Possible to constantly accumulate properties?

[tess85]

ok then, hubbies toys. They can be even more expensive

True that! hubby wants to buy an evo, some fancy car which costs about $75k I think. That's enough for a deposit on an IP!! I told him that he could have his evo when we have 4 IPs. Still, I think I'm going to die a bit inside, blowing a whole IP deposit on a depreciating asset instead of an appreciating asset. But we've already made plenty of sacrifices to get to where we are today, so I guess it's just delayed gratification really.

because there is this little thing called DSR that Banks like to include in their assessments of you and your ability to repay their loans to you.

Thanks BV. Haven't seen DSR mentioned since first reading about it in Jan Somers book. I assume it's the DSR that's hampering AfricanDaisy from borrowing more from the bank? AD, What does your broker say re: borrowing more - where is the stumbling block for you?

Sash - that was very inspirational - thanks heaps for listing your timeline of purchases. Did you run into roadblocks towards recent years especially with the credit crunch? (doesn't really seem to have happened, if anything you've ramped up the number of your purchases...)

Bigtone, thanks for thoughts re: 90-95% LVR, as I'm fairly conservative we have only been doing 80% so far, something I may well come to regret later. Oh well...... will try to get the next couple of purchases in at 90%.

Graemsay, those were really interesting articles, hadn't heard of that couple before. The article was a great read, the interest payments on 900 properties really blew me away, I think 900 is too much for my sleep at night factor! I'm just trying to see if I can do 1 per year for the next little while, and how long this period will last for.

 

[want2bewealthy]

It depends.

It was possible for me, and I've purchased more properties than consecutive years to date for day dot. Without a PPOR or much cash at all, at the time.

 

[stumunro]

you can continue to buy a property to hold every year,

as long as you purchase trading properties to make short term games through add value / discount buying and pump the profits from those back into your holding portfolio.

 

[Dazz]

Interestingly article on the Wilsons.....and more interesting still the comments from the people that don't have what the Wilsons have.
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How do you stop future Wilsons?

Create a special category of capital gains for Land Registry assets --flats and houses --and supertax it at say 50%.

Instead of 50% council tax on empty properties make it 200% so landlords are motivated to rent.

Give tenants more rights, particularly if property ownership changes.

700 homes for rent? I guess some people will never have enough money. Somehow I can't feel at all sorry for them, even if they lose everything.

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It's good to see the tall poppy syndrome is not just in Oz.

 

[Jonril]

True that! hubby wants to buy an evo, some fancy car which costs about $75k I think. That's enough for a deposit on an IP!! I told him that he could have his evo when we have 4 IPs. Still, I think I'm going to die a bit inside, blowing a whole IP deposit on a depreciating asset instead of an appreciating asset. But we've already made plenty of sacrifices to get to where we are today, so I guess it's just delayed gratification really.

I am re-reading "The Millionaire next door" - by T Stanely and W Danko a real good book to read (although quite dated now) to get a picture on how first generation wealthy people become wealthy.

In the book they describe two types of people PAW's (prodigious Accumulators of Wealth) and UAW's (under-accumulator of wealth)

By your description it sounds like you may be a PAW and your hubby a UAW, as you can imagine this can be a hindrance to your property empire plans.

PAW + PAW = good chance of high net worth.
PAW + UAW = a ball and chain on your journey to high net worth
UAW + UAW = short term gain/fun for long term pain.

If you haven't already I suggest you pick a copy and have a read, it could be enlightening.

And all the best on your journey

 

[Ausprop]

for petes sake, just take the final step and forcibly sign the property over to the tenant. it would be all but theirs anyway

 

[Aaron Sice]

in the tighetening rental market, just make them sign "annexure a" and make "annexure a" one of Dazz's comm contracts....

 

[BayView]

Can't agree with that Bayview the lower the LVR the easier it is get finance, at 60% LVR and no payg income you could still get millions and millions of dollars easily,

I agree that having the lower LVR allows you to at least dance with the Banks.

However, when we applied for finance for our workshop, we had an LVR of less than 50% across our assets. Our nett worth from investment assets was over the $1 mill mark at that point.

We had more than enough equity to borrow the entire amount to pay the $380k purchase price. Had we been applying for another IP - especially a neg cashflow one, we would have been shown the door, or at best been approved for far less.

 

[natmarie73]

Of course you can buy a property every year - it all depends on what sort of property you want to buy. If you want $400k + flash beachfront properties it will be a tad more difficult than if you're targeting sub $100k regional doer-uppers.

 

[jaycee]

I agree that having the lower LVR allows you to at least dance with the Banks.

However, when we applied for finance for our workshop, we had an LVR of less than 50% across our assets. Our nett worth from investment assets was over the $1 mill mark at that point.

We had more than enough equity to borrow the entire amount to pay the $380k purchase price. Had we been applying for another IP - especially a neg cashflow one, we would have been shown the door, or at best been approved for far less.

So you still would have been actually to have bought an IP then in your said situation. A Broker would help you sor tthat out by the sounds of it and you;d be away, I don't see the problem at all.

 

[Graemsay]

The Wilsons

Dazz, there's a view in the UK that property investors have helped price out first home buyers.

The argument goes like this: PIs and FHBs in the UK tend to target the same kind of properties, typically fairly central one and two bedroom flats, but investors are richer and can outbid first time buyers. Hence a large part of the population was priced out, and (unsurprisingly) there's some resentment.

The Wilsons are probably the highest profile PIs in the UK, and therefore suffer from the brunt of this animosity.

There is also speculation that they're not doing quite as well as they claim. Which probably comes under the heading of "tall poppy syndrome".

 

[VYBerlinaV8]

I think it's definitely possible to buy property every year. We have done so for 5 years now. It's important to remember that property costs can build up, and you also need to give some thought to how the portfolio will be 'tuned' to give you what you want going forward.

In my opinion, it's not necessarily about how many IPs you can acquire, but rather how well you can formulate and exectue a plan to get to your investing goals.

 

[Smile]

Tess,

Have a go get your first ip and you will know when you can get your second and third.
It is possible if you value add to each property you purchase in a non rising market.

Stop dreaming get out there and try it. Set up your finance investment structure with your first purchase and with your future goals in mind.

.

 

[tess85]

Thanks all to contributing to what has been a very interesting thread!

Tess,
Have a go get your first ip and you will know when you can get your second and third.

Thanks Smile. I actually do have a PPOR already and 2 IPs already.... My position is similar to the assumptions made in my 1st post, about whether I could continue buying $300k worth of property indefinitely for the next few years! I'm not sure about indefinitely, but I'm very certain of being able to buy for the next few years at least.

I'd like to continue accumulating until I'm 30 (so much for accumulating "indefinitely", but I don't want to be on a maxed out LVR forever.... at some stage I'd need to reduce my debt), so will keep reviewing the situation.