All Topics / Help Needed! / whats my next step?
I have been investing from the age of 18, where i bought my first property in Rye in a joint venture with my parents (paid off) At the age of 21 i purchased my second investment property (3 year gap and it is half paid off). At 25 i made another joint venture, this time with my sister, reason being to share the load as she didnt have a full time job yet,IMO seems like a good investment as i can build 2 units on it in the future.
I am now 26 and am looking to buy another property. Ive been thinking though! I feel that im always playing catch up with paying my properties, i think that it takes me too long to re invest. Id like to be making more movement on the real estate market but i seem to be using the “old fashioned” style of investing. should i be buying cheaper properties? In regards to +ve cashflow in melbourne, well non existant IMO.
feel free to prove me wrong.how do i change my situation so that im able to make more moves on the real estate front?
what would you do in this situation ?
my money keeps running out! (buying limit would be around 350k according to mr bank)open to suggestions
It sounds like you are doing well to me. Keep what you have and when you can afford it do it again. Your IPs will go up, your debt will go down and I think you are probably WAY ahead of most 26 year olds.
If it aint broke, don’t fix it.
Regards, Wylie.
people keep telling me i want to do too much too quick. maybe there is truth in that but i guess i have a drive to do as much as i can. Although i appriciate your praise, what i wanted to know is how i can improve my real estate investing techniques. I seem to be buying a property every 3 years. What steps would i need to take to be able to buy more properties more frequently ?
If there are others that invest more frequently than this id like to hear from you .
cheers
G’day Property Passion,
I’m in a similar situation to you… i bough t my first IP at 19, now have 2 IPs and 50% of 2 blocks in yanchep. I’ve seen many great opportunities go past and haven’t been able to act on them, purely because the bank won’t lend me any more:( Unfortunately for me it’s bit of a waiting game for the CG before I can invest anymore!
It sounds like you have a fair bit of equity behind you… though what is your financial goal? Your investment technique is dependant on whether you want to create cashflow, or whether you’re in for the quick CG?
You could look at starting up a few House and Land packages and selling them off, or if you are looking to acquiring a lot of cash flow properties by buying interstate, or overseas…
– Wayne
Wayne Leech
*Below are links to my websites – any feedback, comments would be appreciated:)
http://www.holidayhomeswa.com.au – Holiday Homes in Western Australia
http://www.wheretostaywa.com.au – Accommodation in Western Australia
http://www.homesearcher.com.au – List your property for FREEFirstly, you have done unbelievably well.
Although you don’t say it, it seems like you may be taking out P&I loans. If you want to speed up aquiring properties then you should be taking out interest only loans to improve your cash flow.
Property Passion sounds very modest and that’s how I am, I don’t want to know how well I did, I want to improve it.
My opinion is that there is no need to pay off a property when buying for investment purposes, what you want to do is just pay interest only or only pay off enough for the property to be able to pa offitself through it’s rental returns.
This way it free’s you up to buy another property within 6-12 months.
Alot depends on your taxable income and personal goals ect.. but as shake-the-disease just mentioned igher yeild properties are found interstate, we beleive in Perth & Qld.
Hope this helps.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auGPS wayne and shake, thankyou for your advice, i really do appriciate it.
just a couple of questions, firstly what are P&I loans and what are intrest only loans?
Also if i dont try and pay of any capital, and just cover the intrest, yes it will free up some money, but IF intrest rates go up then am i at risk of losing the property, or at least getting myself in over my head?
feedback would be great ![biggrin]
P&I loan is prinsipal and interest repayments and
and interest only loans means that you only pay interest on the loan , so your loan never decreases, this make your payments cheaper so you can free up cash flow.
I dont like interest only loans it sounds scarey to me , but Im a chichen when it comes to never paying some thing off.
Interest only loans can work good when property prices are increasing quickly it allows you make minimam payments and quick capital gains.
But if prices dont go up for a few years it can be a waste of time .Monopoly, my favourite game
Property passion- nah, don’t listen to the people telling you that you want to do it all too quick- go for it!!
Interest only is good for taxation purposes on cash flow type properties- i believe.
Is it possible that you can spend some time renovating or re-furbishing the existing properties to create more equity in them- therefore a greater borrowing capacity, therefore more opportunity to purchase multipleproperties??
Best of luck
Jarrod.
http://www.jenterprisegroup.com.au
data.communications.entertainment systemsYou really need to minimise your outgoings, as long a the rent is covering the interest onlyloan, then you don’t need to worry much about that investment, if interest goes up, then you would have som cash in an offset account and your income.
This will allow you to buy more sooner if that’s what you want to do..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auOk now its starting to make a little more sense.
Rick im very much like you in regards to finding it scary to NOT pay an IP off (at least some of it) but im starting to think that i need to expand a little and buy more than one property every 3 years. Maybe paying the intest in my IP’s and freeing up some money is the way to go .Ive seen many people over borrow nad then explode a few years down the track, due to bad management, intrest increases or unforseen circumstances. i dont want to be one of those people!!!!
On the other hand i also want to step out of the square a little and push myself.
cheers [biggrin]
Your on the right track there Propert Passion, just keep the passion & the drive goin & you will get there… Make sure you keep your Research up though!!
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auyep i realise thats an important part of investing.
thanks for all the above advice
Its certainly possible to continue to increase your portfolio and income, and with properties in Vic. All you have to do is find them. If you build your portfolio with cash flow positive properties, your net income will increase and you can keep your debt servicability.I believe one needs to keep $$$$ for contingencies such as interest rises, short periods of untennanted property, etc.I tend to use P&I finance, with only 1 or 2 interest only loans at any time,and use interest only as fall back position for others if required – never had to back off to interest only though. I’llsend you some info.
Steve B
Originally posted by Property Passion:GPS wayne and shake, thankyou for your advice, i really do appriciate it.
just a couple of questions, firstly what are P&I loans and what are intrest only loans?
Also if i dont try and pay of any capital, and just cover the intrest, yes it will free up some money, but IF intrest rates go up then am i at risk of losing the property, or at least getting myself in over my head?
feedback would be great ![biggrin]
All my investment loans are interest only. If you’re worried about rates going up just get them fixed. Most loans also allow you to add lump sums to interest only loans so you can pay down the principle, or have extra money sitting in an offset account.
Hope this helps.
V
Totally agree with Miss v,
It cases of trying to get a tax advantage from an investment, you don’t really want to pay it off..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auhmmm this is quite true, and and now looking at intrest only loans as an option, i guess you learn all the time, thats why this forum is so great.
cheers
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