Where to go after buying 2 X 2BR Units…

Hi Johhny,

Great work to begin with. What’s your end goal? Retire by the age of 40? Have 10 properties by the time you’re 30? What prompted you to buy the units where they are now? Cash flow, capital growth, close to home, know the market?

I too am a goal oriented person and need goals to work towards. What I found works best for me is to have the end goal but also trackable and achievable goals along the way to help keep me motivated. As corny as it is I find the SMART goals the way to go. So, Specific, Measurable, Achievable, Realistic and Time bound so I set my goals to that.

So you say you want to start saving again for the next property but not sure where? So, let’s say for arguments sake you want to save $20k and that will take you 12 months to do it so set the aim of $20k in savings by August 2015 and as a side task during that time identify what and where your next investment will be so by the time you reach your savings target you will be ready to go and hopefully in the mean time you’ve had some capital growth too.

But also during that time, figure out your strategy too so seeing as though you reno’d your current unit I take it you’re handy so do you want to keep doing reno’s to generate equity or buy ready to go properties? What do you enjoy doing to keep you motivated?

Hi JohnnyP

You have done a great job of getting two properties by the age of 21, and now you have exposure to market growth in that area. I’m guessing since you’ve renovated them and are holding them, you’re looking to keep holding them for the long term? If so, you’ve got many years ahead to see a few cycles of growth in Adelaide that will increase their value. I wouldn’t over-complicate things, decide what your goal is. It may only take three or four properties, when fully paid off, to bring in enough income for you to live off. But if you want 50, who’s to say that’s not a great goal? Just know why you chose that goal, rather than some random number or retirement sum plucked from thin air. If you’d like to buy another property, perhaps consider where you may get some capital growth in the future. Renovating from a distance can be very time and money intensive, a different experience than renovating in the immediate area where you can do much of the labour and monitor the progress daily. If you do decide to look further, make sure you get to know the area well. There’s no rush, take your time and look for characteristics that will drive up future values and consistently get tenants through both good and bad times.

Of course, you could always buy another local reno unit project and keep going with what you’re doing there. Perhaps you might like to sell it after the reno, if the cashflow is tight. You could put the profit against your existing investment loan to make the cashflow more positive. Over time, you’ll pay off those loans and can get the rent coming in each month with no loans to repay, build some passive income for you there. If the cashflow is fine, why not hold the third one too? There’s no rule against only investing in the same area! But do be aware of things like the land tax threshold, check out the SA limit if you’re not sure of it already and see the impact on your wallet if you go over it at the relevant date (30 June from memory).

Being so young, you can afford to take some risks if you want to. Other investors who begin in their 50s or 60s often don’t feel as comfortable with taking a risk as they need a ‘sure thing’ for their retirement. There are so many options to choose with property it can feel a bit overwhelming. You need to feel comfortable with your choices, but if there is something you’d love to try then give it a red hot go. Life is short, time is on your side.

Great question to ask, and I hope you have some fun with the next purchase. Enjoy the journey :)

Best wishes for your future.

Hi Johnny

Wow, nice one! Two properties under your belt at such a young age and covering their own costs. Good work – you have the best of both worlds. You are investing AND it’s not compromising your personal budget and us such your lifestyle. You are young and should be enjoying life somewhat along the way, after all :)

If you were to “save for your next deposit”, can you give an indication of what size deposit you are talking, and the timeframe it would take to save it?

Hi Johnny,
In case you haven’t seen these already, do check out this post (started about 3 years ago, but some great input in first three pages…)

https://www.propertyinvesting.com/topic/4404268-30-properties-before-25-finance/

And then, there’s a catch-all thread that has a heap of links – one near the end of the first page points you to how a young bloke amassed a huge portfolio in a short time. I think he was a pizza delivery driver from memory, so not overly flush with ready cash :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/

Take some ideas away from those, and see how they might fit with your situation,

Benny