hi all
im looking for advice on taking the next step. i currently own 1ip and am wondering when is it the right time to buy ip# 2? what do you need to consider aside from being able to fund mortgage repayments on a monthly basis?
also when shopping for ip#2 – do you look again for the same things in an ip? ie high rent income yield, growth opportunity, good nick etc. ?
TIA !
no one ?
Hi pirate,
no answers?
Hmm….Maybe the questions are a bit generic (no approx figures, cash flow / income positions, locations) and with very little information for people to be able to help properly. But I will give it a go!I remember when I bought my small 2nd IP (about 5 yrs ago) I set some personal goals and researched a specific are that I knew well and had confidence in. I personally base all my purchases on certain factors/questions, a few being (in no particular order);
A) Potential for growth for that area/suburb in 3-5 years (so I can draw down on the equity and
keep the momentum in my investing). Rather than wait 7-10 while the grass grows greener.
Are we able to maintain repayments and overheads (with income/cash flow/rent etc..) in
all current market climates?
C) What can I do to this property to make money out of it in 12-18 months apart from rent it out?
I personally prefer not to do reno's.
D) Buying for sub-divi or development potential only (This works for me, but may not be your bag as it has a higher risk component).
E) Don’t try and fit a square peg in a round hole. If the numbers don’t stack up, move on.
F) Everyone has differing “right” times to buy. For me it’s as soon as I’m able.
While these factors are not rocket science or anything new, I do try and stick to them with each one. As far as taking the step? Due diligence while educating your-self and just doing it (within reason and without being irresponsible). It gets easier with each one in terms of knowing what will work for you and what won’t. Slowly building a track record (over 6+ years for me) of investing has especially been easier on my relationship with my bank manager.
Hope this helps ya!
Cheers
HutchHi Pirate,
What did you like about IP#1? What did you learn from buying IP#1? Think about those things and that should put you part way to answering your questions.
Also, some people like to diverisfy their property portfolio. While Steve is a big fan of all cash flow positive properties, Margaret Lomas, another well respected property investor suggests multiple "types" of properties, i.e high yield ones, good capital growth etc, so that you can ride the twists and turns in the market.
I suggest that you work out how much you can afford to pay, how much debt you are happy to carry and then put what you learnt with IP#1 into practice.
As always, the most important thing is to do your research and then get out there and do it!
Hi Hutch. thanks so much for ur post, those were exactly the type of 'generic' questions i was looking for.
merryc – with ip#1 – well.. i think it was a bad choice?
i learnt alot from it, but i feel that i lack the real fundamentals and dont want to do it again. I think my mistake was buying it in the high period. So im tossing up now wether or not to buy another ip, or rennovate ip 1 in return for a higher rent.. but i dont think the numbers will pan out ?Anyways, thanks for your posts folks.. its a starting point for me
Hey,
Never used a forum before, bear with me………
What do you guys think of investment companies. People who do the research and find out the facts and figures for you? Has anyone tried this? Anynone looked into it and didnt go ahead? Why?
Im looking at my 2nd IP and all advice would be appreciated.
Also does anyone who has more properties, like 5 or more rely on any other cash flow other than there normal proffesions? If you have done this on just your regular weekly income how much a week do you throw in to keep things afloat? Do you ahve agencies look after your properties?
Thanks everyone.
Ta
Are we able to maintain repayments and overheads (with income/
i learnt alot from it, but i feel that i lack the real fundamentals and dont want to do it again. I think my mistake was buying it in the high period. So im tossing up now wether or not to buy another ip, or rennovate ip 1 in return for a higher rent.. but i dont think the numbers will pan out ?
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