Hi all, I have been spending months trying to learn as much as I can about investment before purchasing our first IP. However I am just a bit confused about CG. Our plan is to buy IP and continue to rent. For our personal circumstances and plan going forward we are looking to buy <450k within 20km of Brisbane CBD, with balanced RY and CG with the second purchase within 12mths.
I understand that to continue purchasing IP it is important to have CG whether through market demand or through value adding strategies. However every thing I have been reading regarding researching target areas talks about buying into areas of consistently good or outperforming growth over the longer term (10 yrs). I am confused about what figure this is supposed to be as a benchmark? what percentage of capital growth suggests long term stability in an area?Thanks
use the rule of 72. judge what you think is a good return on investment. say 6%. say your property is valued in today’s numbers, say $500K. 72/6 = 12(years). this is the amount of time it is envisaged for your property to double.
Noel Whitaker, a columnist in the Age, is good at explaining this. Google/look him up.
cheers
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