Gday[cap]
I am convinced property investing is the way to go
I have read quite a bit of the property investing books around, however, I would like some advice on strategy/goals. How many properties should I aim for over the next few years.
I have managed to save $60K and I earn about $900 a fortnight.
What would you do if you were in my position starting off. I’m keen to get started.
B
Hi Bert
I am still very new at this game, but what I have learnt so far is before I part with my hard earned money, do a lot of research. I have the money to buy some investment properties now, but I just don’t feel confident enough. I am using the internet to look at different areas, e-mailing real estate agent for info and checking out the demographics of areas. Also reading this site has been extremely useful. There are so many people on this forum with fantastic ideas.
Read, learn then spend.Simon
Cheers mate
Hi bert
If i was in your situation then i’d keep an eye out for fixer uppers, look for a property that you can add a lot of value to by giving it a coat of paint and some new floor covering. Try to find something that is structurally good but cosmetically poor.
I bought a home in 2003 in Shepparton (vic) it was a mess it had some broken windows and punch holes in the plaster and some dog poo inside. The home needed heaps of work it needed a new stove , repaint inside and out and new floor coverings. Anyway it was on the market of 79k (well below market) i got it for 62k and after 20k spent it was worth 125k and is now rented at 180pw. Sometimes things that look bad like broken windows aren’t too bad these cost $150 to fix holes in the plaster only cost $200 and the dog poo was removed easily. I use this as an example of how a fix up of a structurally fine building can work.Once you have added a bit of value you can refinance and hopefullly get all your own money out of the deal as a deposit for the next property. It will take a lot of time to learn the market and a lot of effort to fix it up but the experience should be well worth it as well as the profit if you can do it successfully.
Thats just one idea i think is worth considerating, all the best, ps NZ is a fantastic place for this strategy.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Firstly burt you are looking in the right direction if you are here. Your reasonable income might become strained if investing in negative geared property. I have been fortunate enough (due to alot of hard work mainly) to be able to “do up” a couple of properties, that were positive geared before I touched them up, but are now performing very well indeed.
Before you buy a fixer upper I think you need to ask yourself if you can do whats required, it definatly wont be easy (but the best things in life never are). My properties are in the next suburb which made it easy to renovate them as I could do it during the day and go home at night (you dont want to sleep on the floor of a house that has no shower and smells of fresh paint, well I don’t). If you manage to get a long settlement coupled to early access you might be able to renovate the entire house before you settle and have tenants lined up to move in on settlement day (this depends on where you buy, beware of gazumping). If your not the hands on type of person then you could get someone to renovate it for you but it is another cost to eat into your reserves.
Look in detail at what loan options are open to you as this can cost you money later down the track if you dont set it up to suit you now. (this was my problem as I didnt fully understand what options were available to me when I started). This includes reducing your own morgage faster if you have one.
Lastly it will be frustrating to get started and you will find a few bumps in the road on your first property but it does get easier each time.wish you the best
benBurt,
I agree with the guys above – a renovation of some sort may be a good way for you to get started.
My own plan consists of doing some basic (cosmetic not structural) renovations to generate extra cash, and then either selling or refinancing. This depends on how the balance of selling (and capital gains tax) against holding with tenants (is it positively geared enough not to impact servicability)works out.
Either way, my intention with each is to take the profit and reinvest in further positively geared property.Cameron
PS: my own starting point is not far different to yours, although I have some experience in prior negatively geared investment.
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