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What % of your portfolio is in direct RE?

Discussion in 'Real Estate' started by Jacque, 31st Jul, 2006.

  1. Jacque

    Jacque Team InvestEd

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    1,885
    Location:
    Sydney
    Interesting article recently, with a quote by NERA Economic and Consulting Mercer associate director Hird, who believes that investors aiming for a 15 per cent annual return with minimal risk should have at least 60% of their portfolio in residential real estate.

    Hird's opinion is that real estate’s lower volatility makes it the perfect companion to diversify an investor’s share holdings, as shown by the property sector’s strength during the 1987 stock market crash and the more recent 2001 technology stock correction.

    But is this type of thinking sustainable in the current market and for the next 20 years? Hird thinks YES, as evidenced by this quote:


    “We see the major factors that drove those returns over the last 20 years as being the same, if not stronger, over the next 20 years,” he said.

    The report identifies those factors as:

    the relatively fixed supply of real estate offering the amenities people tend to value (eg. urban housing close to employment, transport etc.);
    population growth;
    falling household size;
    growing household incomes; and
    the availability of housing finance.
    Hird said these factors had driven house price increases to the point where prices as a multiple of average weekly earnings were higher than historic averages. While some analysts view this as unsustainable, Hird is not among them.

    What do others think?
    Is 60% or more of your portfolio tied up in real estate?
     
  2. Alan

    Alan Well-Known Member

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    Location:
    Sydney
    Hi Jacquue.

    51.72413%!


    :)
     
  3. Jacque

    Jacque Team InvestEd

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    Hahaha! Alan, you do know how to bring a smile to my face after a long day! I can see you diligently working on that calculator now...... :)
     
  4. Jenny

    Jenny Well-Known Member

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    103
    Location:
    Canberra
    64.5% for us (not includ super, just direct property & shares)
     
  5. capitalist

    capitalist Member

    Joined:
    1st Jan, 2006
    Posts:
    10
    Location:
    Melbourne
    RE 90%, shares 10% (super not included)
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I'm approaching 50% (dropping from almost 100% a few years ago). Once I've built up a cashflow base, I'll be reinvesting in more real estate - so that will likely bring it back up to 60%+ real estate over the next few years.
     
  7. Glebe

    Glebe Well-Known Member

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    Location:
    Sydney, NSW
    0%.......................
     
  8. Giddo

    Giddo Active Member

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    Location:
    SE Qld
    We are on 98.7% in R.E. not including super.

    A bit outa wack with most by the look of it but so far it is working well.:)
     
  9. kevinb

    kevinb Well-Known Member

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    6th Oct, 2005
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    Location:
    MENAI
    RE 76% not including super for us
     
  10. gazza

    gazza Well-Known Member

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    15th Aug, 2005
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    214
    Location:
    Canberra
    66% RE (including PPOR)
     
  11. MichaelWhyte

    MichaelWhyte Well-Known Member

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    798
    Location:
    Sydney, NSW
    RE 72.33% of total portfolio, including PPOR.
     
  12. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I don't see a problem with a portfolio heavily biased towards real estate - especially if you are achieving your goals and you are taking a long term approach (ie you can be patient through the inevitable slow periods of real estate growth).

    If it is working well for you - that's great.
     
  13. Tom&Don

    Tom&Don Active Member

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    Location:
    Melbourne
    % Portfolio

    In terms of EQUITY..

    Cash/Other 22%
    Shares 23%
    Property 53%

    In terms of total $ controlled ...

    Cash/Other 4%
    Shares 6%
    Property 90%
     
  14. MJK

    MJK Well-Known Member

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    280
    Currently holding 66% property and 33% shares (not including PPOR or super).

    Like Sim I'm developing cashflow from my structure while property is slow with a veiw to buying more RE soon.

    Basically I'm drawing down RE equity and putting it into shares rather than new property. I also sold a property last year which put more cash into shares.

    Property leveraged to 80%
    Shares leveraged to 50%

    MJK :D
     
  15. D&K

    D&K Well-Known Member

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    Location:
    Canberra
    As per Tom&Don, this gets a bit confusing when you consider controlled vs equity. In terms of controlled (excluding PPOR):

    RE:70%
    Shares & Managed funds: 25%
    Cash: 5%

    But then there's the loan against the PPOR used in managed funds, and the cash float for shares sitting in a mortgage offset account for property, then there's foreign exchange rates ... too hard!

    Unlike Tom&Don I haven't worked out the equity!

    Dave
     
  16. stevefnq

    stevefnq Member

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    Location:
    cairns,fnq
    currently around 85% in property and after my entry into managed funds i wish it was higher!

    steve
     
  17. Dr Lobster

    Dr Lobster Well-Known Member

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    Location:
    sydney nsw
    85% excluding ppor and super
     
  18. Bob

    Bob Well-Known Member

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    131
    percentages

    67.5percent property, 32.5percent managed funds + super. No PPOR.


    Bob
     
  19. handyandy

    handyandy Well-Known Member

    Joined:
    6th Jun, 2006
    Posts:
    312
    Location:
    Sydney Nsw
    54% property (includes PPOR)
    7% direct shares
    32% Managed funds
    5% Super (self Managed)
    2% Cash

    LVR of 26% (drawn)
    Plus
    LVR of 23% (Available but not drawn)

    Cheers