Hi Dan,
Not sure what you mean by this? Do you already have 1Million and want a million more?
Sounds good. Will you work along the way, or are you planning to be self funded by then? Could you travel to different countries during the ten year period while you are building your portfolio?
Yes, this is good for residential property. Regarding the threads you have read and enjoyed - keep in mind that many of the investors bought before and during huge booms (myself included). The question I'd be asking now is residential property going to keep going up in the short term? If not, how will I make money out of it by investing in it now? (ie add a twist - development, renovation, etc, etc)
You have bought a lot in a relatively short space of time.
LVR sounds high - but it depends on the strength of your servicability and the type of income you are earning. You may earn $200,000 p/a or perhaps more. So 1M debt wouldn't be so difficult to service.
Bringing down your LVR via paying down your loans (or putting money into offsets) could be a good strategy. The answers about whether to use LMI really involve your reason for wanting to buy again so quickly. Perhaps you are on a high wage for only a short amount of time and want to take advantage of your servicability while you can?
Putting money into offset accounts could be a good strategy. I would probably recommend this as opposed to putting money in savings accounts.
Without knowing your full circumstances, this is difficult to answer. You both need to be comfortable with your investment decisions though - sounds as though your wife isn't and there may be good reasons for this. (eg you want to start a family, work is unstable, income may be cut, ill health, wanting to travel etc etc)
In theory I have a lot of strategies. Whether I'd actually put them into practice or not is another thing!! I read an article recently which explained that women make better investors than men because they are not so gung ho and are more in tune with the risks involved in certain strategies. Buying endless amounts of residential IP's is not without risks. It is great in a rising market but you must have buffers in place to cope with vacancies, repairs etc etc. A 92% LVR would make me feel very uncomfortable....
Sounds good. Is your salary and business stable? Perhaps your wife is preparing for difficult times - or just being sensible and realistic in case your circumstances changed.
With all due respect, your spreadsheets are just that - projections. I can understand your wife being concerned.
For myself, I look at my existing cashflow, the cashflow of the proposed investment whilst keeping my short term goals in mind. (Eg wanting to take leave and travel, family circumstances etc). If the purchase of a new asset will be detrimental to my short term goals (travel etc) then I will not purchase it.
Other things I look at is the strength of my buffer and where this asset will sit alongside existing assets.
Regards Jason.
I want to be a million dollars in front in ten years or less through purchasing decent residential IP's.
Not sure what you mean by this? Do you already have 1Million and want a million more?
My goal is to travel to different countries every year and live comfortably.
Sounds good. Will you work along the way, or are you planning to be self funded by then? Could you travel to different countries during the ten year period while you are building your portfolio?
This is my first post, I have read heaps of these forums and really love it.
I am attracted to property near good schools, shops, transport all of that sort of thing.
Yes, this is good for residential property. Regarding the threads you have read and enjoyed - keep in mind that many of the investors bought before and during huge booms (myself included). The question I'd be asking now is residential property going to keep going up in the short term? If not, how will I make money out of it by investing in it now? (ie add a twist - development, renovation, etc, etc)
We purchased a 3 bedroom unit in Chipping Norton in 2007 and the following year we bought a 2 bedroom unit in the same street. (both of these units performed well in the short time we have owned them so I am not expecting too much in the way of growth for a little while). The next year we bought a block of land at Springfarm and the next year we built on this land and made it our PPOR.
You have bought a lot in a relatively short space of time.
Currently we are mortgaged fairly highly as we have been using equity and savings to make these purchases. We are sitting at about 92% at the moment our debt is almost $1 million (bear in mind it is all good debt except for credit cards)
LVR sounds high - but it depends on the strength of your servicability and the type of income you are earning. You may earn $200,000 p/a or perhaps more. So 1M debt wouldn't be so difficult to service.
I am keen to get to about 80% leverage and purchase again. However if I can purchase a property beforehand I would do it. I would prefer to take out LMI and claim a property (so long as I can afford the loan repayments after receiving the rent)
Bringing down your LVR via paying down your loans (or putting money into offsets) could be a good strategy. The answers about whether to use LMI really involve your reason for wanting to buy again so quickly. Perhaps you are on a high wage for only a short amount of time and want to take advantage of your servicability while you can?
My wife is not that keen, she wants to relax a bit with the buying of property and save money in the bank.
Putting money into offset accounts could be a good strategy. I would probably recommend this as opposed to putting money in savings accounts.
Where I am totally driven to obtaining more and more IP’s. Is it good that she is putting the brakes on? I have told her we could always withdraw from the loan if we are in front for emergencies.
Without knowing your full circumstances, this is difficult to answer. You both need to be comfortable with your investment decisions though - sounds as though your wife isn't and there may be good reasons for this. (eg you want to start a family, work is unstable, income may be cut, ill health, wanting to travel etc etc)
Does anyone have some strategies that could convince her to invest more, or maybe I need to calm down a notch? Bear in mind the woman is the boss at my household.
In theory I have a lot of strategies. Whether I'd actually put them into practice or not is another thing!! I read an article recently which explained that women make better investors than men because they are not so gung ho and are more in tune with the risks involved in certain strategies. Buying endless amounts of residential IP's is not without risks. It is great in a rising market but you must have buffers in place to cope with vacancies, repairs etc etc. A 92% LVR would make me feel very uncomfortable....
We still live relatively comfortable because my salary is quite high and we run a small internet business as a sideline which is great for cashflow.
Sounds good. Is your salary and business stable? Perhaps your wife is preparing for difficult times - or just being sensible and realistic in case your circumstances changed.
I have made up a spreadsheet for each of my properties with expenses, income etc and projections of capital growth and cash flow at moderate yearly rates of 5%. I have made pretty graphs showing our fortune in the future waiting for us with these properties and how this would compound with more properties but she is not convinced of my handiwork.
With all due respect, your spreadsheets are just that - projections. I can understand your wife being concerned.
Does someone have a good system they use to see when they can invest in their next property safely?)
For myself, I look at my existing cashflow, the cashflow of the proposed investment whilst keeping my short term goals in mind. (Eg wanting to take leave and travel, family circumstances etc). If the purchase of a new asset will be detrimental to my short term goals (travel etc) then I will not purchase it.
Other things I look at is the strength of my buffer and where this asset will sit alongside existing assets.
Regards Jason.