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An exit strategy for Sydney-siders; Be Set for Life
Topic Started: 15 Aug 2014, 07:57 PM (1,458 Views)
DragonGM
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The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
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Chris
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DragonGM
15 Aug 2014, 07:57 PM
The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
If you travelled to the US regularly, had intimate knowledge of the areas you were buying in I can see it having potential.


If it's an off the cuff event after a rush of blood I could envisage $500k being pissed up against the wall at a rate of knots!!
Edited by Chris, 15 Aug 2014, 08:16 PM.
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stinkbug
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Trading down to release some equity is a valid strategy. Buying a bunch of high yield foreign property is pretty risky, though.
Edited by stinkbug, 15 Aug 2014, 09:10 PM.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Blondie girl
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DragonGM
15 Aug 2014, 07:57 PM
The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
So...
HAve you put your money where your mouth is ?

Have you taken advantage regarding Sydney over the yrs?

Job security is uncertain for those who are not their own boss , it can be quite challenging for some & I wouldn't envy some people.

So you propose that those who made the most in Sydney with those crazy prices could restructure their equity by making the move to banana bender land to make the most of it.

Just remember people's properties & situations vary. You can read the market but you can't control it, however you can try to improve the situation . As long it doesnt backfire.
Newjerk? can you try harder than dig up another person's blog. My first promo was with Billabong and my name in English is modified with a T, am Perth born but also lived in Sydney to make my $$
It's Absolutely Fabulous if it includes brilliant locations, & high calibre tenants..what more does one want? Understand the power of the two "P"" or be financially challenged
Even better when there is family who are property mad and one is born in some entitlements.....Understand that beautiful women are the exhibitionists we crave attention, whilst hot blooded men are the voyeurs ... A stunning woman can command and takes pleasure in being noticed. Seems not too many understand what it means to hold and own props and get threatened by those who do.
Banks are considered to be law abiding and & rather boring places yeah not true . A bank balance sheet will show capital is dwarfed by their liabilities this means when a portions of loans is falling its problems for the bank.
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DragonGM
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Lots of statements there blondie. But yes, I am eating my own cooking.
Edited by DragonGM, 16 Aug 2014, 07:39 AM.
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Bardon
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DragonGM
15 Aug 2014, 07:57 PM
The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
What if they are happy living in Sydney and have no inclination to move to regional QLD. Losing your job and not finding another one is not that common in one of the biggest employment markets in the country.

As another poster said owning and receiving high cash flow from low priced houses in the US is far easier said than done
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DragonGM
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I am not saying it is for everyone or that it is easy. Buy neither it is out of the question. And as Sydney prices keep testing record highs, more and more people will start considering such options seriously.
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Josh
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DragonGM
15 Aug 2014, 07:57 PM
The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
You won't by anything decent on the coast in QLD for 300k brand new. Not in a decent location anyway.
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ozz
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DragonGM
15 Aug 2014, 07:57 PM
The median Sydney House price is around $800K. If an average punter had bought in several years ago and paid off some of their loan, it is conceivable they will have a mortgage of $300K. As such they must be feeling pretty good with $500K equity. Yet, they still would be faced with servicing a mortgage approaching $2000 per month. If they felt a bit of job insecurity, the prospect of having to service this without a job would be daunting.

A possible proactive alternative could be to sell up and realise that $500K equity. They could use $300K equity to buy a new house and land package outright in one of many regional coastal areas of Queensland. They could then invest the other $200K to buy six $30K rental homes in the US that return $600 gross per month each ($400 per month net). A regular monthly income of US$2,400, no mortgage and living in a brand new house, could be a great way to cash out and free oneself up to explore new things without financial concerns.
Doesn't work on the simple premise that a lot of single asset home owners draw equity against their property year after year. I see it constantly. Can't tell you how many clients of mine bought a house for $140,000 15 years ago and now worth $500,000. Thing is they owe $400,000 against the house, what with car purchases, re-financing credit cards, and ever increasing 'renovations - AKA funding lifestyle'.

Same in your case, half the punters out there who paid $450,000 for a house with a mortgage of $360,000 10 year ago, do have a house worth $800,000 (at least), and should owe $300,000 after 10 years, but how many may now owe $500K or $600K?
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DragonGM
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ozz
16 Aug 2014, 06:03 PM
Doesn't work on the simple premise that a lot of single asset home owners draw equity against their property year after year. I see it constantly. Can't tell you how many clients of mine bought a house for $140,000 15 years ago and now worth $500,000. Thing is they owe $400,000 against the house, what with car purchases, re-financing credit cards, and ever increasing 'renovations - AKA funding lifestyle'.

Same in your case, half the punters out there who paid $450,000 for a house with a mortgage of $360,000 10 year ago, do have a house worth $800,000 (at least), and should owe $300,000 after 10 years, but how many may now owe $500K or $600K?


Yes, and in those cases, their 'lifestyle choices' have deprived them of options now. But for those who have maintained a bit of financial discipline, there are unique opportunities to realise some serious once in a lifetime gains.
Edited by DragonGM, 16 Aug 2014, 06:56 PM.
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