G'day everyone, I am currently living overseas with work and am looking to move back to Australia within the next 5years. I have just sold out of a business and have a little over $250k capital to get into the Aussie market with initially a buy and hold strategy. I will most likely be relocating to Sydney and at the moment I am looking over property in the Parramatta or inner west area (like most people it seems) and a little further afield in Newcastle.
I have spoken to the bank and I can get a loan but my question is what in your opinion would be my best option for investing? I am tossing up whether to put all my money into 1 property with minimal loan, pay it off ASAP before investing in a second. The other option would be to split my capital and purchase 2 properties.
What do you guys think would be the better option?
Before you get your finance – come up with the strategy and from there you will be able to determine how much you of the $250k you spend on IP 1, IP 2 and so and even the area to purchase.
Properties in Newcastle, Parramatta and Inner West have completely varying strategies which tell me you havent really nutted out your longer term plan.
I personally (and still do) high LVR lends on loans of up to $300k.
Also don't pay your loan off ASAP. Again depending on the strategy and the type of investor you are – it may be worthwhile accumulating the funds in an offset account which will help support a fairly aggressive ip plan.
TheFinanceShop | Elite Property Finance
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Hi maloose and welcome aboard.
Personally, I'm a fan of leveraging LMI and using smaller deposits to get ahead. It's not a strategy for everyone – but it can work well. I wrote this article on the subject.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
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Pay it off? Blasphemy.
Much better to split your available funds into multiple piles to acquire multiple properties. Keep in mind you cannot live in more than one property at once. So in this regard, the properties need to make sense as investment properties rather than places you wish to reside.
Jacqui Middleton | Middleton Buyers Advocates
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Hi Maloose
Funny you are not the first overseas forum member who has posted such a question over the last few weeks.
We have a couple other Expats member we are sourcing / financing investment properties for who are in the same position and my advice to them has been similar.
Preserve as much of your current capital as you can and look at a 90% lvr as remember when you do return you want to maximise your deductible debt and minimise your non deductible interest.
As far as the areas you mentioned just be careful you are jumping in at the end of the cycle for the applicable area.
There are plenty of areas where yields appear high but they bring with it associated risk.
Personally as a distance investor (I still have a property in the UK) i like to ensure my asset can ride the ups and downs of the market whilst still giving me an acceptable return. It is for this reason i am not convinced i would be looking in the areas you mentioned but each to their own.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for your replies, I have to agree with Shahin in that I am still trying to establish my long term property investment plan. Initially I am just looking for a set and forget structure where the property will look after itself for the next few years without me having to send too much money back here to Aus. Once back in country I'll have more time to value add and for property in Newcastle/parramatta areas I would be looking for a house over a unit which would give me the opportunity to subdivide etc in the future.
I can see its not the best way to invest long term but I am really just looking to get myself started with this particular 'bucket of money' which I can then expand when I return in a few years time.
If the plan is to buy and hold today and then develop, subdivide, etc at a later stage then consider houses rather than units. You are on the right track with Parramatta and Newcaslte areas. Parramatta is a beast that just keeps growing. Some interesting news re Parramatta that came out yesterday:
http://www.smh.com.au/nsw/eat-of-the-night-parramatta-comes-alive-after-dark-20130507-2j5rp.html
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Much better to split your available funds into multiple piles to acquire multiple properties. 
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