All Topics / Help Needed! / Am I really ready for number 3?

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of LauryLaury
    Member
    @laury
    Join Date: 2012
    Post Count: 35
    February 27, 2012 - 2:54 pm

    I asked that with te kids too but had little choice in the matter!

    I recently experienced a huge jump in rental income from one of my two properties which has increased my cash flow to the point where I believe I am ready for #3.  My finance broker has come up with a finance capacity that would allow me to purchase in the 400-420K area….. BUT…

    Even with the rent increase (of which my manager will take a disgustingly large chunk), we have limited cash flow to spare.  My wife is very lukewarm on the purchase and needs clear cut figures in front of her along with answers for the 'what ifs'

    TIC was my chosen vehicle for the first two purchases and I do like many aspects of their selections, particularly as I am too busy/lazy to do that sort of research myself. I cant help wondering if a more modest or cash flow neutral/positive property woudl be a better option?

    I am open to interstate property but I think I have more chance of persuading my beloved if I am looking at something close to the universities in Perth (in case the kids are smarter than we were!)

    My end game is to secure enough properties that I will be in a position to help my kids purchase and eventually buy the dream farmlet to semi retire on!

    SO do I take the plunge and  my debt to over 1 mil or do I sit on my hands for a little longer?

    Laury  

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 27, 2012 - 9:53 pm

    Hi Laury

    Sounds like you've already devised a goal – you won't achieve it by doing nothing.

    Due to your limited cashflow, perhaps it's an idea to save a bit of a cash buffer before going ahead with the 3rd.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of luke86luke86
    Participant
    @luke86
    Join Date: 2010
    Post Count: 470
    February 27, 2012 - 11:49 pm

    Seeing as your cashflow is tight, then Jamie might have a good point about waiting for a liittle while as there is no point over committing yourself, expecially when rate rises in the next 12 months are not out of the question.

    I would also like to say that I don't think $1m is a lot of debt, so that figure shouldnt be something to stop you from buying investment proeprty.

    Cheers,
    Luke

    Profile photo of Kent CliffeKent Cliffe
    Participant
    @kent-cliffe
    Join Date: 2011
    Post Count: 110
    February 28, 2012 - 2:39 am

    Hi Laury,

    I would recommend rather than using TIC for your next purchase to pick someone from: http://www.rebaa.com.au/

    Take action when you feel comfortable about carrying the cost per week.

    There is some opportunities around Perth Universities. However, often this benefit has already been factored into the property price. For clients who have a similar requirement (such as having easy access to a uni). I have been purchasing properties within 1 or maybe 2 planned future public transport services away from a major university. These clients will get the future capital upside once it's constructed (such as being in walking distance to a new train station) – but they aren't paying a premium for it now.

    Profile photo of luke86luke86
    Participant
    @luke86
    Join Date: 2010
    Post Count: 470
    February 28, 2012 - 3:01 am

    Hi Kent- Could you please provide examples of suburbs where you believe future train stations are planned? Are you talking about the rumoured light rail that might be built to connect universities to the CBD or are you talking about future heavy rail lines (e.g. proposed airport rail link in the 2031 transport plan?

    I am curious as to where you think the future rail will be.

    Cheers,
    Luke

    Profile photo of LauryLaury
    Member
    @laury
    Join Date: 2012
    Post Count: 35
    February 28, 2012 - 1:19 pm

    THanks folks for the words of wisdom.  I am very much the have an idea and want to action it type of person but I am learning patience and caution in this game!   Debts a funny thing isnt it? I remember being terrified of borrowing 100K many years ago and now the total figure doesn't seem to matter – its all about cash flow – oh and staying married………

    Profile photo of SamAus74SamAus74
    Member
    @samaus74
    Join Date: 2012
    Post Count: 19
    February 28, 2012 - 7:45 pm

    Laury, the debt comment you mentioned is interesting.. Our parents always said never owe anyone anything, not realizing the difference between good debt and bad debt…

    I can sleep quiet comfortably knowing I am 1 – 2 million in debt, assuming that if I sold everything today I would at the least break even but more importantly walk away with money in my pocket..

    Sam.

    Profile photo of LauryLaury
    Member
    @laury
    Join Date: 2012
    Post Count: 35
    February 29, 2012 - 5:18 am

    I totally agree with you Sam, I am changing a lifetime's mindset in relation to debt in the space of a few short years.  The only advantage to our parents wisdom is that because of that I have never held a credit card and onoly ever had one car loan! 

    I am comfortable with increasing our good debt but my wife clings to the spectre of a US housing style crash and worries about ending up with nothing. I am confident it wont happen here but any decision we make has to be a joint one.  I am a big fan of the saying 'Its not so much timing the market as time in the market'  and I want to secure a few more properties and hold onto them for a good long time – but patience is a hard thing to learn!

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