The Next Step

[SkyHigh]

Hi everyone,

First time poster, long time lurker.

I'm after a bit of advice/guidance as I feel I'm getting a little lost on my property investment "journey", mostly due to some bad decisions that have been made previously. I don't want to repeat that and set myself back further.

Quick rundown:

Income $175k. Wife not currently working due to young child. Don't own a PPOR. Currently renting at $630/wk. Lease ends in January so we will be looking to trim that back by moving somewhere cheaper. ($550-$600). Softening rental market in Perth should help that.

My strategy has always been buy and hold. I don't necessarily want to retire early like a lot of people here - I actually enjoy my job and have career goals I want to achieve. Part-time would always be nice though! I simply want to achieve financial security in retirement so I can enjoy the finer things then.

IP 1 - Value $680k. Debt $630k IO. Rented out at $550/wk, shortly to increase to $580/wk. $150/fortnight cash flow negative. $20k in offset account parked against this. Situated on the Gold Coast so not a great time to sell as I believe I will finally see some CG here.

IP 2 (OTP apartment under construction, completion due July 15). Will hopefully be valued around $500k, 90% LVR, IO loan. Close to cashflow neutral depending on rent.

The reason I've titled this "The Next Step" is because I need to make a decision. Do I work towards a PPOR, and if so, will this hold me back from further investment properties? We would look to spend around $750k on a PPOR, in 3 years once we've saved a 10% deposit.

Or do I refocus on the property investment goal and make smarter purchases...cash flow positive properties with good long term growth prospects.

I want to hear stories about people who have rented long-term with families. I know the benefits are there to renting and investing elsewhere, but I feel with a growing family I'm going to feel that "emotional" desire to buy a PPOR and set some roots down. My wife is supportive either way - she understand the financial benefits of investing in property and has a 50% share in a property of her own.

I almost feel like we've done this the wrong way around. Buying a PPOR and then building an investment property portfolio from that would have been simpler and easier in hindsight!

Looking forward to any insights, stories or advice people might have.

 

[Propertunity]

....Do I work towards a PPOR, and if so, will this hold me back from further investment properties?

Yes and yes.

Or do I refocus on the property investment goal and make smarter purchases...cash flow positive properties with good long term growth prospects.

I'd do this after the PPOR purchase.

.....but I feel with a growing family I'm going to feel that "emotional" desire to buy a PPOR and set some roots down. My wife is supportive either way ....

Although renting is cheaper and allows you to buy more IPs, you still need a life. As the saying goes, life is a journey not a destination.

Renting gives you no security of tenure and no ability to even change the colour of a wall if you want to. The LL can jack up the rent or fail to renew a lease or sell - giving you only weeks or months to find a new place.

I think you've done well. You have 2 x IPs, they can grow while you buy and settle into the PPOR. Once settled in, then start with the investing again.

 

[Rolf Latham]

I almost feel like we've done this the wrong way around. Buying a PPOR and then building an investment property portfolio from that would have been simpler and easier in hindsight!

hard to navigate forward while looking too much in the rear view mirror.

Lots and lots of peops are in similar scenarios, with travellers having come back from long times away, or expats coming home...........

For the most part, getting onto a goal that works for you and sticking with the financial steps along the way usually has good outcomes.

have a read of "the Slight Edge" by Jeff Olsen, it will help a little with the little things

ta
rolf

 

[SkyHigh]

Thanks for the replies, I appreciate it.

I shouldn't have regrets or look backwards. I know I've laid a solid foundation. I just don't want to be part of the large percentage of investors who end up with just a couple of properties. I'm capable of more than that, especially on my income.

Educating myself further is a big part of it...thanks for the book tip Rolf.

 

[Rolf Latham]

Thanks for the replies, I appreciate it.

I shouldn't have regrets or look backwards.

Educating myself further is a big part of it...thanks for the book tip Rolf.

welcome

Tony Robbins says be careful with shoulding all over your self............ I learnt a bunch from him

ta
rolf

 

[datto]

Tony Robbins says be careful with shoulding all over your self............ I learnt a bunch from him

ta
rolf

It is through Tony, that I am what I am today.....

...unleash the power!...I can walk on hot ashes! (if I have to)

 

[Rolf Latham]

It is through Tony, that I am what I am today.....

...unleash the power!...I can walk on hot ashes! (if I have to)

its through YOU.

Tony is a great enabler, but no magician, that he will tell u himself.

mastery university is fun, and there is lots more on the other side

ta
rolf

 

[Jaggannath]

Is Tony Robbins the guy from Shallow Hal?

SkyHigh, you're doing fine. You know what you want to achieve, but I think you need to decide what's more important to you first.