Forum Replies Created
Hi Jase and Flic,
Loving your blog! Where did you go to get the door furniture? I am in carlton and am doing up 2 houses at the moment – always on the lookout for a bargain.
Chris
I agree with Marc, especially with regard to comparing yourself to others on the forum. I'm in a similar position to you, 2 IPs, not a snowballs hope in hell of paying stretching to a third at the moment, but 2 years ago I had 1 IP and thought I could never stretch to 2. In the meantime have bought a PPOR and a second property.
The maths is pretty simple. You either need to earn a lot more to buy that next property, or you need to get tenants that pay off your loans. If you cant do either of those, then you do what my wife and I did – sit tight for a while, improve the quality of the IPs if you can, pay extra to your home loan and wait for the rental market to outstrip the interest rates. That could take a few years, but is probably safer (i.e more conservative) than entering into high risk financing. At least at the moment you can afford both properties and you have assets worth $800k.
Good luck!
Hi Pirate,
What did you like about IP#1? What did you learn from buying IP#1? Think about those things and that should put you part way to answering your questions.
Also, some people like to diverisfy their property portfolio. While Steve is a big fan of all cash flow positive properties, Margaret Lomas, another well respected property investor suggests multiple "types" of properties, i.e high yield ones, good capital growth etc, so that you can ride the twists and turns in the market.
I suggest that you work out how much you can afford to pay, how much debt you are happy to carry and then put what you learnt with IP#1 into practice.
As always, the most important thing is to do your research and then get out there and do it!
Good point, Marc, that's exactly what I was talking about. Unfortunately in the "hot" areas and there are more and more in Melbourne at the moment, particularly inner city, most houses advertised on internet etc are up for auction.
You can find private treaty houses, but again, the 'buffer' depends on the area. As Michael says, if you are in a good area the competition is very hot and usually there is a real problem that stops a house selling – busy road/freeway frontage, unliveable condition etc
If you are heading to the outer suburbs, the market is a little flatter, but the top end (>1mill) is pretty hot everywhere.
Good luck!
Chris
Hi PK,
Depends where you are looking and what the property is.
Houses around inner Melbourne – Carlton, Fitzroy, Elwood – add at least 10%. For example 2 places in North Carlton last weekend – one asking 590 plus went for 735, one asking 600plus went for 720.
Most people looking at desirable properties are paying at least 10% more than advertised. At the top end it's even worse. Houses at 900 going for 1.3 M or more.
Newer houses, less desirable, likely to be more accurately marked, but even then 10% would be reasonable.Good Luck!
Hi Devo,
A couple of warning points –
1) Often these articles are puff pieces written with pretty heavy input from the real estate agents (I think it's John Castran at Mt Hotham/Dinner plain)
2) You need to be careful with the Dinner Plain/Mt Hotham difference – Dinner plain properties are a bus ride away from the slopes and therefore less popular
3) Bodycorp can make renovating your unit or upgrading it difficult.
4) Management can be expensive
5) You definitely need to be able to budget, as you may not have much income between September and July
6) Depending on what you believe about global warming – we may not have a ski season in a few years time.It's a pretty specialised area, I dont think it would be a great place to start investing, remembering that you get what you pay for, also!
Why dont you look at units in areas like Brunswick West, Kensington, Yarraville, West Melbourne etc, where you are on a guaranteed capital growth and consistent rental wicket? You may be able to find a "problem" with an easy solution for under 200k.Good luck
