The Newbie that gatecrashed... gatecrashes again!

Hi everyone,

A lot has happened since my first post last year and I wanted to share it with you. I was also hoping to hear your thoughts and opinions on my next steps, as I found your previous advice incredibly helpful (and surprising - who would've thought I'd drop the idea of buying a PPOR first up and instead start investing). It really paved the way for my investment journey.

Recap:
IP #1 2014: 1.5 year old Townhouse in Melbourne's North (Broadmeadows), 5 mins walk to station, small block of townhouses and very low strata.
Purchase price: $292, 000, IO
Loan $284, 000
5.85% rental yield

Pros:
Was able to secure tenants within 4 days
Close to neutral cash flow (so far + $30, lol, after agent fees, etc.)
Have been able to save another $30, 000
May soon be able to increase rent by $10 - $20 a week
Learning experience

Cons:
Concerns about short-term capital gains

Moving forward, one of my biggest priorities/lessons is focusing more on capital growth than I have with my last purchase while still hopefully remaining fairly close to cash flow neutral. I need to be able to access short-term equity for subsequent purchases (if only it were so easy?!). I've been a fan of Rixter's approach from SS and have noted most of his purchases are < 350k and across Australia, which is probably more in line with my risk profile.

My goal
My goal is to purchase 10 properties (preferably newer townhouses, villas and established units with low body corp) X <350k in metro AU (prefer Melbourne and Sydney within 20km) areas requiring minor renovations with a view to achieving 100k (today's money) in rental income over the next 10-20 years and being able to purchase a blue chip PPOR in inner city Melbourne.

Current position
Earn $84, 000 p/a
Save $2000-2500 per month
Total rental income p/a from IP #1 $17, 160 (before agents fees, etc)
Currently renting in Sydney, very cheap rent
No PPOR
Partner will start investing in a few years

Next steps
Given I have been able to save $30, 000 and likely $40, 000 in a few months, do you think that I should begin searching for IP # 2?

Based on my research on this forum and other sources, I'm particularly interested in: Coorparoo, Cleveland, Clontarf (QLD), Boronia, Albion, Sunshine, Hoppers Crossing (VIC) and Mount Druitt (NSW).

These all meet my criteria for cost <350k, yield and capital gains. Had considered Lilydale and Dandenong, as the latter is noted as an activity hub in Melbourne 2030 but 35km seems too far from CBD.

OR

Should I hold off, save a bigger deposit, furiously :)mad:) read more Lomas and invest more into my strategy?

I've sent my mortgage broker an email about finance (thanks Rolf!), so this will also influence my future direction.

Thank you for taking the time to read my post, much appreciated!

Android
 
Hi OP,

1. Purely wondering, why 'partner invest in a few yrs' - why not now? ;)

2. Boronia? Mind if I ask how you've included this as 1 of the suburbs?
 
Hi OP,

1. Purely wondering, why 'partner invest in a few yrs' - why not now? ;)

2. Boronia? Mind if I ask how you've included this as 1 of the suburbs?

My partner is studying full-time (2 years remaining... :() but is eager to start investing. ;)

Boronia... because of relative affordability, closer to neutral cash flow (depending on the buy) than surrounding suburbs, has its own train station, proximity to Westfield Knox and of course blue chip suburbs like Glen Waverly.
 
For the Melbourne suburbs in your list, Android, I think Albion and Sunshine are pretty good. Proximity to the city, train stations, good state schools whose students perform well in the VCE, demographic change - older people selling off and moving to retirement homes, families moving in to take advantage of the schools and amenities. I think there is also good demand for rental because of all the above factors.

I've stayed in Cleveland - lovely, quiet suburb, seaside retirement feel.
Clontarf - part of the Redcliffe peninsula. Been there too. There is a large open concrete drain running through Clontarf and several places are at sea level as Angel has mentioned in the past.
But I don't see as much the demographic imperatives for families to move there when I compare to Albion and Sunshine. Just my 2 cts.
 
My partner is studying full-time (2 years remaining... :() but is eager to start investing. ;)

Boronia... because of relative affordability, closer to neutral cash flow (depending on the buy) than surrounding suburbs, has its own train station, proximity to Westfield Knox and of course blue chip suburbs like Glen Waverly.

Studying... property investment FT? :D

Boronia... try swapping 'ro' with 'ga'.
Yes it's got a train station and close to Knox. But it really ain't anywhere near Glenny... and is nothing like Glenny! :cool:

For the same amount of money though, I'd probably think Sunshine is a better bet. Lots happening in the West!
 
Android, I think Albion and Sunshine are pretty good. Proximity to the city, train stations, good state schools whose students perform well in the VCE, demographic change - older people selling off and moving to retirement homes, families moving in to take advantage of the schools and amenities. I think there is also good demand for rental because of all the above factors.

Thanks Beanie Girl, this gives me more to think about. They're also a lot closer to the city than some of the other suburbs I've listed, about 10 km out and very well connected to public transport. I suspect that villas and townhouses would be better purchases in these areas, mostly families with children, like broady? I'll need to do some research.

I realise there is a lot of talk about investing in Brisbane right now (especially on SS) but my biggest concern about Brisbane is that it so up and down. When I look at the growth for Redcliffe areas, even Coorparoo, I was surprised and even uncomfortable. Melbourne seems a lot more stable. I'm very interested to see whether the predictions for Brisbane this year are correct, though.

By the way, just out of interest, what do you think of Hoppers Crossing?

Studying... property investment FT?

Haha, no - far from it! Community services. I'd probably be more interested in studying property investment.

For the same amount of money though, I'd probably think Sunshine is a bette bet. Lots happening in the West!

I hear a lot about Sunshine. I haven't ever visited before, so I'll check it out when I next visit. Do you own property in the West?

Thanks for your replies, Beanie Girl and j_aco. I really appreciate it ;)

From here, my next step is to work on increasing my deposit and then do a lot more research over the next 6-12 months. Hopefully, I'll will have a clearer idea of my next step then.

That is, if analysis paralysis doesn't set in :eek:
 
By the way, just out of interest, what do you think of Hoppers Crossing?

Hoppers is a bit too far for my liking for good infill close to the city, 25-28km?
Hoppers tends to be where the McMansions are. Surrounding Hoppers are suburbs like Tarneit and Truginina which still has lots of house and land packages not released. Lots of land out there for the first home buyer house and land package.

Aren't the below townhouses cute? They seem to be in your price range too :)

http://www.realestate.com.au/property-townhouse-vic-glenroy-118042451
The brick work and the European cottage roofs are so cute!

http://www.realestate.com.au/property-unit-vic-glenroy-118725115
This has its own land on 306m too. The number is greeat too
 
If you already have 1 in melb I would maybe consider going interstate for your next purchase. Bris & Adelaide seem to be where most buyers are now looking....
 
melbourne, deff broadmeadows 15-16kms from cbd

you can get 3 bed house on 300-400sqm (old mind you) for around 250k
rent 280-320
i know you prefer near new i prefer old.

QLD, redbank plains, bellbird park (close to springfield central)

about 5-6 years more worth of infrastructure

idk about nsw
 
Hi everyone,

A lot has happened since my first post last year and I wanted to share it with you. I was also hoping to hear your thoughts and opinions on my next steps, as I found your previous advice incredibly helpful (and surprising - who would've thought I'd drop the idea of buying a PPOR first up and instead start investing). It really paved the way for my investment journey.

Recap:
IP #1 2014: 1.5 year old Townhouse in Melbourne's North (Broadmeadows), 5 mins walk to station, small block of townhouses and very low strata.
Purchase price: $292, 000, IO
Loan $284, 000
5.85% rental yield

Pros:
Was able to secure tenants within 4 days
Close to neutral cash flow (so far + $30, lol, after agent fees, etc.)
Have been able to save another $30, 000
May soon be able to increase rent by $10 - $20 a week
Learning experience

Cons:
Concerns about short-term capital gains

Moving forward, one of my biggest priorities/lessons is focusing more on capital growth than I have with my last purchase while still hopefully remaining fairly close to cash flow neutral. I need to be able to access short-term equity for subsequent purchases (if only it were so easy?!). I've been a fan of Rixter's approach from SS and have noted most of his purchases are < 350k and across Australia, which is probably more in line with my risk profile.

My goal
My goal is to purchase 10 properties (preferably newer townhouses, villas and established units with low body corp) X <350k in metro AU (prefer Melbourne and Sydney within 20km) areas requiring minor renovations with a view to achieving 100k (today's money) in rental income over the next 10-20 years and being able to purchase a blue chip PPOR in inner city Melbourne.

Current position
Earn $84, 000 p/a
Save $2000-2500 per month
Total rental income p/a from IP #1 $17, 160 (before agents fees, etc)
Currently renting in Sydney, very cheap rent
No PPOR
Partner will start investing in a few years

Next steps
Given I have been able to save $30, 000 and likely $40, 000 in a few months, do you think that I should begin searching for IP # 2?

Based on my research on this forum and other sources, I'm particularly interested in: Coorparoo, Cleveland, Clontarf (QLD), Boronia, Albion, Sunshine, Hoppers Crossing (VIC) and Mount Druitt (NSW).

These all meet my criteria for cost <350k, yield and capital gains. Had considered Lilydale and Dandenong, as the latter is noted as an activity hub in Melbourne 2030 but 35km seems too far from CBD.

OR

Should I hold off, save a bigger deposit, furiously :)mad:) read more Lomas and invest more into my strategy?

I've sent my mortgage broker an email about finance (thanks Rolf!), so this will also influence my future direction.

Thank you for taking the time to read my post, much appreciated!

Android


i believe you live in Sydney? as your location states

as to finding IPs below $350K in Mount Druitt, i think is alot higher now as there have been significant CG.
 
Aren't the below townhouses cute? They seem to be in your price range too :)

http://www.realestate.com.au/property-townhouse-vic-glenroy-118042451
The brick work and the European cottage roofs are so cute!

http://www.realestate.com.au/property-unit-vic-glenroy-118725115
This has its own land on 306m too. The number is greeat too

Beanie Girl, you must've read my mind... I had only just looked at Glenroy the day before you posted these links and thought that the suburb was well within my price range. You must be an expert on Logan AND Glenroy ;)

Glenroy is definitely on my radar along with Sunshine. :D

Hoppers is off again.

If you already have 1 in melb I would maybe consider going interstate for your next purchase. Bris & Adelaide seem to be where most buyers are now looking....

Thank you for your feedback, R377. Brisbane is still on my list... I do check it out regularly. Once I have my deposit, I'll review all the suburbs that I have been interested in, including some of the QLD suburbs mentioned here. I may even buy one of those RP Data Suburb/Rent review reports to help with the final decision.

I love Adelaide city (Glenelg, Norwood, etc) and would invest in a heart beat if only I were more confident about growth there :confused:. I know you have to be really careful about which submarket you choose to invest in in Adelaide. If it were an emotional decision, it'd be an easy choice but for me investing has to be a business decision. In Adelaide, I'm just not sure if I could get the same potential gains as Sydney and Melbourne. Maybe I'm completely wrong and in 5 years, I'll be kicking myself!

Have you purchased in Brisbane?
 
melbourne, deff broadmeadows 15-16kms from cbd

you can get 3 bed house on 300-400sqm (old mind you) for around 250k
rent 280-320
i know you prefer near new i prefer old.

QLD, redbank plains, bellbird park (close to springfield central)

about 5-6 years more worth of infrastructure

idk about nsw

Hi tj22,

Thanks for your response. I haven't researched Bellbird park before, so thanks for the tip. I've visited Logan, Kingston and Slacks Creek and had just missed out on a well presented property that I was interested when I last visited.

I haven't had any experience with renovating before so this would be an issue with an older style. Think this could be a challenge. I could set up a team to help out, but am concerned about the costs involved....... and honestly, there's the fear of the unknown too. :eek: Maybe I need to read Nimba's posts over and over to help build my confidence! ;)

i believe you live in Sydney? as your location states

as to finding IPs below $350K in Mount Druitt, i think is alot higher now as there have been significant CG.

Thank you Bumblegoodie, I too think that I've now missed that boat now. Western Sydney is still hot with all the development that is going on now. I've decided to leave it for the next few years and hopefully there will be some flat periods and less competition. I may be able to break into the market then, fingers crossed.
 
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