I would set up an offset account against one of the IPs and deposit any excess cash into it. When the time comes, you can withdraw this money to use towards a deposit on your next purchase.

Alternatively, if you have the equity, you could look into having one of your investment properties refinanced. You could then use the refinanced portion as a deposit towards your next purchase (no need to use your own cash, use the banks).

Jamie

Yeah, that can be a dillema. I'm not sure how things are looking in that area, but nationally prices are starting to slow down. You could always broaden your horizons and look for an area that hasn't already experienced such massive growth (perhaps a different state).

On a positive note, I can't see those areas mentioned acheiving another year of 30% increases – however, I'd be reluctant to buy in an area that has already acheived such massive growth (I would have missed the boat).

Jamie

Congrats on the soon to arrive baby, it must be an exciting time.

You have a fair bit of equity you can access in your current home. Depending on your current lender, you may be able to top up your loan to 90% LVR, giving you around the $85k mark as a deposit towards an investment loan.

Your servacibility, before your wife goes on mat leave, appears to be quite strong. This will obviously decline once she goes on leave (and stops being paid mat leave).

It might be best to wait until July next year to make the decision about purchasing your first IP. That way, you'll be avoiding any financial stress that may come along with owning a new IP, losing one income and having a new arrival.

I think the HC areas of Wagga will improve over time. It seems that LJ Hooker is selling of a heap of ex HC properties each week, which are being snapped up by investors and rented out for decent yields. I own an IP in Ashmont, and touch wood, haven't had any dramas yet. The yield is high enough to make it CF neutral and as other poster mentioned, there seems to have been a bit of growth in the area recently. I think the time has passed when ex HC properties could be purchased for under $100k.