Ive got a few investment properties that I am considering fixing the rate on for 5 years.
It gives me some stability and the ability to forecast incoming/outgoings.

Ive had a quick look and found 5 yr fixed rates being offered as low as 5.95%.

Richard, I'm interested in you view.

Apart from less flexibility, what harm is there in my fixing the majority on my investment loans at a low rate, while still having one that is variable that I can redraw upon?

Cheers

Hey, is this Tuk from BGS?   Just wondering…..

Hi BliXy,

Ive been back in Aus for about 3 years, but was in London for 4-5 years before that.  What we did was temporarily lower our living standards drastically….  The results have been very worthwile.

We bought our first 2 properties while in the UK, both sight unseen.  Our first purchase was in Vanuatu – I got a personal loan from HSBC and paid that off in one year.  It was tough, we moved to a cheaper part of town to save money, a ruff-neck corner of south london – a flat above shops that was jammed between a brothel and a pakistani restaurant.  I rode a bicycle to work and my wife worked shifts as we had a new born baby.  It certainly wasnt easy, but we had goals –  that property has now increased by 800% in 6 years.

After paying this off, we got used to some serious scrimping and we were motivated for more.  So we found a cheap apartment in brisbane.  It bought if from an old lady who had painted the place a rancid pink colour – it was pretty nasty.  But the rooms were fairly large and it was directly opposite a large shopping centre, close to town in a bustling part of south-west Brisbane.  Everyone told us not to buy this apartment, and thought we were crazy.  All I have done to the place is paint it white, and added new blinds – thats all.  Four years later, that apartment is cash positive and its never been unrented – except for a short period when we returned from London.  It worked out beautifully, because we got the first home buyers grant as we fullfilled out obligitory residence within the first 12 months of purchase and it was our first property in Aus.  We managed to get a NAB loan while working in the UK.  This place has since increased in value buy nearly 100%.

Since then we have used the equity in this property to buy a third property on the city fringe that has had a large increase in value over the last 2 years.  Hence the duplication has started…

We chose to buy in Oz and Vanu because this is where we saw our future.  London was very expensive to buy, but by purchasing a property there, we would have been tied into a hefty self-funded mortgage.  By renting and drastically lowing our standards, we were able to save money and redirect that to our Oz investment, where we could take advantage of the exchange rate (then 2.5). Our mortgage was subsidised by the rental income from the apartment.

We are now paying off our own PPoR in Brisbane.  We have 2 kids and we are both working.  Its still not easy, but we are heading in the right direction.  If we didnt make the decision to do something now, while we were in london – we would probably be renting a suburban house and saving a deposit to buy…

Good luck with it all, I know exactly what situation you are in – hence my rambling reply……
My advice is make the most of the exchange rate, live simply and buy well..
The rest is focusing on the finish line and discipline, discipline, discipline…
Good Luck

Inala, Darra and Logan are the 3 areas of brisbane with a bad reputation.

Persoanally I dont mind Darra – its got good rail connections (city 10 min exp), neighbours some middle class suburban areas, large blocks and you can pick up some timbre queenslanders/post wars with alot of potential for refurb.  Although Darra does also neighbour areas like Wacol – which is pretty rough and industrial… 

Inala on the other hand has mostly brick square shaped homes.  I went for a drive around there a few months ago to check it out, and the types of houses reminded me alot of suburds in South Central Los Angeles.  Houses there look like they are government built in the 60s. Very square, quaint, bagged brick homes – almost identical to each other.    Most houses are neat and the locals are mostly house proud.  Years from now its querkyness will probably become trendy. 

Logan – for me it too far out.  I prefer areas like Darra that are more accessible to the city and have some older homes.  Despite all the talk, I honestly think it will be years before Logan comes good.  Darra and even Inala will give better results I feel.

I disagree here mate…  Sure you cannot extend an extra room onto an appartment, but there is still a hell of a lot that you can do to add value – if you get the right apartment.  paint job, flooring, new kitchens, bathrooms, etc………

Thing are changing – the right appartment in a city fringe area will out perform a house and land in the suburbs in alot of cities.
The demoraphics are changing – people are moving back into the city fringe areas driving prices up..

land = growth is all fair and good, but not when the only land you can afford is way out in the sticks. 
I like the low set, boutique apartments in good areas…

Apartments are also a great way to start for a lot of people – its been very good to me.

Dont forget that you can negotiate the PM fees.
I pay 6% at a reputable PM who charges 8% usually.

So long as you dont bargain too hard and get the PM off side or dissinterested in doing the best job for you!

I can confirm that many appartments in Brisbanes City fringe areas are selling for (or above) asking price.  I have seen places under contract, where the open day still gos ahead.  I guess this is as back up incase finance falls through.

But, this has been happening for a few months now in certain areas.  ie Toowong, St Lucia, Paddington, Taringa.

Come to think of it, Ive seen the same thing with houses for the last few months.  Investors are definately back in the market.