Hi all,
I have one property that we own and live in. We are looking at purchasing more in the future.
Just wondering how long it took everyone to take the step from 1st property to their 2nd? Or from the home they live in to first investment?
Stories are great too. I love reading what others have done
Thanks all
As a rule, time is not the issue but rather equity.
I never purchase another property until I have 20% deposit and a buffer amount to last me 3-5 years.By buffer I mean the shortfall between rent recieved and all other outgoings like interest,council ect.Without having a buffer (either in savings or in a line of credit) , then you are speculating and making it risky.I would rather sleep easily at night.
Also.I get my 20% deposits from line of credits from other properties.I never actually open up my wallet for any property costs at any stage except for the very first one. This makes it possible to keep buying and cover all costs without earning a large income.I certainly don't and own 4 properties in expensive suburbs of Sydney like Bronte and the northern beaches.
We did things a bit differently to shanematt's process.
When we bought our home, we borrowed up to the absolute maximum we could. It was in late 2006, when the Perth property market was still booming like there was no tomorrow. We knew that if we didn't buy a house at that point, that we'd probably miss the boat altogether.
Anyhow, due to a combination of an increase in equity in our home of about 100K over a nine month period, as well as both of us getting promoted, both our equity and income were sufficient for us to buy not one, but two investment properties, just under a year later.
Two years later, we have four investment properties and we're very happy with the way things have gone for us. All purchases have been based on the equity in our properties continuing to increase, with the income side of things primarily serviced by the rental return. Our newest acquisition is +vly geared, the others aren't, but close to it.
Different story again…
My wife and I had our PPOR for about 2.5 years before we purchased IP #1 in October last year.
Before we did though, we set up a Family Trust to hold it (and future properties) under and used my existing company as Trustee.
Purchased in country Vic for approx $73000 with 20% down and it's CF+ as we speak.
It's small time investing with a view to growing the size of investments with each purchase.
Am looking to purchase another by the end of this year but my 2 rules are 20% deposit and CF+.As mentioned before, time is not the important thing… For me, it's more important to have a strategy and stick to it.
Hi, Forest
Here is my story.
Bought our PPOR in Nov 2007 with 20% deposit. That property appreciated by 10% since then and in Dec 2008, we refinanced by taking out a Supp loan on the higher valuation for an IP.
We just purchased an IP yesterday with the Vendor having signed this morning. So far, our plan is to buy well (at council valuation), have the bank value at the property at much higher than the purchase price (very possible as a unit in the same lot was sold at 8.5% higher than our purchase price).
Then borrow 90% of the higher valuation and combined with our Supp loan to pay for the IP and fund the renovation without touching our personal money if possble.
It is a case of when one is ready, and the amount of time needed is very different from one individual to the next.
Regards
Daniel LeeThanks for your stories guys, I know that time isn't the essence, it's just ensuring that all your ducks are all lined up before jumping in.
So you have all had banks complete valuations on your properties? Has anyone had a bank come back with overpriced properties? I'm concerned as when I speak to the sales agents in regards to my property they believe it's worth $x amount and when I have been to a valuation of a similar property (but ours has more extras) that valuation was atleast another $25k above what we paid for this one.
I haven't gotten my own valuation as we've only just bought this house and I don't want to rush into it too fast. I'd rather sit back and enjoy owning a home for a while before goign through the crap of buying another one haha.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
