澳洲Australia property An interview with Wobbycarly | Sydney


在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m


I was going to post this in March, but it's a leap year and it's close enough! :D

Please find the interview at
http://somersoft.com/forums/showthread.php?p=885513#post885513

Thanks Wobby!!

The Y-man  

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Your journey has made a a great read Wobby.

Thanks for sharing.  

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wow - no mucking around Y-man ... time to make a cuppa  

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Onya' Wobb'!

I'm more curious (and I think I speak for many) about the numbers though.
Is this portfolio/equity value one that sustains your income as yet? Will it be? How long before then?

Cheers Wobb :)  

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It's nice to hear other people experiences, especially how they started.
Thank you for sharing your story.....:)  

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Thanks for the interview gents they are great learning tools. Wobbly out of curiousity what was the peak rent you achieved on that initial 4 pack? I'd like to know what the return on an initial 85k outlay that was grossing 13% got to a decade later.  

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investor2009 said: ↑
Onya' Wobb'!

I'm more curious (and I think I speak for many) about the numbers though.
Is this portfolio/equity value one that sustains your income as yet? Will it be? How long before then?

Cheers Wobb :)Click to expand...
Short answer is "No" it doesn't sustain our income. The property in SE Melb returns ~$6-8k gross (pre-tax) pa, and that's with the loan significantly paid down (before we knew what we were doing!)

Overall, we're about neutral, so it doesn't really cost us anything to control ~$1M of investment property.  

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FormerLurker said: ↑
Thanks for the interview gents they are great learning tools. Wobbly out of curiousity what was the peak rent you achieved on that initial 4 pack? I'd like to know what the return on an initial 85k outlay that was grossing 13% got to a decade later.Click to expand...
:eek:

The best I did was increase the rent (per unit) from about $60pw to $75pw - yes, that's over about 10 years. The problem I found was that a 1BR unit in a regional area was always just a 1BR unit in a regional area! That price attracts a certain type of tenant.

When they were fully tenanted at $75pw, the block was valued at about $165k (~2005), but as I alluded to in the interview, I started having trouble renting them, and couldn't afford to "tidy them up". This meant that they slowly became empty, with difficulty letting, which in turn reduced the valuation.

I ended up selling, and the new owners converted them to serviced apartments.

Mind you, the profits paid for our PPOR renovations, which yielded an significantly improved sale price a few months ago.  

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Thank you for the interview Wobbycarly. Here is the time line from your story. I don’t know why I always do this?!? :)
1996/1997 - Age 22 – Bought block of 4 1BR units
Before 2002 – Bought outer East of Melbourne (wife)
Around 2002 - Got married.
Around 2002 - Bought new townhouse in Brisbane
2002 - Age 28 – Bought PPOR
Started family.
2007 – Sold block of 4 1BR units
2008 - Embarked on first reno
2010 – Bought townhouse in Upper Coomera
2012 - Age 38 - sold PPOR and bought an upgrade

Is this correct?

If so, having children stopped you for about 6-8 years. Is that be because of reduced cashflow or didn’t want to take risk or just didn’t have the energy/interest?


You mentioned that “ ~$1M of investment “. Is that IPs only? (not including PPOR or other assets)

I noticed that you always participate shares related posts and also you mentioned that you have <1% in shares. That is about 10K. Is that correct? Is there any particular reason for not investing more?

You mentioned “Living off rent will be difficult; the required level of unencumbered residential real estate assets to live off rent is substantial.”. You are only 38. Don’t you think you have another 25 years to come to that stage?  

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devank said: ↑
Thank you for the interview Wobbycarly. Here is the time line from your story. I don’t know why I always do this?!? :)
1996/1997 - Age 22 – Bought block of 4 1BR units
Before 2002 – Bought outer East of Melbourne (wife)
Around 2002 - Got married.
Around 2002 - Bought new townhouse in Brisbane
2002 - Age 28 – Bought PPOR
Started family.
2007 – Sold block of 4 1BR units
2008 - Embarked on first reno
2010 – Bought townhouse in Upper Coomera
2012 - Age 38 - sold PPOR and bought an upgrade

Is this correct?Click to expand...
Yep, that's about it, in a nutshell.
If so, having children stopped you for about 6-8 years. Is that be because of reduced cashflow or didn’t want to take risk or just didn’t have the energy/interest?Click to expand...
D. All of the above. Primarily, it was reduced cashflow. We went from renting with 2 incomes, to a mortgage on 1 income. I kept up my reading - plenty of investment books in the library - but had neither the cashflow nor energy.

You mentioned that “ ~$1M of investment “. Is that IPs only? (not including PPOR or other assets)Click to expand...
The 4 IPs are each worth about the $300k mark, so there's a bit over $1M in gross value.

I noticed that you always participate shares related posts and also you mentioned that you have <1% in shares. That is about 10K. Is that correct? Is there any particular reason for not investing more?Click to expand...
Yep - about $10k in direct shares and about $5k in an ASX200 tracker.

I managed to lose quite a bit of money during the 2007 crash. I was margined during this time too. So I've just slowly been building the portfolio again. I still have a lot to learn about investing in the stockmarket, as opposed to trying to trade. I have come to believe that these are two completely different activities, require different mindsets and skills.

One aspect for me, from a mindset point of view, is that I'm happy to hold a property for several years, but I have this 'block' in my mind that shares should provide "quicker" profit than property. This is something that I need to overcome; I need to develop patience in the market.

I will become more exposed to the share market, through direct investing, and will learn more about choosing investment-grade shares, but I have a bit to go yet.

The leverage in property is also very attractive to me, compared to shares, where I believe leverage is more dangerous. I've learnt the hard way, and expect to be a lot less aggressive in the future.

You mentioned “Living off rent will be difficult; the required level of unencumbered residential real estate assets to live off rent is substantial.”. You are only 38. Don’t you think you have another 25 years to come to that stage?Click to expand...
I often remind myself: "People generally overestimate what they can achieve in 1 year, and underestimate what they can achieve in 10." Yes, God willing, I have plenty more time, but I want to shake off the shackles of the wage slave as soon as possible - I don't want to WAIT for 25 years! ;)

Thanks for taking an interest in my story, and I hope it helps.  

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