First property tactics



From: Don Slade

I am looking to buy my first IP. I have looked at all manner of tactics:
Buy and hold
Buy renovate and hold
Buy reno and sell
Buy off the plan
Lease Options
Options trading
Site development
I want to keep it simple, at least for the first time. With that in mind I am tending towards the Buy and Hold strategy. I also want my first property to be a sling-shot into my second. Waiting for it to appreciate before I can do deal no.2 doesn't appeal.

Does anyone have any smart tips on how I can get into property no.1 using only a minimum of cash (approx 25k)and misc borrowings (20k)such that I can get property no.2 with just spare change (because thats all I'll have after the 25+20k is gobbled up in fees, tax and deposit)- this year in the Melbourne market.

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Reply: 1
From: Michael Croft

Hi Don,

Are you an impatient gen Xer or a baby boomer running out of time? It's the sling-shot line that got me.

All I can say is the 'buy to hold, renovate, refinance and repeat', has worked for me. If, as you say, you are tending to the buy and hold, doing a good reno is one of the few ways to accelerate the process. If you do it right, you can do it repeatedly - no need to stop at two.

Do a search of the archives on Geoff Doige and others on renos and see how you go.

Michael Croft
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Reply: 1.1
From: Gail H

Don't forget the issue of debt servicability. You may think you can service the debt on 2 IPs in Melbourne, but the bank may not agree. Given the shortfall between rent and mortgage payments in the Melbourne market at the moment, you really need to check this out with potential lenders.

Many people emphasise the need to buy in your own backyard, but I decided mine (Melbourne) was just too expensive and would wreck my Debt Servicing Capacity. I've bought up North. Don't be afraid to look outside the backyard.

Good luck
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Reply: 1.1.1
From: GoAnna !

Hi Don

If you were to use "buy, renovate and refinance" as Michael Croft suggested (and who would know more on this topic?)then your rents should also increase along with your improved valuation. This would improve your serviceability position.

GoAnna !
"Obstacles are those frightful things you see when you take your eyes off your goal."
-Henry Ford
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Reply: 1.1.2
From: Simon St John


I was interested to go back over the posts of the last week and catch up and see your comments about being a Melbournite who 'went up north'.

I am of the same opinion in relation to mortgage/rent payment gap and in fact are looking to relocate to the Sunshine Coast in the next 12-18 months.

I really just wanted to strike up an acquaintance and bounce a few ideas off someone in a similar frame of mind!

If interested, please feel free to fire off an email to

Cheers, Simon
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