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$1mil to spend

Discussion in 'Real Estate' started by Jacque, 1st Nov, 2006.

  1. Jacque

    Jacque Team InvestEd

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    Hypothetically, if you had this much to invest in one Aussie capital city at the moment, what would you buy and why?
    Thought it might make for some interesting discussion :)
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I assume you're referring to real estate ?
     
  3. Jacque

    Jacque Team InvestEd

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    Naturally :)
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Quite simple for me ... I've been wanting to buy a PPOR in Sydney for a while now (only because we want to renovate / extend something to our own criteria) ... so I'd buy in Sydney. If I suddenly came into $1m I would probably buy now. Otherwise, if I had to wait until I could afford it, I would be happy to wait a couple of years before buying ... I don't think we've seen the last of the interest rate rises yet.

    Getting an extra $1m now probably wouldn't change what we'd buy ... it would just accelerate the plan.
     
  5. Jacque

    Jacque Team InvestEd

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    So, for investment purposes (and not a PPOR) would you invest it all on one property?
    Sydney is my pick for now, but I'm currently maximising cash holdings for the next PPOR :)
     
  6. Nigel Ward

    Nigel Ward Team InvestEd

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    I'd probably leverage it into 4-5 IPs. Or maybe buy a debt free PPOR and then redraw it and leverage it into a couple of IPs...
     
  7. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Any type of property is an asset (assuming we define "asset" to include capital growth without income ... which I am happy to do given that most IPs are cashflow negative anyway) ... and like Nigel I fully intend to leverage against it for further investment ... so I think a PPOR in many cases is a valid part of an investment strategy. :D
     
  8. Jacque

    Jacque Team InvestEd

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    I like the redraw idea :)

    4-5 IPs?!! So we're talking units/townhouses futher out from CBD or studios in the city, Nige? $250K is only going to get you houses in areas like far west (Blacktown, Penrith etc) south (Campbelltown) or far North West (Bligh Park etc). I can't really see these outer areas recovering for some time, however. My money is on better suburbs closer in to the CBD, as it's really these that are going to be entering the first phase of the next upswing.
     
  9. Nigel Ward

    Nigel Ward Team InvestEd

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    No. $200k = deposit plus costs for $500k+ properties x 5. :D
     
  10. Jacque

    Jacque Team InvestEd

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    Highly valid :)
    And I'd still like to be able to purchase something like this one day to bury my cap gains in.....

    http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2005926339#
     
  11. Jacque

    Jacque Team InvestEd

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    D'oh ..... of course :)
    How could I forget about the power of leverage?
    Though I did actually intend for a purchasing position of max $1mil lend in my original post. The vocab structure isn't flowing as well tonight... :)
     
  12. Nigel Ward

    Nigel Ward Team InvestEd

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    You need either more or less booze :p
     
  13. handyandy

    handyandy Well-Known Member

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    Creative financing aside :rolleyes:, I would look towards the eastern suburbs of Sydney.

    Why?

    Because this will be where the next boom will flow from. I have never actually owned anyhting is the Eastern Suburbs so it would also provide some challenges becoming familiar wih a new market.

    Cheers
     
    Last edited by a moderator: 2nd Nov, 2006
  14. Mark Laszczuk

    Mark Laszczuk Well-Known Member

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    I'd buy a 2 bed house in St. Kilda for a PPOR, cause that's one of my goals. I'd invest the rest in properties (probably in Brisvegas at the moment, as can still find some Rental Reality places up here) or if I could find some, buy in Melbourne.

    Mark
     
  15. shake-the-disease

    shake-the-disease Well-Known Member

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    Since I already have property in Melbourne, if I had $1m now I'd probably put it in one $650k IP in Sydney and one $350k IP in brissy.
     
  16. Glebe

    Glebe Well-Known Member

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    If I was lucky enough to have a million drop in my lap I'd buy a $1m PPOR in Balmain, Balmain East or Birchgrove.

    Then I'd take a LOC out on it to invest in the sharemarket.

    mmmmm :)
     
  17. MichaelWhyte

    MichaelWhyte Well-Known Member

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    Hi Jacque,

    I'd buy a townhouse development site in Mona Vale and then spend the next two years getting the DA through council and the site developed. That should bring it online just as the Sydney market is recovering so prices are improving and rents are much higher due to existing demand/supply imbalances.

    ;)

    Cheers,
    Michael.
     
  18. TryHard

    TryHard Well-Known Member

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    I'm assuming you don't have my serviceability issues Nigel ;-)

    I'd agree with all the SYD fans - if I had enough for anything in Sydney at the moment I'd be there with bells on. Eastern Suburbs would be nice, at least with a million I could get something with a kitchenette ;-)

    No one ever needed * less * booze :p
     
  19. handyandy

    handyandy Well-Known Member

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    They don't need kitchenette's anymore as they have the local cafe's :D
     
  20. Jacque

    Jacque Team InvestEd

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    Hehe for $1mil you can get granite and stainless steel- no probs :)

    My money's on the lower north shore- near the transport hubs and on the biggest block of land possible.
    Eastern suburbs are overrated and overcrowded :)