[Little_StoneParticipant@little_stoneJoin Date: 2014Post Count: 17]

April 23, 2014 - 12:46 pm

Jamie Moore wrote:

Property investing isn’t a race, another opportunity will pop up when you’re ready to purchase the next one.

Superb advice here. Property investing is as much about strategy as it is having the means to action it.

Researching areas for their growth / yields and speaking with real estate agents, looking and monitoring prices/rents on the ground  you want to buy etc are extremely important to ensuring if you buy a “dud” on your 1st IP it can leave you chasing for a few years before you can then again re-invest with is why >90% of property investors in Australia never get past TWO INVESTMENTS as they dont see the results and lose passion.

Your first investment should be the “springboard” into your next IP (meaning you shouldn’t have to load up your cash savings again) and so forth with good capital growth and rental yield you leverage off #1 IP to buy #2. With the growth comes a higher rent return and then it’s a no brainer from there.

Good luck, L_S

• This reply was modified 10 years ago by  Little_Stone.

[Little_StoneParticipant@little_stoneJoin Date: 2014Post Count: 17]

April 23, 2014 - 12:20 pm

Jpcashflow wrote:

it is always important to do your due diligence

I agree with the above ^^^

megb6086 – $350 a week on what seems to be a debt of $430,000 or there abouts is quite low in my eyes. (Happy to be corrected by other members if i am off the mark here).

Aside from tax reasons etc, the main question is, “Why this property/area?”. Are you expecting a large growth in the area to stimulate the rent going up with it for it to become cash positive without the need to dump cash into an offset to get it there?

With curiosity,

L_S

• This reply was modified 10 years ago by  Little_Stone.

[Little_StoneParticipant@little_stoneJoin Date: 2014Post Count: 17]

April 23, 2014 - 12:08 pm

mr_dude_guy wrote:

if a property, has gone up in value by say, 120k, i take it i can use that equity as a deposit on another place.

Let’s not complicate this. You can borrow safely upto 80% of your property value.

>81% and over will incur Lenders Mortgage Insurance. Some banks allow 90% but again you pay LMI on that 10%.

i.e. Your house is now worth $500,000 and your debt is $300,000.

$500,000 x 0.8 = $400,000 minus your debt leaves you with $100,000 of equity to use safely.

Hope this helps.

L_S

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April 15, 2014 - 12:54 pm

Modernity Investing wrote:

At this stage it’s not about the property, it’s all about Strategy, Product & Location, in that order.

streamlineinvesting wrote:

but if you do want to look at it from a purely financial perspective then maybe the option below would be for you

Hamish, just reading these as a spectator I think Mark and Streamlineinvesting are really on the money. Scuse the pun. I’d really keep your advice to professionals like above as apposed to friends and family’s opinons.

Pure figures just speak for themselves, if those IP’s grow by 6%, in no time will you have earnt enough equity to use that for a deposit for a PPOR and then inturn still have 3 IP’s (as per scenario) and then your own PPOR on the way.

[Little_StoneParticipant@little_stoneJoin Date: 2014Post Count: 17]

April 14, 2014 - 3:31 pm

Hi Dangermouse9,

Looking at it from here, it has $46,000 of use-able equity in it. ($420,000 x 0.8 minus the debt = $46,000). Have you looked into the other use-able equity in your other 3 IP’s..?

Your repayments would go up ofcourse on the mortgage but with your managing agent, is rent going up in price relevant to the growth in the area? This may assist in curbing the difference in negative gearing.

Thirdly, have you researched other areas to invest in for your next IP. Central Coast is a lovely place to live but not high on the investment list of “where to buy” so if you did sell it, the proceeds should be about getting towards that 10 year goal as apposed to buying for later life PPOR.

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April 11, 2014 - 4:12 pm

Interesting.

I understand the rental yields to be 2-3% but the growth potential being talked about is between 6-8% as a minimum.

You prefer 5-8% yields over 6-8% capital growth..?

L_S

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April 11, 2014 - 11:32 am

Richard Taylor wrote:

There are a lot better areas to dip your toe into for a buy and hold strategy.

Always interested in where these areas are of yours Richard. :)

[Little_StoneParticipant@little_stoneJoin Date: 2014Post Count: 17]

April 11, 2014 - 9:17 am

Richard Taylor wrote:

Not convinced i would be rushing in to Brisbane either. Whilst 99% of my properties are in Brisbane we are certainly not putting our clients into the City at the moment. There are better low risk areas for both growth and cash flow. Cheers Yours in Finance

Hi Richard, do you consider the yields too low for CBD purchases..? Being that you have 99% of your properties there. Where do you consider the safer suburbs to enter into..?

L_S

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April 10, 2014 - 1:23 pm

Hi Mandy,

Benny is definitely put it in the right context.

My questions are, by what age (how long to go) do you want to enjoy the spoils of your IP’s and what is the $$$ figure you need them to produce?

By this you/your advisors can work out if you have time to reinvest into a new property cycle if you maybe need to look at other investing strategies if there is not enough years to come.

Also, I assume you’re counting on growth of these areas to get you through? Is there infrastructure or some sizeable change to make these properties increase in value..?

Hope to hear from you,

L_S

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April 10, 2014 - 12:48 pm

Richard Taylor wrote:

Are you looking for cash flow, capital growth over time or a combination of both.  

Hi Hifo,

The quote from QLDS007 is really sound advice. A Financial Planner is a good way to see with what type of investment suits your “PURPOSE” for investing your money.

I also agree with QLDS007 with the areas chosen I wouldnt be recommending those either. I’d be thinking closer to your home, Brisbane CBD is really hot right now and surrounding suburbs.

Hope you have found the forum useful.

L_S

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April 10, 2014 - 12:40 pm

Hard question to answer directly. I think Jacqui has depicted it quite fairly.

Goals, Strategy and then Apply from there. If it’s wealth you’re after then there’s on strategy, if it’s to set up a comfortable retirement there is another all together.

I think Scenario #3 would be my pick and when investing use a 20% deposit, pay the fees involved but research is the key here. Must pick the right area so as to not cripple opportunities in the future.

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April 10, 2014 - 11:26 am

Dear Ren Ren, after all of the above. Did you find what you were looking for..?

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April 10, 2014 - 10:48 am

Shank, what was the reason behind selling it..? To buy IP, to buy a new PPOR..?

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April 8, 2014 - 6:07 am

Thanks Jamie.

Well you've just answered your own question, it is in top 50 suburbs, it is in limited competition in its features and in supply (supply is what will hurt your value and vacancy rates) so why not. You would not want to throw away all the work done in the past 2 years when you now have a "product" which can get you into a position to start a portfolio.

Seek some financial advise to clarify the offset feature and also then to model how much renting will save you annually vs living in a PPOR with a mortgage etc and the figures are purely overwhelming.

If it is continually growing by 5% p.a. and renting should go up atleast 3% annually i don't seea reason to get rid of it, unless the growth stops, it bleeds you with maintenance or it is vacant for long periods. Wealth is not made by buying and selling, maintaining property is where the wealth grows by compounding growth and then you buy off it's success.

Let us know how you go with it all.

Cheers,

L_S

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April 8, 2014 - 5:47 am

There are much more experienced forum members, Jamie being one of them as well as Richard Taylor.

However, if your property has grown by $50k (give or take) over 2 years (5% p.a.) is not terrible, but with the area is it maintainable. I've read previously Jamie referring to using an offset feature on the loan if turning a PPOR into an IP to assist in claiming the full benefit of tax deductions. I have to say i havent commented as much as i have read and Jamie's website/blogs are definitley ones to read.

For what you'd lose selling it in costs, my two cents would be to maintain owning it and get it tenanted and at this stage (check local vacany rates in similar properties), your at 85.53% LVR so there is not point trying to take equity out of it upto 90% at the risk of paying LMI so if you were able to continue with the growth and manage the negative gearing and rented a PPOR elsewhere you could grow this property and use it to leverage an IP or perhaps a LOC for a new PPOR somewhere else after a year or two.

Hope this may create some discussion from the more experienced members of this website.

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April 8, 2014 - 5:33 am

Hi Shank,

What is the debt on the property..?

L_S

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April 8, 2014 - 5:20 am

Hi Dave,

Benny is completely right in the fact you are very well set up to proceed into nearly any market, property, shares etc.

The question i have is, what is your strategy/reason/purpose towards investing in property? (wealth or early retirement or a hobby to renovate houses) and with this goal when do you want to achieve it (years)..?

Agree further with Benny re: PPOR nearly being paid off and seeking financial advice.

Any reason you like Perth? Have you done some research to find the goals/growth you need to make these subdivisions or multi units worth while instead of buying a few units and houses in areas with better growth potential..?

Cheers.