Hey Victor,

I'll be quick.

1. Set a goal (e.g. "This year i want to buy an investment property. I can spend up to X dollars. I want X dollars rent. By earning x dollars rental income I will still live well and not cut off myself from the world and work overtime everyday".)

2. Gather the information you need to get to your goal (maybe read a few books, ask a 1000 questions, etc)

Thats the best way to start – don't worry about all the little details now…..you learn by doing.

Best advice I can give to new starters is this:

– Set ONE goal to start with
– Start small.

That is, write down something to the effect of: This year I want to buy an investment property. I will spend up to (say) $200,000.

With a goal statement like that, you have something to work towards. When you have something to work towards, that's when you know what information you will need to get where you want to go. Knowledge is power only when it helps go where you want to go.

When you acheive your first milestone of buying your first property, then set another goal. Only this time, your goal will most definitely be bigger, better and more challenging; and you'll be up to it because of the experience and confidence gained from buying your first IP.

One step at a time…..that's the only logical way!

Good luck.

Michael.

Unless holding on to it will cause you much financial stress and lifestyle limitations for a few years to come, I'd say definitely hold on. Forget complex analysis and heresay – just look at Sydney's property cycle for the last 50 or so years. Same story every 10 years. Booming for 3-4 years, flat or declining slightly for maybe 5 years, then coming up strongly again. Learn from history and hold on to it if you can, because you definitely will MAKE money if you do and lose money if you sell now.

But as I said, it depends on whether the sacrifices you need to make now are worth the potential financial gains that you will make later.

The sweet tastes sweeter after you've tasted the bitter!
All the best!

Hey Dave,

Straight off the bat, your situation isn’t as bad as you make it out to be. Your combined incomes are solid as you say, and you can probably afford to hold on to the property quite easily, even if you move. After you move, your financial situation will be probably be very similar to now, right, given that rent paid and rent acquired will cancel each other out.

The fact that you’re going to owe ~$380,000 on an investment property that you’re renting out (if you decide to hold) will allow you to get heaps of money back from the taxman at the end of the financial year, given your impressive income. You probably don’t get that benefit now, because you live in your house, so its not an “investment”.

Also remember that if you cut your losses now, you’ll probably end up buying another property (as you suggest) in the next few years and you’re back to square one with debt – but you would have lost $25k or so.

Given the above, I’d hold on. In 3 or 4 years the market will start to pick up. It’s not a long time when you think about it (See, I’m trying to convince both you and me here, I’m in a similar situation .

And remember…..the sweet tastes sweeter after you’ve tasted the bitter!

Best of luck,
Mk

Hey mate,

If you are after capital growth, I think a house is the way to go. There’s only a certain amount of land on this earth, more can’t be built. And from what I’ve noticed land grows in capital value quicker than units do. It’s land vs airspace.

Don’t count on expenses for a unit to be less, or for there to be less headaches associated with a unit. I bought a unit in Sydney 4 years ago, and I’ve come to realise that, slowly, strata fees do add up and strata management can charge special fees (on top of strata) for fixing fences, restoring gutters, painting , etc. It’s generally out of your control, especially if you’re overseas!

As well, owning a house, you have control over what you want to repair or renovate. So, if your back fence is not in the best shape, you may want to replace it or you might want to see it out another year if you can because you’re (say) low on cash. Not so with a strata unit. If management deem it necessary to replace the surrounding fence, then you’re forking out, like it or not.

So IMHO, go for land.

Mk