Hi Guys, Looking for advice on where to spend $600,000 to create an income. I had my own company and good income and a collection of houses on blocks that I subdivided, Since 2007, I lost my company and over the last few years have been selling of the properties to consolidate, to enable me to start again. Bought a block of units which needed strata tile , good project but profit average . Might be too late for USA high yields but the capital growth looks good along with the expected decline in the Aus dollar, too high at the moment. Not expecting Aus properties to have the growth, we've seen in the last 20 yrs. Would love to get some feedback. Cheers
Hi Rob,
Given you have experience with sub-dividing & developments I would go that way again.
Start small and build up rather than trying for the 'kill-shot' with your first (second time around) effort.
My thoughts FWIW
Aussie properties is way too broad an area to be that specific.
There are separate markets in every suburb. Some will progress quite nicely and others will remain stagnant. I have invested well at a 60% return in a single year where the margin of growth on the suburb was listed by the newspaper at close enough to 4% for the year. So it still comes down to purchasing the right sort of property .. and doing the right things with it.
Rob .. from someone who fell on his sword once (i.e. went bust) .. i'll say what needs to be said.
Take the sword out of your body .. wipe off the blood .. and get on with it. No excuses.
Grab your car .. and drive around .. get a feed .. a smell for where the action is. For example .. I know that Richmond here is suffering badly .. and Bridge St Richmond has more FOR LEASE signs than working shops. But Knox is up and lively, and Box Hill is going gangbusters. Dont assume that because one area dies off that all areas are bad.
The point I will make is recognise the opportunity and make the most of it. There will be areas of Melbourne where oversaturation will take place. There are also areas that desperately NEED cheaper housing, at whatever price it will be.
Your aim is to know your market and from that market knowledge and knowing the existing framework, be able to profit from that knowhow. Unless you are a bookworm and are prepared to sit down and understand US markets completely .. these are the skills that are lacking in testing overseas markets. I've done that now on five or six occasions so as to make my investing work. And if you feel you are up to that kind of task .. go ahead and do it.
The one thing I would recommend with doing any overseas investing is create trusted local partnerships. Both for property management and for ongoing property reporting (a local mailing address). There are areas in any country where corruption based in and around property are rife. You either listen to a local or learn from experience. And experience says to employ a local as part of your team.
Thanks Derek and Xdrew,
The subdividing I did in WA certainly was profitable and I found little resistance from councils.
In NSW at the moment doing a strata, so returning to Perth is not out of the question.
You are right Xdrew, I am eager to claw back to where I was and in doing so could possibly put me at greater risk, with an area that I'm not an expert in.
Rob .. from someone who fell on his sword once (i.e. went bust) .. i'll say what needs to be said.
Take the sword out of your body .. wipe off the blood .. and get on with it. No excuses.
Thank you for the kick up the butt, this is why I follow this forum.
Its great to get direct feedback from people who have been in similar situations
If the development deals were profitable then that's an obvious choice as pointed out
Depends what sort of an income you need as well, presumably if you are looking with a longer investing time frame and talking 20%+ p/a returns then it's going to have to be value adding or business of some kind. Not a bad place to be starting from anyway if it's somewhere between 0 and a +600k net position.
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