Property - Three States, Five Houses, Time To Learn The Mistakes!
Thanks for the opportunity to be a part of your Personal Property Profiles. The only twist is that this is a "what not to do guide", as opposed to a success story. I just hope that someone reading this will take note and learn from what I have done.
The only message I wish to get across is; whatever you do, "DO NOT SELL".
I would be a very wealthy person if for the fact that I had heeded your advice. I have bought property in the very ‘right time’ in three different states and sold each time for what I thought was a decent profit, only to look back and realise that I was an idiot!!!!. Renting the properties would have been the smarter long term option.
There are no negatives to it, sure, you may lose your job and think, how am I going to support myself/family and a rental property?
However, if you have a decent work ethic and a reason to work you will find a job. I worked with Ansett for 10 years and lost my job, however I have worked since in quite a number of jobs before I landed back on my feet into a new career.
The issue of maintaining the loan during this period would have been a little difficult but I would have gotten through it somehow. I have found that when a problem arises, somehow you find a solution. Anyway, the banks, if you are upfront with them, have a sympathetic ear on most occasions.
Even if all was lost and the last resort was to sell - Guess what, you still make a profit.
1988 - Crawford rd, Inglewood, WA - Purchase price $90,000 - Now Worth - $300,000
1994 - Redunca Cls, Helena Valley, WA - Purchase price $125,000 - Now worth $250,000
1998 - Bignell st, Flemington, Vic - Purchase Price $175,000 - Now worth $450,000
1999 - Harold St, Ascot Vale, Vic - Purchase Price $285,000 - Now worth $600,000
As you can see, I have made mistakes.
If you forget about negative gearing as a buying motive and buy for Capital gain alone you will be successful. Negative gearing is a bonus for some tax relief that comes your way.
Long Term investing for your future is the answer.
I have now bought my 5th home, got re-married to my rock of Gibraltar and had a beautiful baby daughter.
Now that I have settled down in my new job and loving it, the next thing is another property. Having bought and sold too many times, and even though I did make money along the way, from here on my plan will definitely be different.
I look at what my once owned properties have done in growth, where I could have been financially and how your portfolio has come together Tom and I think; time for change!
I have not read your book yet but am looking forward to my copy because I have seen what you have done and there seems that there will be a lot in there that I can learn.
While we are living in good times now with the way property has performed, that has not always been the case.
I expect we will go through lean times again in the future, but property has always been here. It doesn’t go away.
A lot has happened in my short life time and a lot more will.
Investing in something that everyone needs and will be around in my retirement makes a lot of sense to me. The long term profit (especially in my case) out weighs the short term gain!
At the time of writing Grahams collective (previous assets) have grown in value by $935,000! Their total value is now 1.6 million. If he had have kept his properties which would have been very possible, his LVR would now be just 42%.
His loan repayments on this (total) money borrowed would be about $780/week. Estimating his collective rent as being about $1200 to $1300 a week and deducting the running costs of each property would still leave Graham with money in his pocket before tax. POSITIVE CASH FLOW!
Graham has an extremely good work ethic and is a self-achiever. His 5th home is now looking a million dollars after beautification works.
I feel certain that his drive and new outlook on his own investment plans will pay great dividends in the not too distant future.
Return from Graham Hampson (this page) to Investor Profiles
Return from Graham Hampson (this page) to Wealth with Property home page