Hi Ajay

I haven't got any specific advice on Tamworth but would be very interested to hear your thoughts on the place (particularly in comparison to Wagga) when you return. These were two regional places that I looked into last year but ended up going with Wagga.

Best of luck

Jamie

Hi Alan

Welcome to the forum.

Only you can answer that question. Look at how much it costs to hold your IP at present and how much your new mortgage repayments will be. Combine those expenses with your living expenses and work out what you have left over.

Are there any ways you can improve the cashflow from your IP? Is your IP loan currently interest only? Have you got a depreciation schedule? Can you increase the rent at all?

Cheers

Jamie

Can you afford it?

Hi Jac

Are your Wagga IPs in any of the areas mentioned above? How have they been performing? Can you recommend a good property manager?

Cheers

Jamie

Yep, that was my impression as well. Do you live in Wagga Jacqui?

Hi Stevo

Welcome to the forum. I'd just set-up an interest only loan with an offset attached. Place any spare cash you have in it, and you won't need to worry about issues with the taxman when it comes to redrawing later on.

Hi Ajay

Sure. It's Tarakan Ave. I didn't find it rough. I was actually suprised at how "decent" Ashmont actually appeared.

The property I bought was from an elderly lady who took great care of it. The neighbours also seem to take pride in their houses. There is a new retirement village on the street and there's some relatively newish townhouses behind it.

I must admit, I've never lived in the area nor have I spent a great deal of time there. But during my short visit, I found it to be a lot different to what I had in mind.

Hi again

No worries.

One thing to remember though – it's not just property management fees. There's rates, insurance, body corp (if applicable), etc. However, you'll also be able to claim depreciation on the property when it becomes an IP (don't forget to grab a depreciation schedule).

You should be able to get by with just a real estate agent appraisal as opposed to a bank val. Might be an idea to confirm this with you accountant though (mine said it was fine).

That's good news re the bank and the IO with 100% offset – best to stick with that lender for now.

Cheers

Jamie 

Hi Jcar

What exactly did the person say? The one that said you couldn't move into the new place?

Seems strange.

Hi Wickl

Firstly, best of luck with reaching your goal. The first one is always the hardest but with some vision, knowledge and a bit of creativity I'm sure you'll own multiple properties in no time.

There's absolutely nothing wrong with renting in the area you'd like to live and investing elsewhere. A mortgage on a $700k PPOR can effect your borrowing capacity. Therefore, if you're aiming to own multiple properties then renting (providing the rent is lower than what the repayments would be) is not a bad option.

Either option 1 or 2 could work. If it were me, I'd be looking for something I can add value you to – something that will enable me to create equity straight away – so I can get moving on the next IP. It doesn't need to be a full-blown reno – it's amazing how much value new flooring, a lick of paint, some nice light fittings and a spruced up kitchen can add .

This is what my wife and I done when we started. We purchased a run-down unit that just needed some cosmetic touch ups. We spent one month doing up the place (after work hours and w/ends – which I don't get too many of anymore!). We were also granted access to the property after exchange and before settlement. Therefore, when we finally settled on the property – all the reno's were complete and the tenant moved in the next day. We had it revalued 3 months later – it was worth $40k more. We used that equity for the next IP. There was a write up on this little story in Your Investment Property mag a few months back – feel free to shoot me an email if you'd like to have a read and I'll send you the PDF copy.

I guess that didn't directly answer your question re options 1 or 2 but it might give some food for thought. 

All the best with the investing!

Jamie 

True – but still a goal to be proud of.