30 properties before 25, finance???

Wow, I didn't expect a response that quickly, I like this site already, thanks Wade! I am very interested in what you said about using the equity in one ip to buy another. Based on the research I did before buying my property in Orange I am confident that I bought it lower than market value. How could I continue to use the equity in my property/s to buy more properties? Will I reach a point where the banks will no longer finance me based on my income? This is what I am really trying to understand. I have read about people on incomes of 60k or less who own 10-15 properties. What have they done that allows them to continue getting their loans approved? Thanks again!!

Thank you all for the great advice!!

Jamie and Terry, I had a look into what Nathan Birch has done, its amazing! So what he does is basically buy properties below market value, properties that are positively geared (or neutral), renovate which creates equity and then use that equity as the deposit for his next ip. Is my interpretation of his strategy correct?

So if I was to buy a property for $150,000, renovate increasing the value to $180,000, can I then use that equity as the deposit for the next ip? For example, will the banks allow that equity to be used as the 10% deposit for the next ip? I really don't understand how this all works. Some insight would be very helpful.

I believe I bought my own ip below market value and it currently covers itself in terms of repayments. I am planning on minor renovations shortly so this should also add equity. What is the next step in using this equity as a deposit? Do I need to have the property revalued to determine the equity?

I do know these questions are very basic but I really have no idea at this stage.

I look forward to some more great advice!

Thanks all!

Can anyone tell me how the banks work out an individual's borrowing capacity for positively geared investment properties? For example, if I have an ip that currently rents for 200 per week, with repayments of 190per week, and I want to buy another identical property. How much of the $200 per week I receive in rent will the banks add to my income? I hope this question makes sense…

Cheers!

Thanks Terry.

I am looking at a property at the moment, currently renting for 210pw. As a rough guide, does this mean the banks will add $168 to my regular income when assessing me for another loan?

Thanks,

Oz.

Thank you everyone for the great advice!

Richard, your information was very helpful, that really clears a few things up for me!

One more thing I am trying to get my head around is exactly how using equity in one ip as the deposit for another ip works. For example, if I was looking to buy a $200,000 ip, currently have $20, 000 equity in my first ip, and the banks required 10%. What exactly happens from here? Do the banks treat that equity like cash by increasing my original loan, meaning it works the same way as a normal cash deposit, or is there some other method?

Cheers,

Oz.