Hi Guys,
I would like to share our 4-year property investment journey; it might give some food for thought for those investors who are planning or starting a family.
May 2006 (DINKY): My wife and I bought a “Large” 2B-2B-2C apartment in Sydney. It was “Huge”, I used the second bedroom as my home office and each of us had their own bathroom. The lenders literarily fought for our loan due to our nice combined income.
February 2007 (DINKY): Serviceability was not a problem so we bought our first IP, a 3B+study-2B-2C house in Melbourne. Loan was very easy to get this time as well.
December 2007 (SI1K): My first child was born. We had only one income for 12 months, my home office was converted to a nursery and some extra expenses (nappies, formula, doctors, health insurance, etc) kicked in. We managed with only one income.
December 2008 (SI1K): The GFC was a blessing for us, interest rates went down, rent went up by $10, had a salary increase and even a bonus. Additionally the wife went back to work. We managed to not expend the extra money and put them all in the offset account.
October 2009 (SI1K): Both properties had gone up and we had a good buffer in the offset account so decided it was good time to buy another IP. We bought a 4B-2B-1C in Sydney.
July 2010 (SI2K): My second child was born. My wife pregnancy was a bit tricky so she had to take bed-rest for 6 months (since 12 weeks’ pregnancy). It meant we lost her income sooner than we had planned. Luckily she had income protection insurance and after a bit of argument with the insurer they paid 75% of her salary until the baby was born (wife and baby are perfect and healthy now).
November 2010 (SI2K): The “Large” apartment had become very small, also with a very active 3-year old boy, living in a 8th floor is not smart thing to do. Balcony and windows have to stay close at all time and with the weather warming up it means air conditioned on during the day. Not good for the environment and not good for my wallet either. Anyways, we decided we had to move to a 3 beder attached to the ground (house, townhouse or ground floor unit).
December 2010 (SI2K): We have just accepted an offer for our apartment; it went up from 315,000 to 449,000 in 4.5 years or around 8% p.a. (not bad for a high rise apartment in Sydney). We will be renting for 6 – 12 months until my wife is back to work so we can afford to buy a “large” PPOR around $650,000. The lenders don’t fight for our loans anymore, when I said SI2K and our current property borrowings they gave me that look that I clearly understand.
Future: We will not be buying another buy-hold property until my eldest starts school in two years time. So I will be studying different wealth strategies such as Property Development, Buy-Do Something-Sell, and Positive Cash Flow Property to see if they fit within my risk criteria.
Apologies for the boring and long post, but if you have read until here, I would like to highlight few things:
Cheers,
Roberto
P.S.
DINKY: Double Income No Kids Yet
SI2K: Single Income Two Kids
I would like to share our 4-year property investment journey; it might give some food for thought for those investors who are planning or starting a family.
May 2006 (DINKY): My wife and I bought a “Large” 2B-2B-2C apartment in Sydney. It was “Huge”, I used the second bedroom as my home office and each of us had their own bathroom. The lenders literarily fought for our loan due to our nice combined income.
February 2007 (DINKY): Serviceability was not a problem so we bought our first IP, a 3B+study-2B-2C house in Melbourne. Loan was very easy to get this time as well.
December 2007 (SI1K): My first child was born. We had only one income for 12 months, my home office was converted to a nursery and some extra expenses (nappies, formula, doctors, health insurance, etc) kicked in. We managed with only one income.
December 2008 (SI1K): The GFC was a blessing for us, interest rates went down, rent went up by $10, had a salary increase and even a bonus. Additionally the wife went back to work. We managed to not expend the extra money and put them all in the offset account.
October 2009 (SI1K): Both properties had gone up and we had a good buffer in the offset account so decided it was good time to buy another IP. We bought a 4B-2B-1C in Sydney.
July 2010 (SI2K): My second child was born. My wife pregnancy was a bit tricky so she had to take bed-rest for 6 months (since 12 weeks’ pregnancy). It meant we lost her income sooner than we had planned. Luckily she had income protection insurance and after a bit of argument with the insurer they paid 75% of her salary until the baby was born (wife and baby are perfect and healthy now).
November 2010 (SI2K): The “Large” apartment had become very small, also with a very active 3-year old boy, living in a 8th floor is not smart thing to do. Balcony and windows have to stay close at all time and with the weather warming up it means air conditioned on during the day. Not good for the environment and not good for my wallet either. Anyways, we decided we had to move to a 3 beder attached to the ground (house, townhouse or ground floor unit).
December 2010 (SI2K): We have just accepted an offer for our apartment; it went up from 315,000 to 449,000 in 4.5 years or around 8% p.a. (not bad for a high rise apartment in Sydney). We will be renting for 6 – 12 months until my wife is back to work so we can afford to buy a “large” PPOR around $650,000. The lenders don’t fight for our loans anymore, when I said SI2K and our current property borrowings they gave me that look that I clearly understand.
Future: We will not be buying another buy-hold property until my eldest starts school in two years time. So I will be studying different wealth strategies such as Property Development, Buy-Do Something-Sell, and Positive Cash Flow Property to see if they fit within my risk criteria.
Apologies for the boring and long post, but if you have read until here, I would like to highlight few things:
- Have proper insurance in place – it saved us from financial disaster when the unexpected arised.
- Do your calculations taking in account you will be in one income or paying childcare for five years, until your child starts school.
- Do something, buy within your means but buy something. We could have never saved the amount the properties have gone up in 4.5 years.
Cheers,
Roberto
P.S.
DINKY: Double Income No Kids Yet
SI2K: Single Income Two Kids
