Tagged: investment advise
- September 6, 2020 at 9:08 pm #25957
Hi all. Hypothetically speaking, if I had 800K to invest. Would it be better to buy 1 property worth 800K in high capital growth location or 3 properties worth around 270K each?
- September 7, 2020 at 4:23 pm #25968investingmeParticipant
It really depends what your after and long term goals. Depending where you buy the $800k one might get you into a better location.
However the 3x $270k properties would probably get you better yields, lower risk as you have diversification and 3 assets going up in value as apposed to one.
On the other hand 3x $270k properties while the cashflow may be good you could be compromising on location or quality of asset and hence capital growth.
If it was up to me, I would say 2x $400k properties followed by $800k.
- September 21, 2020 at 12:53 pm #26099Jack MParticipant
Depends on location, property type and return. There are too many variables to consider, but aiming for a median house price (or just below) generally should give you better returns.
- September 21, 2020 at 1:20 pm #26102end_of_cosmosParticipant
There are too many variables to consider but if your strategies involve mitigating risk, I would personally not put all of my eggs in the one basked and would diversify by buying more than one property in a different location. This would be a strategy of a long-term investor. If your investment window is short to medium term, buying one property that is positioned for substantial capital growth could be the way to go but personally I am always concerned about placing all of my bets on the one horse so top speak.
- September 21, 2020 at 4:12 pm #26106
Thanks everyone for your answers. It looks like all agree that risk reduction is key.
So let’s assume 270K property to start with. What locations would you recommend? The strategy would be to buy the second one in 2 years and the 3rd one in 5.
- September 21, 2020 at 4:21 pm #26108end_of_cosmosParticipant
Somewhere in Tasmania..
- September 22, 2020 at 7:57 am #26111menotyouParticipant
end_of_consmos, I would not say Tasmania is the right place to invest in given rental demand. I guess this would have to be vetted with a search but given these uncertain times, I would rather search for large population areas that have a lower median value—maybe somewhere in Queensland. This way there is a reduced risk that the property will remain vacant for longer than necessary (rule of thumb should be two weeks annually).
Iam TheState, I am not sure why you chose to outline when the second and then the third property will be bought? I you trying to insinuate that the first property should be bought in a area that will experience enough capital growth so that you can leverage the growth into the second and then third purchase?
- September 22, 2020 at 9:12 pm #26115
menotyou, you’re spot on with my first purchase idea. I want to leverage hagh capital growth location, then refinance and buy 2nd property to grow my portfolio.
- September 30, 2020 at 11:18 am #26142Brendan ShineParticipant
Hi Iam TheState, Have you thought about instead of just waiting on capital growth, Looking at properties that you can manufacture growth? This will then allow you to have control over when you can buy your next investment instead of just waiting on the market to decide to move? which in turn will give you more leverage to grow your portfolio faster.
- September 30, 2020 at 11:39 am #26146
By manufactured growth you mean renovation / development? I am in favour of this idea, however wouldn’t it be beneficial to combine both the value-add due to reno and the capital growth due to uptrend in the market?
Keen to learn more.
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