I come across A LOT of new investors that have the dream to own "10 properties in 10 years" ...OR they wan't $100,000 of passive income when they retire.
These are both extremely ambitious goals and out of 500+ clients I've only a handful that have had the tenacity and determination to secure 10+ properties in 5 years or so years.
With that said though, it is definitely possible for anyone who is committed enough to achieve.
Please see the below reply to another thread and contribute your thoughts on strategies that suit the below overview.
If you disagree I'd love to hear your challenges too.
These are both extremely ambitious goals and out of 500+ clients I've only a handful that have had the tenacity and determination to secure 10+ properties in 5 years or so years.
With that said though, it is definitely possible for anyone who is committed enough to achieve.
Please see the below reply to another thread and contribute your thoughts on strategies that suit the below overview.
If you disagree I'd love to hear your challenges too.
Okay so let's look at your long term goal... $100,000 in today's money of passive income from property in XX years.
Considering that (generally speaking) property yields about 5% in most capital cities you're going to need +$2,000,000 of property owned outright or $4,000,000 - $5,000,000 of property with a variety of LVR's against each asset.
So you could simply say you're going to acquire 12 properties at $450,000 over XX years, after which you'll either keep and pay down or sell off assets to reach your desired income. The problem you will face along the way will be inflation and as such you'll actually need to increase your purchase prices as time goes by, but I digress...
To get to that goal $100k within XX you're going to need to focus on rapid acquisition of property. There are a variety of strategies to do this which I'm sure will be talked about further by others.
The basic keys to rapid acquisition are:
1. Compounding Capital Growth (CCG)
2. Add Value (Reno, Paper gaining and Development)
3. Buying below market value
The basic limitations to rapidly acquiring property are:
1. Serviceability (Gearing, Cash flow, Risk)
2. Finance
3. Market forces
So essentially you want to focus on a property that will give you all three key components with a focus on growth (as that's the strongest performing aspect) whilst enabling you to mitigate the restrictions and limitations aforementioned.
The best way to achieve this is to:
1. Buy in an area predicted for strong CG (Elwood and St Kilda are good)
2. Buy something that can have value added to it.
3. Buy an off market property so you can negotiate a below market price.
Then once you've found a short list of properties that suits the above focus on mitigating the restrictions by:
1. Maximising rental income. (Renovation, multiple renters, short stay accom, etc)
2. Maintain a conservative LVR (less than 80%)
3. Purchase in areas with proven histories.
As you grow your portfolio you'll come to understand that managing the overall growth is quite complex and there are a lot of factors and details to be managed. The more tenacious and hands on you are the more success you'll likely achieve.
I think your initial budget should be close to $550,000 rather than $450,000 in Melbourne. Even though you're spending more you're actually being more conservative due to the increase in quality...
As far as data goes, just buy your investment magazines, they have the basics.
Get a good mortgage broker, Jo Attard & Co or Sage Lending are two I'd recommend. They can give you access to special property reports.
Lastly I cannot stress how important it is to have the correct financial structure in place. DO NOT borrow through your bank, use a good broker. Also, once you've started to build your portfolio, enlist the help of a good financial planner and accountant that can help you look after the details.
Good luck