hie. i’m a beginner in this topic so please bear with me if the question im about to ask seems too naive to you.[blush2]
my question is related to IP accumulation especially for young investors who have little liquidity at hand. Lets say i managed to pool a small amount enough for a deposit for a modestly priced property.
So the situation is this, i have already spent my hard earned cash on the first deposit. i would like to obtain more IPs but i have to wait for a certain period (probably years) b4 i accumulate eenought for another deposit again as the gross cash on cash return from the first IP is fairly small. How do i go about to accumulate more when i dont have the liquidity to do so?
i understand that there are several financial ways to go about such as redraw, refinance? But dont we have to pay more in terms of interest repayments every time we take them out? so what’s the point in that??[eh] also. because i want to maintain a passive income from all the IPs, i cant sell them. (or so i’m advised by most ppl). Please help to enlighten me.
-debbie
What you need to do, to enable you to buy a few properties, is to find something that grows in value quickly. Capital growth and/or improvements will help. You then use this to leverage into the next. And repeat the process.
If you borrow more money you will have to pay more interest, but hopefully the benefits will outweigh the costs.
Terryw
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Are you earning more money since your first purchase? If so then just borrow more money but also having a bit of equity also helps but it comes down to how much you earn.
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