Treading carefully

With a nice clean debt free slate to work from, all I can suggest is you just start building assets.

Its all a matter of timing though, and for now I think you are marginally safer on the lower rung of properties than the upper range. I've been of the mind that we are overdue for a rate raising climate .. and in that scenario the more pricey properties start to plummet. Dont be fooled .. the WHOLE market reassesses itself, but usually the lower end doesnt get slammed so badly.

The rules are simple .. get as much quality property as you can for your buck, get a comfort level of debt you feel you can deal with, and get property that remains close to facilities and transport. And yet people keep writing megabooks on the same three rules .. over and over again.

There are properties returning up to 6-8% now in lesser desirable areas, so if you include your 40k as initial 20% deposit, you should be able to get a near neutral or positive scenario to start with. As 8% of 200k is about 16k return, on your initial investment you are getting a 40% return gross pre expenses. Go to the bank and ask for that and watch them laugh.

The other side of this scenario (assuming you are purchasing 100k properties) is that the ease of repayment on a smaller loan size means you can repay the loans quicker. And banks will allow you to include the assets and income from your properties as part of the equation for your next deal. On the premise i just cooked up in the previous paragraph .. you should be able to borrow 100k more within 4 or 5 months of that initial deal. Also with 1 or more small properties .. you can borrow or loan on one or the other without encumbering both.

Slow and steady is the current words I'd use. You must take on board that on the property clock .. the boom climate is off and we are looking towards the downturn in most Australian markets. Whatever market you choose and want to be in .. take your 5 year trend line to see where you expect the market to be in that area … in 5 years. There are no crystal balls in real estate, but trends tend to present themselves in advance.

Outside of that .. you've got the advantage of a top notch forum with many other property investors who are making judgement calls based on solid information. Take a trip through the forum and you may just glean some knowledge from it.

Best of Luck

If you are going to quote figures at least do it right.

In your example you would have to put in $41,000. ($130K-$95K + stamp duty + solicitors fees). So you are forgoing interest (if left in a term deposit) of $190pm.

Your incoming is $910pm minus (PM fees $70 + rates $100 + insurance $40) = $700pm (assuming you have no maintenance, problems etc).

So  $700 – $555 = $145pm.  So with the interest you are forgoing by spending your $41K you are about even. And that's if your loan is interest only. That won't pay it off.
This would still be a goer assuming there is capital gains to be had. The problem with some regional properties is that CG is low. so you are no further ahead 15 years down the track.

While yield is very important, without CG you are not moving ahead.

Sorry to duplicate- didn't read the rest of the posts.