Hello everyone
I am planning to buy my first investment property before the end of the year and am hoping to continue buying at least 1 property per year over the next 10 years. I want my portfolio to be cash flow neutral or positive at all times (assuming no unforeseen problems arise). Obviously I will need a good strategy and will need to buy the right mix of properties to ensure capital growth and ensure I don’t lock myself out due to serviceability issues after buying 1 or 2 properties.
I will consider buying anywhere in Australia so long as there is the prospect of reasonable capital growth, but would obviously prefer the larger cities (no small mining towns or small regional areas). My ultimate aim is to build a cash flow neutral/positive portfolio with properties likely to experience solid capital growth over the next 10 years
I am currently earning about 100k and am in a position to be able to begin buying now. I am 28 years old and my goal is to have 10 properties before I turn 40, so 10 in 10 years will work well for me :)
I can see there are many experienced and successful investors on this forum so I’d love to know the following (for the purposes of this assume my salary remains at 100k (equivalent) per year):
1) If you were in my position right now, what strategy would you adopt to achieve the goal of acquiring 10 properties in 10 years?
2) Would you recommend spreading the portfolio across the country or concentrating in a few areas?
3) Would you focus on acquiring units or houses?
4) If you were in my position right now, approval for $380k and wanted to begin before the end of 2016 what would you buy and where would you buy?Hope to get some interesting responses!
Thanks
Rob H
Hi Rob, Love the enthusiasm to build a property portfolio but perhaps you should look at getting the first one and learning from the experience. So my answers would be
1. Buy 1 investment property and reassess in 6-month reviews
2. Diversity is good
3. Look for land content but again assess each property on its own merit not just by asset class
4. At $380k you can buy some stuff but again depends on your risk rating and fear factorI am sure others will give you their opinions so tread carefully and keep your eye on the dream!
Thanks for the response!
Which Australian city would be the best place for me to start this year?
It is not the city you should be looking at although Sydney is overpriced I believe. As this will be an investment property and not a home to live in it would be best to look at numbers for each property and see which is the best investment. Try to keep an open mind as to the location and if the location is out your comfort zone just check out the reasoning of why that location etc. Remember to buy new and get the best returns and save on stamp duty and maintenance costs.
Hello everyone
I am planning to buy my first investment property before the end of the year and am hoping to continue buying at least 1 property per year over the next 10 years. I want my portfolio to be cash flow neutral or positive at all times (assuming no unforeseen problems arise). Obviously I will need a good strategy and will need to buy the right mix of properties to ensure capital growth and ensure I don’t lock myself out due to serviceability issues after buying 1 or 2 properties.
I will consider buying anywhere in Australia so long as there is the prospect of reasonable capital growth, but would obviously prefer the larger cities (no small mining towns or small regional areas). My ultimate aim is to build a cash flow neutral/positive portfolio with properties likely to experience solid capital growth over the next 10 years
I am currently earning about 100k and am in a position to be able to begin buying now. I am 28 years old and my goal is to have 10 properties before I turn 40, so 10 in 10 years will work well for me :)
I can see there are many experienced and successful investors on this forum so I’d love to know the following (for the purposes of this assume my salary remains at 100k (equivalent) per year):
1) If you were in my position right now, what strategy would you adopt to achieve the goal of acquiring 10 properties in 10 years?2) Would you recommend spreading the portfolio across the country or concentrating in a few areas?3) Would you focus on acquiring units or houses?4) If you were in my position right now, approval for $380k and wanted to begin before the end of 2016 what would you buy and where would you buy?
Hope to get some interesting responses!
Thanks
Rob HHi Rob,
First of all, good on ya for thinking long term and seeing the value in property investing. Wish I was focused on it when I was your age 😀
You might find it interesting to know that even if your property is positively geared, the lenders may still see it as negatively geared! Why? Because they stress test the borrower. Rent is usually calculated at 80% (if not less…) of what it is and loan repayments as p&i + buffer. So you could meet the borrowing power wall sooner than you think unfortunately.
My favourite strategy is to quickly add value to my investments, get as much as I can of my money back so I can take it and invest in the next property.
I also prefer houses over units as this way I have more control and am not dependent on body corps.
Where to invest? Close to home is definitely easier but if I see great options further away, I’m open for that. But need to always learn the area, not just the specific property in question.
Hope this helps?
Best regards,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Hi RobH,
Welcome to pi.com – and good for you in having an expressed goal to start with. As you can imagine, there is lots to be done, but finance is one of the first to get going, and the help of one of our Mortgage Brokers would be a smart move. THere is SO much to know, and they know it backwards.
Re WHAT to buy, well that is a whole nother question. Fintrack says “Buy new”, where I would tend to suggest there may be better ways. Ethan’s comments are nearer to my own thoughts – viz. buy second-hand and add value.
Note that nothing is “hard and fast” – you may not be in a position to handle a “long-distance reno” for example, so buying an older house that needs work, in a city far away might not be the smartest move !! ;)
But look what CAN be (and has been) done by a young bloke, simply by buying low, doing a reno, creating even more positive cashflow, and using the newly created Equity to buy again :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697977Ten years? If it can work for you like it did for Darryl, you may be retired way sooner than you think !!
Benny
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