my firt ip

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From: Goran Arsovski


Hi guys, great forum.

I just purchased my first IP which was my parents principle place of residence. They will be moving to a new built home and we will be moving in with them. I purchased their home with no deposit for 151k (inc. mortgage insurance over 25years ) as an investment loan I & P b/c that's the amount that the bank would lend me. The rent in the area is around $190/week and the house was valued by the bank at 180k.

My question is, was this a good choice for me to do and how long into the loan should I be asking the bank for another loan for another IP.

Thanks heaps,
Gozza.
 
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Reply: 1
From: Glenn Mott


Goran,

Firstly, congratulations for having the guts to buy your first place.

To give you meaningful feedback, you would need to give some of the following information:


Type of property
Number of bedrooms
State
Name of the suburb
The rent you actually get when a tenant has signed a lease rather than "around $190/week"
General state of repair

Before I bought my first property, I went to see a family friend who had retired at the age of 40 and lived off rental income from residential and commercial property. His advice to me was to "just do it", to go and get my feet wet and learn from the experience. He also said that in 10 years time from the date I purchased my first, I would look back and wished that I had borrowed double the amount....he was right!

I have already seen a number of people post messages to this forum saying that "the journey is half the fun". Again, this is something so true. To have a hobby/interest that makes you wealthy has to be a bonus.

As to the question, "when do I know when to borrow more", I would say wait until you have some equity/savings. Establish a pattern of saving and you will find that opportunities present themselves. I evaluate each purchase with the "opportunity cost" doctrine, that is, if I spend a dollar on one thing, what does it prevent me from investing in?

Glenn
 
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