Monday, April 14, 2008


Property is where I cut my teeth in investments, where I learned the basics and after awhile I started to understand an Investment's are all the same, just the terms and names of things are different ie. rent = divended.

Property can by quite a forgiving investment, just hold it long enough and it'll go up, as long as it's in a reasonable place.

The Pro's of Property

High leverage ability
Secure funding (loan doesn't reduce like margin loans)
Easier access to funding
Can increase value and rent by improvements to place (within parameters for area)
Control of asset
Can shop around different lenders
Can re-finance to pull money out
Can negative gear against tax

The Con's of Property

High entry and exits costs
Length of time to sell (liquidity)
Can't increase value of place above surrounding area
At market forces for rent, and interest rates
Ongoing costs can be high (rates, insurence ect...)
Property managers take a high % of rent

For the next Property I buy I'm gunna do what I have never done before and search for the a great buy, hopefully a development potential site, that price hasn't been already factored into it. Or a cash flow positive place, yes there are out there, just takes alot of looking and imaginative think to create one.

I think in future property whilst still being important, it will be the base for me to secure funding for other investments, rather than being everything. I shall always be in it, as well as other markets

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