Hello!
First time poster, and very new to the investment world, so go lightly
After reading the excellent 0-180 properties book, it has got me thinking about my own situation and the best plan forward. So my details are…..
Mid 30’s – married – no children (DINKS). UK citizen & permanent Australian resident.
Rental property in UK – positively geared, with approximately 1/3 paid off the mortgage (repayment on variable interest rate). House if sold would result in approx $150-200K AUD capital growth.
Currently renting in WA and moving to Melbourne next year… Some of our plans so far have been
1) Concentrate on increasing the repayments against the UK loan to maximise the capital growth
2) Buy a rental property in WA before moving east and rent in Melbourne.
3) Buy a dwelling property in Melbourne.The forecasts for option 3) do not seem that great, and although the market seems to be slowing in WA, it is still forecast to return low single positive figures. So I suppose the advice I’m looking for is whether to increase the investment portfolio or maximise the current rental property.
Thanks in advance for any opinions or new ideas.
Regards
Why don you just cash out and sit on the money for a while? I’ve heard the UK market has stopped in it’s tracks and Perth and Melb probably aren’t going to do much for a while.
Do you need to add to your portfolio now, I believe if you wait a while your money will go a lot further than it will today. You come across as someone who probably doesn’t need to jump right in now, so why hurry?
Thanks G7,
Not doing anything is also another sensible option for our future direction.
We are just keen to keep the potential for another property in the forefront of our minds. Even if we sourced a small negatively geared property, if this doesn’t offset the positively geared house in the UK, we could still be looking at no monthly cost to us, but with longer term capital gain?
Thanks again for your opinion.
Cheers
Hi Brijo,
Not doing anything with the money at the moment might be called masterful inactivity [biggrin] rather than just not doing anything. At the moment there are many who are saying that cash is king.
Are you looking primarily for cashflow positive investment or for capital gain?
Your money is working well for you in your UK property because it is generating cash and probably capital gain since the time of purchase. If you want to make the most out of those gains as well as out of your hard earned income then it would seem wise to ensure maximum returns. To invest in a negatively geared property simply because you have cashflow to support it is not necessarily a good reason, especially if the anticipated growth is going to be relatively slow. In other words, if the investment is not CF+, the returns may be less than bank interest and the risk free return, in which case masterful inactivity may be appropriate in the short term.
Procrastination is harmful but patience is a virtue. There are many views and opinions expressed and not infrequently they are diametrically opposed. I have found great value and benefit in seeking mentors. I have one for business, one in my profession, and one for property investing, particularly in commercial property. These are all people very successful in their areas, and it is a great way to learn from their experiences -> wisdom.
Best wishes for your success in Australia and good luck.
pr
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