First IP risk

[PeterH]

Hi all, my partner & I have just bought our 1st IP at Stafford Heights - it's a 40yr old 3 br house - they were asking $339k 3wks ago, but we finally got it for approx $298k. So our journey begins, my main motivation being not working 9-5 for someone else!
One question I would like people to respond to is that the main risk I see for the beginner like me is if I lose my job & so do I a/ panic & sell up or b/ wait a few months to see if I can get another job. I would guess that if u sell within 1yr u would probably loose money depending on the market due the high entry/exit costs.

Thks in advance for your responses

Cheers PeterH

 

[duncan_m]

Originally posted by PeterH
Hi all, my partner & I have just bought our 1st IP at Stafford Heights - it's a 40yr old 3 br house - they were asking $339k 3wks ago, but we finally got it for approx $298k. So our journey begins, my main motivation being not working 9-5 for someone else!
One question I would like people to respond to is that the main risk I see for the beginner like me is if I lose my job & so do I a/ panic & sell up or b/ wait a few months to see if I can get another job. I would guess that if u sell within 1yr u would probably loose money depending on the market due the high entry/exit costs.

Thks in advance for your responses

Cheers PeterH

Hi Peter,

Congrats on the first!

I went thru the same sort of concerns when I bought my first PPOR..

At the end of day.. if you DID lose your job you've obviously got something between your ears and if you really had to I'm sure you could get a job as a Courier or something and survive on Two Minute Noodles until something better came alone..

By hook or by croook, you'd manage in order to hold your IP's until the end of the next boom..

 

[landlubber]

Hi Pedro,
You've done the right thing ..you've started !! Congratulations !
You will always have conerns of one sort or another. (Those who choose to do nothing had better be concerned about retirement on the pension , and that's if it exists.) Keep your head down and your bum up....give the boss good value whoever you work for ....and keep going .

..and it WILL rent ...OK ?

LL

 

[Brenda Irwin]

Hi Peter and congratulations.

Don't forget to get a quantity surveyor in so you can claim all the tax depreciation.

Now is the time to survive on the 2 minute noodles so, while you have a job, you can make all the extra repayments you can and achieve extra equity so you can buy another ip or redraw the loan in an emergency. Assuming of course that the loan was P&I.

If the loan is IO then put the extra money into your own emergency offset account in case your job is not a sure thing in the future.

 

[D.T.]

Hi,

Congrats on the purchase. Im sure everyone feels jitters for the first couple of weeks. Tho, if it really is a problem for you, perhaps you could look into Income Insurance to help out with the SANF?

-Regards

Dave

 

[lissie]

Originally posted by dtraeger2k
Tho, if it really is a problem for you, perhaps you could look into Income Insurance to help out with the SANF?

Alternatively when you get some quotes and discover how expensive the redundancy option is on income insurance - take the amount of the premiums and park them in an offset account.

 

[Les]

G'day PeterH,

I would guess that if u sell within 1yr u would probably loose money depending on the market due the high entry/exit costs

I'd say that sounds about right, Peter. But, if you've managed to buy below the "market value", then you've bought yourself some security right there. But, normally, as you said, the costs of "getting in and getting out" can swallow up huge chunks of cash, so I'll wish you the best for the next year or so, and say that those niggling thoughts will abate over time.

Anyway, congratulations for making it happen.

Regards,

 

[saucy gibbon]

Peter,

I'm investing so I can lose my job

Do a bit of reading regarding other people's experiences. There are some dark days described by some.

But somehow they hang on.

Be tight with your $$s and if you hit a rough patch you may be able to ride it out, or better still, take advantage of another opportunity.

Try and find something that will remind you of why you are in this game in the first place. It helps keep things in perspective.

 

[np2003]

Great to see you put in the risk that many like me are too afraid too. See people like myself just sit around hoping and wishing the market crashes so we pickup cheaper properties, we do this because we are too afraid to take RISK, all the while your IPs gain CG, and before you know it your cashflow positive while people like myself sit on the bench asking why we didn't buy a property years ago. I always notice that calculated RISK is what makes one move forward, improve, be stronger and be better. All the kudos to you. I just hope I have some balls one day to follow in your steps in the meantime I will just keep reading more of Jan's "Building Wealth - Story by Story" to get more encouragement.