Hi Deb…

Just an opinion:
I think it all comes down to “what do you want out of this?”….

Are you doing the renovations with the intention to sell (for cap growth with no CGT as it is your PPOR) or is it more of a lifestyle choice … ie. for family?

I suppose a lot of people on this website focus on cash flow…
so they would ask the question…. am I going to get a better “yield” elsewhere…
Personally I tend to agree with “LA aussie”…
If you sell, you incur a an insant loss in selling costs…

So I would focus on ways to improve the yields in the current state…
Are your current investment properties at their “highest and best use”….? Can you improve the return on what you already have before looking for another…?

Having said that… If you think that you can get better deals that could outweigh the selling costs from Kalgoorlie… then weigh that up also…

Once these questions have been answered and your confident
that you can afford to purchase another one… another loan shouldn’t be a problem… there’s always someone willing to lend money.

All the best,
Anthony.

Keep saving…
Keep researching… read all the books you can on investing…
Don’t worry about “missing the boat”…

Overtime you will learn that a true investor can make money in ANY market.

Just for now keep saving… into Bank West or ING is a good start…
You’re in a great position… Keep it going…
Enjoying getting richer every week.

hi Ben,

You wrote:

“IP – Current Market Value: $239000
Mortgage: $130000
Current Rent: $165 (could easily be $200 – once lease runs out in May)

Second Property (current residence)
Market Value: $255000
Mortgage: $185000″

As a rule of thumb, it generally pays to pay of your PPOR first for tax reasons.
therefore, you would transfer the equity from your IP to your PPOR, and transfer the loan from your PPOR to your IP, that way ALL of the interest and loan costs are tax deductible.

Ofcourse, if you’re planning to move pretty soon to QLD…
then, jack the rent up for both of them when you can and make the move… You shouldn’t have do many dramas trying to get another loan… just make sure you are comfortable with repayments etc if you’re not in a cash flow +ve position.

cheers,

Hi gina,

Any tenant in Sydney (especially in inner city areas)…
would be expecting a rental increase due to:

Rising interest rates, maintainance,
security costs, insurance, and inflation.

Don’t worry about the fan [biggrin]

Hi drainosky,

Assuming financial independance is your goal…

How old are you?
Are you working? What sort of income?
Are you renting? in which area?

If you can answer these questions,
I’m sure people here will be able to help you out even more.

Cheers,

“There is nothing scarier than ignorance in action”

10 yrs ago it was $50K, today I think $100K+.
Ofcourse that is just the beginning for some.

“There is nothing scarier than ignorance in action”

My strategy is to focus on cash flow and invest in the lower end of the mkt. Normally better rental returns.

Given that it sounds like a regional area (2073 sq)…
and you are already residing in the front block…
could you perhaps run a bed n breakfast from there…?
(Ofcourse it depends on tourism / holiday demand in the area)…
Just a thought…. Either way, I’d go build small… Don’t put all your moeny into the one property… Spread the cash a little.

Good luck,
Anthony.

Shops, sheds, hostels, land, car parks, coke machines, car parks….

They could all be good investments if the numbers work.

http://www.allhomes.com.au is my one stop shop for Canberra purchases, rentals, tradies, etc…

“I have looked at some statistics from the ABS.
Basically it indicated that judging by past performance from 1976… we have a few years before things will pick up in Sydney.
The last cycles were 7 years & 11 years… We are now 2 years since the last peak and counting. Having said that, it’s always good to note that these are general figures. I’ve seen 25% cap growth on property bought this year in another city where statistically the growth has been around 4% for that city for the year.”

That was something which I had posted on a similar thread.

Now keeping that in mind… you are in a great situation where you have a lot of cash to invest. Let’s assume you have $500K cash to play with. Honestly, I can’t see much return on that cash if invested in Sydney over the next few years… Perhaps things won’t budge until 2008/9.

Having said that if it were a lifestyle choice, you see a future in Sydney and you were to buy into blue-chip real estate. ie. Pyrmont, Neutral Bay, Mosman…. then perhaps it’s not a bad idea. Given that our population is expected to rise to 26 mio by 2026 (ABS) and demand will still be on the central areas… that’s where I would be looking. Research has shown that we expect to see more than 1.2 million people to call sydney home in 20 years. (Over 5M ppl)
Given the tragic state of our rail system (Blow up the pokies)….
if it takes 40 minutes to travel from outer sydney now… than I’m sure it will take atleast 1hr if not more in 20 years.
Where will people want to stay? 100 years ago it was Sydney city and it will be in 100 years time.

Ofcourse it would come down to what your needs and wants are.
Personally I enjoy renting in Sydney with my gf.
We earn Sydney dollars, rent our car space out for $200 p/m (which pays for all our bills)… we don’t own a car… love using cabcharge…
walk to work… where we are thankful to work with great people… and invest in real estate outside sydney…
Not for everyone, but we’re doing ok, and if we can stand the neighbours… we can always move

Personally with $500K… I’d invest in a diversified $1.5 mio dollar portfolio…. (not just property) let the tenants pay of P&I and rent cheap elsewhere… before you know it, it’ll turn into passive income.
Perhaps then $2000 p/w income….

Just an opinion… not for everyone.
No matter which way you decide, you guys have a good headstart.

Regards,
Anthony.