Long time reader, first time poster. Great site/forum!
I own a 2br flat in Keswick, SA. Bought for $173k in September 2005, new council rates have come in with a valuation of $183k. Currently owe $161k on the mortgage.
Over the next 3 months I will be adding down lights, ceiling fans, new door handles, new paint and tiles in the kitchen which currently has battered lino. The bathroom/kitchen were updated ~3 years ago, so only minor touch up work needs to be done on those areas.
I have ~$20k to play with in equity. Spoke to the bank last week, can get a loan for $135k or so and the equity will cover deposit and fees. Good news.
Very keen on an IP, however, all I can afford right now is a property in the far north with areas that have shown a slow capital growth rate but good rental yields.
Would it be better for me to improve the property at Keswick, gain more equity over 18-24 months and buy a more expensive (~$200k+) IP closer to the city in a higher growth rate area with perhaps lower yields OR should I get the equity working ASAP on a property in Elizabeth/Munno Para and let both properties grow over 18-24 months?
Thoughts? Opinions? Suggestions?
Hey there,
sounds like you need to go back to the drawing board and ask yourself what you are trying to acheive by investing….Cashflow and lower capital gains… will get you working less at your day job the more you get the less you work….. +any capital gain is an added bonus
Capital gain
Will generally be neutral or negative cashflow which will keep you in your job and make you work harder as time goes on as the more you get of these the poorer you become in cash reserves and the richer you get in asset (paper) wealth.
Need to find what is driving you passion and then the strategy will follow your chosen path
Cheers
KiwiThanks for the insight Kiwi-Fulla. Will need to map out a plan with the missus before we take the plunge!
Spoke to the bank yesterday, might be able to borrow more than we first thought, which is good news
After the reno on your flat you might find you have made an instand CG through value adding and hence, more equity than you currently have. Could be worth getting the reno out of the way first, then get a new valuation and see where you stand.
Flatout
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