Property Investing and helping a humble student.

Firstly. If your broker has less properties then you. Or rents, stop listening to your broker.
IMO a broker who doesn’t invest themselves. Is a sales rep.

Cash and equity wise you have enough to buy several properties. The question is what type of properties do you wish to buy. Ie would you buy a new unit. Yes Low maintenance etc but once you have bought 2 newish units. You have to wait for lady lucky market growth or save more money to be able to buy more.

Perhaps look Into purchasing. Fixing up: renovating, subdividing land and building. To create additional equity so that you can reuse the same capital again and again and again.
Aim for lower- medium value properties where the yields/ rents are usually higher in proportion to the value of the property.

• This reply was modified 10 years, 4 months ago by  wilko1.

I found when I was starting out reading the forums was my greatest source of knowledge then putting learnings into practice and learning some more from them. I went to a few of the free seminars but I found them to be biased and pushed their own product or agenda to benefit them and not me.

You’ve got an end goal which is good, but how are you going to get there? Do you want to buy and hold? Do you want to reno? Are you time poor or rich? Do you want to develop? Flip?

Are those 10 properties going to be $150k regional cheapies giving you CF or are they going to be $700k houses in capital city blue chip suburbs giving you lots of CG or a balance of both or all of the above?

Hopefully some food for thought.

Best of Luck for carear.This is the right business you have choose.But buy property very carefully.

A bit of a late reply, and after your long post replying to everyone it seems like someone should get back to you!

It sounds like you’re looking at sourcing the IP yourself, which is common, however I would at least consider using a buyers agent. It’s a big purchase, and it’s amazing how many people just do a bit of research, haggle with a RE agent and lay down $300k+ on a IP.

You’ll see a trend through the posts where people are new to the forums (myself included when I started on here last year), but it’s really about figuring out where you want to be in the future and then determining how you get there. The first IP could potentially make / break your investment future, so you want to get it right. I can’t remember the numbers but the vast majority of investors stop at one IP! Do you want growth, or cash flow, or a bit of both (sounds like this option)? Figure that out, and you’ll be on your way to knowing where to look.

In regards to the PPOR and LOC question. The LOC is secured against only your PPOR, while the new investment loan is only secured against the new IP. So, if you sell your PPOR you have to pay out / refinance the LOC. Hope that makes sense.

A bit of a late reply from me too sorry – still figuring out how to use this forum ie find out when a thread has been updated. One cool thing I did discover the other day is you can tag users in your posts and, at least for me, when that happened I got an email telling me someone had mentioned me. Anyway, slightly OT….

I won’t comment on your broker mate – if you trust him with you $$$ then that is one of the main things. Just educate yourself so if something is not being done or could be done better you’re aware. But then again – you don’t know what you don’t know! Two of my biggest tips are avoid x-coll and if you’re looking at building a sizable portfolio use the lenders that have the stingiest serviceability first then when you start hitting the serviceability walls go to the ones who have a more generous serviceability model.

With investing in Sydney – I think the horse has bolted with that one. How much steam has the market got left in it? I don’t know, but I think there’s other markets with more go in it now.

How does the LOC against PPOR work? is that the same as extracting the equity and using it as cash on a new PI? and if so doesnt that mean you would be putting up your PPOR as cross collateral?

Yes, you’re extracting equity into a stand alone loan with your PPOR as the secuity/collateral but in the sense of the word it wouldn’t be x-coll. You have your PPOR and then secured against it is the mortgage and then the LOC but this is not considered x-coll as there’s only one security. On the other hand, if you had a LOC with PPOR and IP1 secured against it, then this would be x-coll. Are you concerned if something were to go wrong you could lose your PPOR?

Which other property buyers agents would you recommend? Ive heard good things about BInvested. I will def look into the one you have suggested and im keen to attend their meetings esp since they are quite close to me.

I have never dealt with binevested but do a search on the other property investing forum (has SS as the initials…) and there’s some interesting comments and people sharing their experiences on there.

On another note: as iam looking for properties with good rental cash flow and room for capital growth, how should i start researching these areas? which tools do i need? Ive heard about RP data, is that a good starting point or are there other research tools needed? thanks.

I am sure there is a better way, but what I do when I’m looking to start investigate a new area is purchase the property investing magazines (a lot cheaper than a RP Data subscription) and at the back they have all the suburb/town info listed. So I search within my parameters – such as 5% avg CG, median of below $400k, rental vacancy below 2%, rental return of at least 6% and then I find which areas fit those parameters and use that as a starting point. I then look at the demographics, planning websites to see what’s under way and what’s planned (gentrification) as well as the housing stats like days on market, discounting that kind of thing to get an indication of where it’s at in the cycle.