Apartment Buyer Type No 4: Lifestyle Apartment Investor

Summary:

This purchase is where the focus is to have a better lifestyle and you would like to free up capital to either spend it other investments for example rental apartments or use it to enjoy life like travelling and adventure.

Leasehold apartments are often spacious with high end finishing’s and a view.

TRANSCRIPTION:

Buyer type number four - Lifestyle. This is where capital gain is not the focus of your purchase. It is maximising your lifestyle. Whether it be how you live it, and/or having a better life in general. For example, you are being able to travel and enjoy your life through freeing up capital. So, what I mean by this is where leasehold is an actual viable option.

Now, leasehold gets a huge amount of bash in the press and amongst other purchasers because they have been told, "Avoid leasehold." But the thing is, leasehold does suit a certain type of purchaser.

Obviously, the purchaser who is not concerned about capital gain, but they are concerned about freeing up capital, either to spend it in other ways where they can get a better return. That is to make more money or to free up to enjoy your lifestyle so it is not tied up in a property or a business.

You can travel more and not have it all tied up and underneath their feet. For example, let us say I take my parents and pretend that they have got one home. You look at their first home they purchased for $176,000 in 1987. And now, that is worth 2.5 million dollars. Yet, if they just had that home and they stopped working. They are what is called asset rich, cash poor folks. So, they have got nothing. But yes, they have got a lot on paper.

Now they are bound to enjoy their life more and live a good lifestyle, it would be to sell that home and release the money. Go buy a leasehold property for a couple of hundred thousand dollars with a great lifestyle, understanding there is high outgoings but then there is also outgoings when you have got a home anywhere. If you release all that capital to be able to go on holidays, go on good trips, probably invest in property that is purely income based.

A good example is when you buy a small student apartment which is freehold and they can live off the rent, or help pay the expenses for the leasehold apartment. That kind of thing. So, that is the market where lifestyle depicts what you purchase. It is where you have got to be looking at leasehold and you are going to be, "Okay, what is the best lifestyle I want to live?" And look at also what leasehold actually has the lowest costs.

When I am talking about lifestyle, that narrows down to what you are looking for. The thing is, if you looked for that, you know that a couple of hundred thousand dollars in the freehold market and, I could not see my parents living in a two bedroom, 50 square metre apartment. They could not really invite their friends around for dinner. My mum would be, to be honest, embarrassed.

I mean, she is in her 60's and that is buyer type number four and it is a small segment of market, but it is actually rare that leasehold suits. I hope that helps.

Next one, I am going to be talking about is an owner occupier. There are different types like high level, medium level, and low level.

Cheers.