OWN or INVEST?

I have been a passive member of the PI newsletter for a couple of years now. This is my first post.

Here is my story;

The year was 2002 and the market in Sydney where I was went through the roof. We could not afford to buy to live in! so we continued to rent. In the desperation of being left behind I visited a colleague who was also a good friend of mine in a regional town in Victoria. There he briefed me about the property market in his town. Because we were unable to break into the investor frenzied market of Sydney as a last effort we decided to look at buying some thing to help ourselves eventually own a place to live in.

We ended up buying an empty block of land and another block of land with a small cottage on it in another town on our way back. This strategy of ours was +CF, the same as Steve advocates. We did not want to over commit to the bank while also wanted to gain a foot hold in the property market. Since this was the first time in the 20 years of our migrant family’s history in Australia that we were purchasing a property.

Today now as we stand, we now have a +CF property and a combined equity of about a 100,000$ in both the vacant land and the cottage both in 2 different towns.

Our dilemma today is that we still dont own a place to live in and are forking out more than 20K in rent PA!!

We are in a position to leverage the equity of the 2 IP’s, but my question is whether to buy another IP or to buy a place to live in? Any and all views/advise is welcome.

This story does have the ideal beginnings of a +CF, but now I am sort of wondering about the rental accommodation that we have to live with. We have also lost out on the FHOG, I dont know whether it still will be available should we choose to buy a place to live in? Any ideas?

With equity in 2 IP’s and having to rent, what should be the priority? To buy a home to live in and save rent or to use the equity in IP’s to buy more IP’s ideally with +CF?

We are not as savvy as the IP’s are making us look, it was sheer desperation that lead us to invest in the IP’s. Our goals are only to be able to support ourselves in retirement. Not to amass millions or anything of the sort. My queires might sound even dumb to some, but in all earnest I am requesting your help.

This forum I have only briefly been through, some very enlightened investors and forumites have contributed brilliantly. I had also purchased and partly read Steve’s first book “From 0 to 130 Properties in 3.5 Years”. Since 02/3 I have been busy with the full time job and family. Have only been servicing the mortgage on the IP’s which was easy as the cottage was +ively geared so it covered its own mortgage payment as well well as a small portion of the vacant block of land.

JP108