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Old 05.10.2015, 11:41
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Investment property in Australia

I am considering investing in a property in Sydney or Melbourne (or another city if the reasons are good enough) and have found a couple of companies on google that help with this sort of thing.

My question is not about actually investing but in how much I should divulge to these companies - do I tell them how much money I have to invest? or do I keep mum about certain things. I haven't contacted any yet.

Just to be clear I'm in the very early stages of this having never invested before, so I'm happy to take criticism about how hopelessly pathetic I am being, but it's Monday morning and I have a stiff neck so please try to be nice.
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Old 05.10.2015, 12:48
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Re: Investment property in Australia

I'll chip in with the criticism.

While it is a way to park your money "relatively safely", the problems with investment properties like you propose are:

1. You own something in a place you don't intend to live - so your property sits empty, which adds to the displacement of the locals, in that it increases the prices of real estates for them. You might pay some property taxes, but you don't contribute much to the community otherwise. Instead you want to rip the benefits of what the active community has built.

2. Should there be a problem with your (empty) property, you won't be there to address it, which means more problems for the locals who have to pick up after you. Let's say a pipe bursts, or a squatter sets shop in your place, etc.

3. Depending what and where you want to buy, there might be regulations (quotas) regarding how many units can be rented out - if you want to buy in a family oriented place, people want to build a safe and welcoming community, more of an extended family feel to their building/area. You, buying in a place like this, contribute negatively to such a community, as either your property sits empty, or you'll have tenants coming and going.

These problems aren't made up - they are real problems that Vancouver is facing, especially the UBC campus - where the prices are such that 99% of the staff and faculty are working poor, while the UBC advertises the newly built apt in Shanghai and Hong Kong. There are apt buildings of which 50% either sit empty because of people who invested their money from afar in the safe neighbourhoods built by those local, or have the apts rented out, so the local could live on a floor of 10 apt and be the only ones there. The burst pipe did happen and guess who had to deal with it. The break-ins and squatting do happen. I know Sidney had started taking measures against such "investment properties".

http://www.theglobeandmail.com/repor...ticle21071391/

Do you still want an investment property?
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Old 05.10.2015, 13:00
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Re: Investment property in Australia

I don't want to be rude (for a change), but OP, you can ignore the post above. I'm pretty certain the OP is talking about purchasing a property to let out as a rental investment, so it won't be sitting empty. That would be a bizarre thing to do.

However, I will point out a couple more negatives. Yes, investing in Australia seems attractive at the moment because the AUD has weakened so much of late. But that's also a big reason to think twice -- you would be exposing yourself to huge foreign exchange risk (if the AUD sinks further). Unless you're thinking of moving to Australia soon, that's not a risk I'd want to take on.

Secondly, it's a royal PITA to manage a rental property by remote control. I did it for years with properties in England and Australia and had all sorts of problems that were difficult and expensive to resolve by using agents in those countries.

Finally, real estate in Sydney and Melbourne has seen huge price growth in recent years and is probably in a big, precarious bubble -- and when Australian real estate bubbles burst (it's happened twice within my memory), they really burst... BIG price drops.

Anyway... good luck!

Last edited by 22 yards; 05.10.2015 at 14:13. Reason: Typos
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Old 05.10.2015, 17:12
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Re: Investment property in Australia

Thanks both, all good points.

Funnybone, my entire family live in Australia and we are Australian. While we don't have any plans to live there at the moment we certainly don't intend on buying a property and have it sit empty. Worst case scenario my sister could rent it out! Ha she'll get mates rates for sure (I'm really not a business person am I).

22 yards, yes I even remember a bubble bursting which caused havoc on property prices, my parents suffered through the 80s and high interest rates that make my eyes water.

I appreciate the perspective that it's difficult to remotely control problems, this is something that has stopped me going forward...

I guess I'm at a point where I can sit on my investment money and hope I don't lose it all to the banks, I can invest it in stocks etc and hope I don't lose it all to the banks or I can invest it in property and hope I don't lose it all to the banks. I don't know how someone decides this.
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Old 05.10.2015, 20:04
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Re: Investment property in Australia

Heh - yeah, I'll agree if you invest in Oz right now, you'll be hitting top of the market likely in Sydney and probably likely in Melbourne. I'd personally wait for things to cool down a bit.

My perspective comes from studying the market for the past several years, on nearly a daily basis.

Immigration is going backwards in most places (except VIC) and will probably continue that trend over the next year.

Where to park your money? Honestly, there's not that many safe havens at the moment. (and I play many markets - stocks, bonds, commodities, currencies).

The best investment is always something you love - buy something that you love and will treasure for a while. Earning in CHF and keeping it in cash over the next 6 - 12 months is not the end of the world either.
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