Hi everyone!
I’ve been interested and started investing in property approximately six years ago.
I’ve purchased all four properties since that time and sold one of them about 15 months ago for a good gain.
I’ve purchaesd my properties without using any equity at all and have always ‘dumped’ in a minimum of 30% – 40% deposit on the purchase. They are all positively geared and am searching for my next investment.
A lot ‘other’ investors and experts in the field have told me to purchase more properties by using my equity.
Am I being too conservative not using the existing equity? I know its personal choice and circumstances, however, I’m interested to see what all the members,guests and everybody has to say about this topic of using equity.
For example if the bank tells me I have up to $1,000,000 of equity to utilise I should use at least some of it to invest again without much ‘cash from my pocket. Right? But I still have to sustain payments of the borrowed amount or at least cover the interest payments.
I am quite confortable with the ‘way’ I’m investing but it seems slower than I would like even though the market recently has given me a substantial gain. I would like to keep investing but the pace that Steve McKnight and other investors have done it in is just unbelievable.
I have not researched any of the regional areas as yet for investing.
By the way, I try and focus on the caoital gain of a property but by no means do I disregard the ‘numbers’. If I ‘feel’ the capital gain might be substantial I woul;d try and ‘make’ the ‘numbers’ +ve. By using low deposit strategy, is that high risk??? Personal choice?
Please everybody’s views and opinions are valued.
Thank you for reading this message!
Good Luck everybody!
JL
jlee
Hi Jl,
Congratulations on your achievements to date.
For me I prefer to use the equity to leverage into other property as it I find is easier to achieve this than to save 30%-40% cash for a deposit each time. This way I can achieve my investment goals a little quicker than would otherwise be possible.
If you prefer to use cash deposits you could create a ‘defacto deposit’ by placing your funds into an offset account. This will reduce the interest bill in proportion to the amount in your offset account and still gives you the opportunity of utilising the cash saved should you need it in an emergency.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
For me if I have to save 10% to 20% for deposit then I will never can buy one property. Eventhough I don’t have any equity or property in the first place, I actually use my parent’s property (equity) to purchase my first investment property. Which meant I have to borrow more than 100% of the purchase price to kick start my investment.
I then continue using the increase equity to purchase the next one and so for.
It you are comfortable with what you are doing then don’t force it.
Kind regards
Jet Dollars
Retire Young, Retire Rich . . . REALLY? . . . I didn’t know that!Thanks guys for your reply much appreciated
I reckon you are doing nicely. I would stick to what you are doing. Sounds like you are investing the Jan Somers way. I agree with her way.
I would stay away from rural regional and as Jasn Somers says – you buy your next property when you can afford it.
Me – I have used equity in a property for my next purchase – so its important to see what the numbers are.
Sounds like you’ve done OK so far.
I’ve done both, used equity for some deposits, used cash for others. Personally I like a balance of CG and cashflow properties as that’s what fits my strategy. Yours may be different.
Don’t be too influenced by the pace that others have invested at, only you can decide what is right and comfortable for you. You may decide that Yack is right and that you should stay away from regional/rural (but many here have done very well from them), but make sure it’s your decision not someone elses.
I think one of the most important things about investing is being able to make decisions.
regards,
Rod
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