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I think you make some good points!!
You need toi spend money to make money and by utilizing the services of professionals you can potentially save yourself lots of money down the track and also find better opportunities.
As you said, they key is knowing where to draw the line! It's also important to understand exactly what these professionals will do for you and ask the right questions.
Once you fully understand what they are doing, it's much easier to make strategic decisions..
yeah I would definitely look at buying PG properties that have good CG potential, but honestly I haven't done any due diligence on my part to find any so I can't really comment. I guess I've just taken it at face value from what I've read and what people say..that PG properties are most often not in high CG areas. I'm sure you can find ones which are if you do the due diligence as you have..
Good points Jotham!
I've already bought one now looking to purchase 2nd which shouldn't be a problem but you're right that it will be harder to obtain financing for the 3rd, 4th properties which is why I wouldn't at all be opposed to buying PG properties to help with serviceability.
I haven't done enough research on PG properties as yet so I will definitely consider that option. I have a pretty clear end goal so I will look at whatever option will lead to that goal!
Cheers for the advice!
Thanks for the advice Jotham!
The only reason I haven't emphasized buying PG properties is that, from what I gather, PG properties are mostly found in low growth areas, hence this strategy may stifle the growth of my asset base sooner than -ve geared properties. ( I'm assuming equity growth will be faster in -ve properties, hence I can use this as deposits for further accumulation)
Providing that I don't overstretch myself with -ve properties I can, overtime build up a bigger asset base which will provide a bigger cash cow down the line. I'd be open to looking at PG properties if they tick all the boxes, but not just for the sole purpose of offsetting my -ve portfolio..
Thanks for the tips tho!!
Good point FredG!
I'm new to investing so I don't have much tangible experience, however I have read up a lot about various investing strategies. At first the positive cash-flow idea appealed to me as the idea is that you are making money from the get go, albeit a small amount. I figured that over time and by purchasing many +ve cashflow properties like this I could get a passive income to replace my current income.
The problem I have found is that it may not be very realistic to source +ve positive properties frequently enough to make this strategy viable. I have opted for a strategy of investing in negatively geared properties which have all the micro/macro fundamentals for CG and therefore building up a large asset base which will with high probability increase in value. I have around $100k saved and am thinking of investing with minimal deposits in order to be able to invest in more properties. I will, however make sure I have enough cash left over as a buffer, just in case.
My reasoning is exactly what you said FredG, providing I'm not too negatively geared, the rental incomes of my properties will over time exceed their expenses, making them +ve positive anyway. I'm happy to incur the LMI since I am young and it will be capitalised into the loan in order to get more properties over the line and hence increase my asset base. My income will only increase from $60k (grad salary) which will allow me to cover rental income/expense shortfalls until the properties are neutralized or positive. After a certain period of time once I have built up enough quality properties that have increased in value, I can always sell of some of them, use the proceeds to pay down the remaining loans and then have enough +ve cashflow to replace income whilst still retaining a large asset base.
Any comments re this strategy would be appreciated!
