All Topics / Help Needed! / Advise in purchasing 2nd IP

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  • Profile photo of ray83ray83
    Member
    @ray83
    Join Date: 2008
    Post Count: 1
    March 7, 2008 - 4:42 am

    Hi i am new to this forum…

    I give you guys a quick re-down of where im currently at, 2 years ago i bought a 2 bedroom apartment, 1 bathroom, 1car park and on Level 30 (brand new, but not off the plan) in Southbank in melbourne(City Tower) for $480,000.  Currently i have $330,000 mortgage  left to pay. My monthly repayments is $1300 per fortnight and im receiving $450 pw in rent.  Basically after all the deducation i calculated i fork out about $260 p/w out of my own pocket.  Also i m earning $55k per year.

    Here is where i need help in;

    I am not sure what the captial growth is in the last 2 years as i haven't done an evaluation.  So right now i have around $150k in equity + any additional capital growth.  What options do i have to purchase my 2nd IP ?

    Also if someone can give me a estimate what my southbank property is worth now that will be great.

    THANKS!

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763
    March 8, 2008 - 9:58 am

    Hi Ray83,

    Welcome to the forum and thanks for making a post.

    Before thinking about another property, I'd encourage you to get a better handle on how your apartment is travelling. That is, your ability to handle more property will depend on how well you management your money and investment, and it seems like that could be something you could sharpen a little.

    For example, $260 p/w represents nearly 25% of your pre-tax salary. Could you afford another IP at the same negative return?

    Specifically, I would:

    1. Contact a r/e agent to get an appraisal of the value
    2. Understand my loan repayment obligations. Perhaps you could refinance for a cheaper rate and save some money
    3. Create a plan, and then relate your current property and also future purchases to it

    In terms of a 2nd, 3rd etc IP, it seems you have a long-term growth asset, so now you may like to do a shorter term quick-cash deal or else look for an investment that delivers a cashflow return.

    All the best,

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

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