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Alternative investment ideas?

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bballscout

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We all know the obvious investments like stock exchange trading and property, but what are some other ideas out there?

Say a return of over 10% PA and in various price ranges such as under 10k and 50k+ etc.

Suggestions?
 
The risk return relationship suggests that if you want 10% returns you'll have to take a decent level of risk. If you're smart enough investing in anything can get you those returns but it's not easy.

Some markets/investments to look into would be futures and options, commodities, foreign exchange trading.

There'd be others but I don't know enough about them to even list them.
 
bballscout said:
We all know the obvious investments like stock exchange trading and property, but what are some other ideas out there?

Say a return of over 10% PA and in various price ranges such as under 10k and 50k+ etc.

Suggestions?
Click to expand...

Buy / selling gold
Small business like vending machines
 

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bballscout said:
Care to explain further?
Click to expand...

Websites will do it better:
http://www.greenworldbvi.com/alternative-investments-options/bamboo-forestry-timber/bamboo/
http://thegreeninvestmentco.com/why-alternative-investments/why-invest-in-teak-timber/
http://www.vin-x.co.uk/

I haven't invested in any of these myself but my old man got into investing in fine wine after being smashed by the GFC and raves about it...says it's been by far his best investment decision. You need a fair amount to get started in it though and I think it'd be pretty risky without a good broker advising you through every step. Last time I visited him (he lives overseas) he was then going on about investing in bamboo and timber. I thought it was pretty funny when he first told me, but seems like there's something to it if you're willing to tie up some money for a few years. Still, some of the figures sound possibly too good to be true.
 
Spanish Bonds.
 
bballscout said:
Congrats, what town lynnchy? Heard Texas is the way to go.
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Thanks!

Texas is the way for future capital gains, can't see them coming to quickly though. I'm in for higher yields at the moment as I don't have a whole lot of cash and you can only purchase using cash. Went for Palm Beach, Florida. Unemployment is improving in Florida and houses are cheap as chips, right at the bottom imo looking at the graphs and sales. I have been looking for about 12 months and I reckon there's been a tiny little bit of an upswing in the last few months. Banks are still getting rid of the repos as quickly as they can.

List Price - $60,000
Offer 1 - $25,000 / Countered at $50,000
Offer 2 - $30,000 / Countered at $41,000
Offer 3 - $35,000 accepted

It's been in the possession of the bank for 12 months so need s a big cleanup and some minor cosmetic repairs - $5,000

Oh house sold for $240,000 in 2007

Total - $40,000
Approx gross rent - $1,300 - $1,600pm

Will be getting a 50% refinance once occupied to buy another so will be interesting to see what the valuation comes in at.

Pretty pumped at the moment. IMO a once in a lifetime opportunity over the next few years
 

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Jimmy_the_Gent said:
Looks like you'd be making a fair amount of income there Lynchy.

I'm curious about how that's taxed? Is it both the US and Australia that take a cut?
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You get taxed at a flat rate of 30% over there. Due to the tax treaty Australia has with the US you then use that tax return as a credit for your australian tax return. Going to need a good accountant!

The guy who I'm going through said they can usually get the taxable amount down to a minimal amount. You can claim even more stuff over there than you can claim here. Also get 2 tax deductable holidays to the US every year :)

For instance, my LLC (limited liability company in the US) that I purchased the house under, the address is the address I am currently living at in Melbourne. Even though the address is in Australia I can claim back the rent I pay. Have to be careful as the address must be zoned commercial/resitential for you to claim it back legally.

That's already $28,000 so I wont be paying any tax on my US rental income until I ahve 2 or 3 places.
 
Lyyynnnchy said:
You get taxed at a flat rate of 30% over there. Due to the tax treaty Australia has with the US you then use that tax return as a credit for your australian tax return. Going to need a good accountant!

The guy who I'm going through said they can usually get the taxable amount down to a minimal amount. You can claim even more stuff over there than you can claim here. Also get 2 tax deductable holidays to the US every year :)

For instance, my LLC (limited liability company in the US) that I purchased the house under, the address is the address I am currently living at in Melbourne. Even though the address is in Australia I can claim back the rent I pay. Have to be careful as the address must be zoned commercial/resitential for you to claim it back legally.

That's already $28,000 so I wont be paying any tax on my US rental income until I ahve 2 or 3 places.
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Great job with the purchase mate! Interested to hear your experience in the US, have you been there a lot or purely taking a bit of a gamble with the whole investment etc? And how did you decide on the place you purchased? Was it advertised online or you found it elsewhere?
 
deledio_gun said:
Great job with the purchase mate! Interested to hear your experience in the US, have you been there a lot or purely taking a bit of a gamble with the whole investment etc? And how did you decide on the place you purchased? Was it advertised online or you found it elsewhere?
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Thanks!

Nope never been!:D

I sold my house in Perth prior to heading over to Melbourne for a good profit. After clearing all my debts I have a healthy bank balance so I thought why not take a bit of a risk and invest in the US. I'm 25 years old, I've had the same full time job for 4 years, great gf for 4 years, no debt and $100,000. Perfect time to invest in something high risk to try and set myself up for life.

Reasons why I chose this specific complex
  • concrete block construction - Florida is knowd for Hurricanes, Storms etc. You must buy a sturdy structure preferably a concrete building. - Not only helps keep your tenants safe, your building on the ground but also cuts the cost of your insurance by a huge amount
  • Low Occupancy area
  • High Yield
  • Last sale price was $240,000
  • unoccupied - originally I was looking only at buildings that were occupied. There is a massive mark up on occupied buildings though and this one fit every criteria except that so I got it for a lot cheaper
  • In an area going though gentrification, Flordia and specificaly the place I bought in are spending a lot of money cleaning their image
Reasons why I chose Florida and I'll also be buying in Georgia.
  • 2 of the 3 or 4 hardest hit states during the GFC
  • Historically lowish unemployment
  • House prices in some places are lower than they were in the 80's & 90's
  • Looking at the graphs both states are on the way down in terms of unemployment
  • Looking at the graphs both states' housing prices have flattened out and have shown signs of an upwards swing
  • Weather - Never buy somewhere it snows, you'll be forking out for plumping repairs
  • Low trade costs (maintenance and repairs) I have been told plumbers and electricians charge about $5 an hour in some places
  • Most areas have low occupancy and massive yields
  • And both places, well in a lot of areas, are both good places to live (based on reviews and concensus) meaning good capital gains outlook
Depdning on how it all goes over the next 12 or so months my GF and I will be looking to start up a company that specialises in pruchasing real estate in the US for Aussies. I think theres probably a good 3 - 5 year window to make a lot of money. I have notice the ridiculous bargains drying up or being purchased within 10 mins of being on the market but there's still plenty out there

Oh and the property was advertised

loopnet.com is our equivelant of realestate.com.au but mainly focuses on duplexs / triplexs / apartment buildings - in the US they call it "multi family"
 
I hope this pays off for you Lynchy. It's a ballsy move.

But I think it's worth pointing out there is a lot of risk you are taking on and you're unlikely to get any significant capital returns for a while given the over supply in the US property market. There are also already a lot of small companies and promoters out there specialising in investing in US property for Aussies. A quick google search brings up heaps of them. I remember reading this article late last year, which doesn't paint a pretty picture of a lot of these companies and also outlines the huge risks in investing in US property - http://www.smh.com.au/money/us-property-the-risks-of-buying-a-bargain-basement-20111202-1obiu.html

That said, there's obviously going to be big opportunities out there in US property in the long term. You've at least done your own research and seem to have structured everything pretty well and it sounds very exciting. The yields are fantastic if you can get some good tenants. I'm the same age as you and in a similar financial position, so was thinking about this last year myself. In the end I decided the risk was too much for me and didn't want to put all my eggs in the one basket. What I decided to do instead was put some money into an international property managed fund that has the majority of its investment in the US. The fund price is up 7% in the 6 months I've had it and over the long term it should pay out a reasonable distribution on top of any capital growth (average 9% over the last 5 years, 12% in the last 3). The potential returns are probably lower, but the way I see it I can rely on experts, the risk is spread, and I'll still have exposure to the recovery of the US property market without having to spend as much. Won't make me rich, but will hopefully have good long term returns.
 

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Thanks MC,

I agree, I don't see any capital gains for at least 3 - 5 years. During that time though the yields are potentially 20 - 30% net. I certainly don't mind hanging around for Capital gains, if of course they do come.

There are a few aussie companies out there and I have researched 99% of them. Most of them buy the properties themselves, do an extremely cheap reno and then on sell them to unaware aussies. I would go about things very differently to how they market themselves. Thats at least a year down the track anyway.

In regards to the tenants, a lot of people are just happy having a roof to live under. Millions of people have lost their homes and when they do find a rental they like they try their utmost to keep it. Thats why the places I am looking at are located in cities that are high on the best places to live lists. It's much easier renting out to someone who enjoys living there.

In the end there is an opportunity where if all goes to plan I could realistically retire in the not too distant future. It really has helped being offered the opportunity to re-finance 50% of the value of the house at a rate of 3.375%. Will speed up the process dramatically.

The plan is to get to around the $10,000pm net rental income mark in the next 2 or 3 years so at least 7 or 8 more properties. I'll be buying 2 more in the next 3 months but will then have to slow down a bit
 
Hey lynnchy, what agency etc did you use?

I'm looking to buy in myself but the place I've been talking to only buy in Houston/San Antonio and properties are about 100k.

Your 25k house sounds like a sweet deal!
 
Outburst said:
What is your occupation if you don't mind me asking, Lynchy?
Click to expand...

Sorry all about not posting a thread yet, I have written about half of what I want so should be ready to post it soon, I've just been flat out

I work as a project accountant at a large international engineering firm. I'm lucky to have a partner who earns significantly more than me. We're on a pretty reasonable combined income meaning there's little pressure on me money wise and I can afford to take the risks
 
For those interested I have submitted an offer for a West Palm Beach Triplex for $60,000. This property is in a better location than the last but needs a bit more work. Roughly $10,000.

$60,000 purchase
$10,000 Renovation

Approx rental of $1,800pm
 
Lyyynnnchy said:
For those interested I have submitted an offer for a West Palm Beach Triplex for $60,000. This property is in a better location than the last but needs a bit more work. Roughly $10,000.

$60,000 purchase
$10,000 Renovation

Approx rental of $1,800pm
Click to expand...
So pissed i am a bum student atm.......
gonna be like 40 or something the next time the global economy gets this far bent over
 

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