys,
Very quick question about benchmarking performance in the real estate market.
Let’s say I had 100K to invest in Jan 2005 in the real estate market. Looking back on the past 5+ years, what return on that investment would you be happy with today? 150K? 200K? 300K? etc. So, let’s say you cleared outsold all investment today, and are looking at strict cash current day. What amount of money would you be happy with today if you invested 100K in Jan 2005? Also, what would you be unhappy with?
Thanks guys.
What a difficult question to answer…
Assuming no costs to acquire the assets and appreciation of proeprty value only, then I'd be looking at a compounding return of 12%p.a, which equates to a $77K return, but in the Melbourne market we've seen properties double in value in 3 years, so it always comes down to good asset selection…
I'd be unhappy with anything that doesn't at least match the average for that city, our Melbourne property radar went from $411K in March 2005 to $702K in March 2010 which is a 11.28% compunding return or $70K.
Intrerestingly the All Ords from March 2005 got to that level in 2 years, but…
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