Wednesday, 23 September 2015

Next Step - Developer

There are just so many branches in property business. As a investor, there are already tonnes of information to digest, the ultimate aim of property business is to develop raw land and add value to it and finally able to market this to other people. 

May I suggest the following levels of investing which I have taken.

a. Principal place of residence - subsidised housing
b. Single bedroom Apartment in City Centre - done
c. Hotel Suites in holiday destination - done
d. Single bedroom Apartment in sought after suburb - done
e. 4 Bedroom Townhouse in growing suburb - done
f. What's next?

As you can see, I set a path of stability for myself. Investments are measured with income generation as the key considerations and rentability as the end result. Apartment in city centre would be high sought after by working professionals needing a place to stay during their attachment. It will not have high capital growth - for sure, unless the city grows in tandem. In fact, it will have oversupply issue. Again, its managed risk. If you are able to ride it out with lower rent, you will manage well. Hotel suites are a huge cashflow for operators, why would it do different for owner occupiers. If the price is right, you are able to rent out lower. Again, capital growth is limited. I'm happy with 2-3% gross anaemic growth for very little down payment. They kept me grounded with cashflow til my next purchases. 

Single bedroom in a sought after suburb is bit risky but as the price is out of reach of many, a well designed layout could do better than a 2 bedroom. Again, if I have a choice, a 2 bedroom apartment would be better for a suburb location. 

4 Bedroom Townhouse in growing suburb is the highest risk in my limited exposure to property. Its the most expensive of all and its tenancy depends on growing family. I'm a grand old age of 5.5 years old in property business. This, I'm going for capital growth. This might appeal to owners occupiers market. 

I've always maintained that I would not sell any properties and allow them to grow and support further investment. I've also shared over 3 years, the single bedroom city centre apartment has grown but policy changes in that country does not allow for withdrawal yet due to the changes in LVR. I'm happy it has achieved enough capital growth to cover my initial outgoings. Should I be able to take money out next year, I would have nett zero down with just monthly outgoing fees. Consider it as long term loan at favourable rate. 

Hotel suites have just completed. It did not do so well. I expect it to do better in the next few months as it gain traction. Should it bombed.... I might as well do Air BnB in that sought after location for tourist. 

Patiently awaiting results from australia for the other 2.

Next up... the ultimate dream - to develop my own apartments; but firstly, I have to learn to do duplex or triplex. If there are any resources out there, please point out to me.


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