I can see where you are coming from with this approach Fudge. I am 31 now. I bought my first house at aged 20 – 2 weeks after I graduated uni. I sold it three years later to quit my job and go o/s doing volunteer aid work. If I had applied the thinking you appear to be – pay down debt on fewer properties, I would be in a very comfortable position by now. At the moment, I am looking at +cf to help offset the negatively geared property i own – i didn’t purchase for negative gearing, but for capital growth. the +cf will help out a lot, and let the brisbane based property continue to grow with out emptying my pocket.
On the flip side, if i had had positive cash flow property way back then, I would not have had to sell to go o/s – horses for courses!!
Your approach sounds feasible and doable. good luck with it.
Lisa RThanks Lisa
I mean i must admit i have based my plan on properties valued at 160k and renting at $280 a week.
These properties would be close to +cf properties and wouldn’t be too easy to find, i spose it may be all to do with the property market and what it does in the next couple of years, noone really knows do they. Broz and I still have 2 years till we graduate from Uni and so maybe the bubble will burst before then, we’ll just have to see what happens.
PS: if you would like to see my plan in action you can go to my spreadsheet topic and request it be send to you via email,
Regards
Fudge111[
][][][]Hi fudge,
I do like your plan of attack as it is probably the one i will end up going for. There is merit to both ways, you do just have to find a way that suits you.
With the first plan someone mentioned that there were higher returns on investment made as opposed to paying down the loan. Whilst this is true it is due simply to the fact that you are more highly geared thus increasing your returns, however should something go wrong you are also looking at bigger loses… ie more risk.
I like the pay down the loan idea as it generally allows you to go for more captial growth oriented properties. (Usually neg gear to start with) You have to remember as the house price increases faster the rent growth should also be faster eventually catching and surpassing those that initially had a higher yield but lower potential for growth.
I think it is more suitable for those who are willing to continue working for a while longer and not looking for the initial quick income.
Josh
Sure Josh,
We’re looking long-term. Broz and I can sacrifice for a few years to get the rewards later, we are only young (20) and we aren’t like most youngsters who wanna spend alot. In fact, we can enjoy life just as much living off hardly anything i reckon.
Then when we are older we will be set, money will never be a problem, and i can choose how much i wanna work, grouse!
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