I am reasonably new to the property investing game and invested at a time when the market was overheated. As such I have an investment property that is now currently valued well under it’s purchase price. I’m in a position where I am able to hang onto the property and hope for a turn around in the market at some time in the future. My question is this, now that the market has cooled off, would now be a good time to buy another similar property and cost average the purchase price of the original property with the new property, and hopefully bring forward my time to break even (or hopefully even profit)?
Hi Coops
Welcome to the forum.
Negative equity is something many people have stated to experience over the last year or 2 whilst the property market has cooled however as long as the reasons you purchased the original property still exist do not panic and whatever you do do not sell for selling sake.
I am assuming that the property is rented and in a good position and if new or relatively new then you are enjoying the benefits of Building Write off and Depreciation.
The market depending on which State you are looking at has some good bargains appearing and opportunities exist to purchase at better than fair value.
The principles of purchasing any property still exist in the present market as they did when the market was on the up.
Ensure that you keep any property separate from you other portfolio and do not allow your Bank or lender to cross collaralise your loans. If your existing lender wishes to re-value your existing property is probably a good idea to seek a new lender for the next IP purchase.
Remember property investing is a long term investment and the market will move up and down over that timeframe.
Richard Taylor
Residential & Commercial Finance Broker
Licensed Financial Planner
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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