Alister Toma – Real Estate Development Strategies

ALISTER TOMA REAL ESTATE DEVELOPER

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Real Estate Strategies

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Welcome!!

Welcome to our Real Estate Strategies Session

Buy and Hold I would say that this is the number 1 investment strategy used in Australia and all it is, is purchasing a property in order to hold that property for the long term .

You may be purchasing the property for rental income or you may be purchasing a property for capital growth that doesn’t really matter. It’s still going to be called buy and hold if you’re buying it and holding it for a long period of time.

This is extremely common because as they say “ property tends to double every 7 to 10 years”. You can get great capital growth out of it and also rental incomes tend to go up over the years as well. This means overtime you keep getting more and more rental income from the property and someone else can pay for your mortgage for you if it turns into a positive cash flow property.

Renovation This is purchasing a property in order to spruce it up, put in some TLC and improve the value of the rental income or the property through renovation .

This can be as simple as doing a cosmetic renovation where you might put in a new carpet and paint the walls and other simple stuff or it can be as extreme as changing the layout by removing walls or moving walls and adding extensions to the property.

Renovation is a common strategy used by a lot of investors.

Generally you purchase a property, renovate it (as quickly as possible) and then on sell it to make a chunky profit and then move on and do another renovation.

Dual Occupancy I sat down with Rochelle and Nicole (who are town planners here on the Gold Coast) and we talked about dual occupancy and how to create a dual occupancy .

Dual occupancy is creating two or more rental incomes from one title. That may be done by adding a house or adding a granny flat onto the back of your property or it could mean simply splitting your property so downstairs is one self-contained living area and upstairs is a second self-contained living area.

Basically you’re getting multiple rental incomes on one title and so that’s dual occupancy and that can be a very profitable investment strategy in terms of rental income and can actually help when you come to sell your property as well because the one house can have multiple uses or generated income for the people buying it.

Subdivision This is where you take a property or a block of land and you draw a line down the middle and you turn it into two separate titles.

This means that one block can now be sold off or can now be developed on and other block stands on its own as well.

You’re effectively taking one title and you’re turning it into two titles with smaller blocks of land.

Subdivision is an expensive process to go through (I’ll have to do an interview to find out the full cost for you). I think it’s around the ballpark figure of about $30,000 or more to get a subdivision done.

Development Rather than just subdividing you might take a block of land and build townhouses or villas or units and then go ahead and strata title those. Rather than just renovating property and rather than just drawing that line in the sand to subdivide you’re going ahead and you’re building multiple dwellings on what was originally one block of land.

Larger scale developments are extremely common among investors – especially more experienced investors. It can be extremely lucrative to do these developments but then often you need a larger cash outlay in order to get them going.

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