Before you do anything I’d chat to a broker and a accountant. No point using equity from your house if you have no serviceability to keep moving forward and a accountant will help with bitty gritty tax issues that will arise.

There are other options if you want to make your IP’s positive and keep buying. Are the properties in the best condition they can be? Any minor improvements to boost rent? Are you allowing pets? Utilizing offset accounts? Are your rents at market value?

As Benny said I would have a good think about your options and talk to some professionals about your goals and the best way to proceed.

Wouldn’t you rather pay tax on profit than save tax on a negative cash flow asset? As others have said I’d do some more thorough research before proceeding. Good luck with it all.

Just be careful of those towns for investments. Some of them rely heavily on mining and have already seen there day.

That’s right it needs to be heavy on the cash flow. You can do that if it suits your strategy. That’s where a broker can help massively.

Hi Tom and welcome to the forum. So your current plan is to buy residential property and flip it to than buy commercial property as a buy and hold long term strategy?

Flipping residential property is very risky in the current market, so be careful if that is your main plan.

Your best bet would be to see a financial advisor(make sure he is pro property) and let him help you create a strategic plan to get there. Talk to a broker(plenty on this forum) work out how much you can borrow and than begin researching the areas for the growth/cash flow you want.

Plenty of information on this forum. Keep us updated with your progress and happy to help if you have any questions.

• This reply was modified 7 years, 10 months ago by  Tony Fleming.
• This reply was modified 7 years, 10 months ago by  Tony Fleming.

Options are limited. You could try flipping with regional properties, to just get some chunks of passive income until your borrowing power gets better than start buying, renovating and holding.

Have you talked to a broker?

I’d be wary of JV they normally don’t end well. People have different goals and circumstances. Plenty of horror stories out there about people doing well and than one has a baby on the way or a divorce and it unravels quickly.

Congrats on starting so young. I guess with it been two years old probably not much sweat equity you could create. Any features you could add to boost the rent? Any future infrastructure plans for the suburb? I’d talk to a broker at least to see if you have any options available to refinance or restructure the loan etc.

For future properties you don’t need 20% deposit I’d take advantage of LMI as much as possible. You just need to make sure you are buying cash flow+ properties. With interest rates low at the moment it’s never been easier.

If you plan to build a large portfolio you will probably have to start thinking about trusts sooner than later. As for your age goal why not aim earlier. I had enough passive income to retire from the rat race at 28 and I started at 20 as well :)

Best of luck with it all.

Tony

• This reply was modified 7 years, 11 months ago by  Tony Fleming.

Sorry for your loss. It really depends on your end goals? Do you want passive income each week or would you really like a better PPOR? I will say however that buying units in Sydney wouldn’t be the best option at the moment. Yields are low, massive over supply of units and much better places to invest in. Regional NSW/Blue Mountains, Adelaide and select parts of Brisbane would be some areas to consider.

Hope this helps.

Kevin wrote:

Hi guys,
I am very new to property and would love to learn more!
My father recently passed away and I am about to inherit approx $500-$600k. I currently have a mortgage on a property in Sydney that I bought earlier this year. It is worth approx $700k with an outstanding balance under $600k.
My question is. . . what would be the best option for me to do with my inheritance money??? Do I buy a couple of units in Sydney and rent them out as investments? Do I buy “the big house” for me and the wife to live in? Do I stay where I am and put it all against my current mortgage?
Any help/advice would be greatly appreciated!
Thanks, Kev

Looking forward to it :)

You can have both capital growth and yield. 10%+ per annum is pushing it especially with most of the markets in Australia at the moment. If you want strong yields and equity from the get go. I’d be looking for a buy renovate and hold strategy.

Thanks Tony

Hi Tim welcome to the forum.

Probably best to work out your end goals and than work your way back to where you are now. I find this is the easiest way to create a plan on what you want to achieve. You’ve got a very strong position with equity and income so financing won’t be an issue but you should probably make contact with a broker to establish your borrowing power. It will help with mapping out your plans.

There are a number of strong markets in Australia at the moment Adelaide, Brisbane and Regional NSW. My strategy was to buy lower end properties, renovate and rent out to have a strong cash flow position. I was on a low income and that strategy suited me but since you have a much higher income I’d recommend sticking to blue chip properties.

Hope this helps.

Tony