Too hard, too fast?

So the basic question, where you want to go from here?
What is your main goal?

Honestly I'm looking to have sufficient passive income to either supplement my existing income or enable me to choose not to work if I wish, thus obtaining the much sought after financial freedom.

50k passive income would be much more than I earn already and I'd be happy with that, however 100k passive would be incredible and it is my goal. I feel it's better to aim higher. In terms of time frame, the sooner the better.

That's why I'm not sure if I should invest aggressively to feel the greatest effect of compounding interest or take it a bit slower to try and prevent the chance of wiping myself out and having to start again.
 
Honestly I'm looking to have sufficient passive income to either supplement my existing income or enable me to choose not to work if I wish, thus obtaining the much sought after financial freedom.

50k passive income would be much more than I earn already and I'd be happy with that, however 100k passive would be incredible and it is my goal. I feel it's better to aim higher. In terms of time frame, the sooner the better.

That's why I'm not sure if I should invest aggressively to feel the greatest effect of compounding interest or take it a bit slower to try and prevent the chance of wiping myself out and having to start again.

You should be able to mitigate chances of wiping yourself out by the properties you purchase, vacancy rates, cash surplus, expected growth/DD.

I think purchase when you can afford to purchase, at the time try purchasing the best assest possible within a reasonable timeframe ensuring that you have surplus cash if something goes wrong.
 
Honestly I'm looking to have sufficient passive income to either supplement my existing income or enable me to choose not to work if I wish, thus obtaining the much sought after financial freedom.

50k passive income would be much more than I earn already and I'd be happy with that, however 100k passive would be incredible and it is my goal. I feel it's better to aim higher. In terms of time frame, the sooner the better.

That's why I'm not sure if I should invest aggressively to feel the greatest effect of compounding interest or take it a bit slower to try and prevent the chance of wiping myself out and having to start again.

Maintain a buffer to cover vacancies/maintenance issues and aim for neutral/CF+ purchases and you will be able to mitigate most of the associated risks.

You mentioned living regionally and working for a relatively low wage, there isn't any other form of side jobs you can use to supplement your income? The obvious main drawback in your current situation is income, as you have the will and early progress to succeed. If you can find some other/another form of employment which can assist that will obviously provide you with greater peace of mind and open opportunities for the future.
 
I haven't really looked into NRAS properties at this stage, I'm not too familiar with them but it's certainly worth looking into further. Thanks for the recommendation.

Before you go down the NRAS route you need to be aware that it may wreck your future servicability with many banks, particularly with a low income.

Get a broker to run some scenarios what your future borrowing ability may be after another normal purchase versus a NRAS purchase.
 
Well done Kookie7, I wish I had your drive at age 24! (lived at with parents playing Diablo 2 at the time :).

Great going so far, sticking to areas you know and CF+ properties goes a long way.

The major risk to long term real estate investment is being forced to sell at a bad time. Perhaps you can do some self stress-testing to see if you are comfortable with some adverse events? For example, if RBA raise interest rate by 1-2%, if you lose your job for half a year, one of the property remain vacant for 3 month, or require some heavy one off fix etc
 
re NRAS

I have a rule of avoiding any investments which seem contrived or based around special rules. ( only exception is I do make use of is negative gearing ..)

This might have kept me out of some profitable investments but it's also kept me out of some major disasters including one that effected many forumites

Once you've been around for a while , you will realize that the problem isn't finding opportunities , but deciding which ones to go for.

Hence I have blinkers on when it comes to NRAS . Wouldn't even think about it.

Cliff
 
Well done Kookie7, I wish I had your drive at age 24! (lived at with parents playing Diablo 2 at the time :).

Great going so far, sticking to areas you know and CF+ properties goes a long way.

The major risk to long term real estate investment is being forced to sell at a bad time. Perhaps you can do some self stress-testing to see if you are comfortable with some adverse events? For example, if RBA raise interest rate by 1-2%, if you lose your job for half a year, one of the property remain vacant for 3 month, or require some heavy one off fix etc

Ahh, don't worry - I spent many hours and late nights playing Diablo 2 as well!

I have an Excell sheet that I throw figures in to see how I'm tracking (it's not complex by any imagination), that was the catalyst for this thread. I put some numbers in there to see where I'd sit with another purchase and it was fine as long as rates don't go up substantially very quickly (or another property disaster such as exploding hot water systems).

So I didn't know wether to buy another property and hope for the best or wait and see while saving a buffer (ever so slowly)...
 
Maintain a buffer to cover vacancies/maintenance issues and aim for neutral/CF+ purchases and you will be able to mitigate most of the associated risks.

You mentioned living regionally and working for a relatively low wage, there isn't any other form of side jobs you can use to supplement your income? The obvious main drawback in your current situation is income, as you have the will and early progress to succeed. If you can find some other/another form of employment which can assist that will obviously provide you with greater peace of mind and open opportunities for the future.

Thanks for the feedback CJay, I have looked into different and additional employment opportunities such as a second job but it's a bit of a struggle in this area, higher unemployment levels than state average.

re NRAS

I have a rule of avoiding any investments which seem contrived or based around special rules. ( only exception is I do make use of is negative gearing ..)

This might have kept me out of some profitable investments but it's also kept me out of some major disasters including one that effected many forumites

Once you've been around for a while , you will realize that the problem isn't finding opportunities , but deciding which ones to go for.

Hence I have blinkers on when it comes to NRAS . Wouldn't even think about it.

Cliff

Thanks Cliff, I appreciate the honest information.
 
Well done Kookie7 on acquiring to IP's at 24. IMO the best investment you could make at this stage would be in your vocation. Imagine what you could achieve if your salary was double what you are getting now. You seem to have the nous, so put it to good use. I too am from your area and $35k a year seems quite low.
 
playing d3 now.. expansion out next week haha

d3 was such a disappointment compare to d2...

anyway in the mean time back to investment property, SE Brisbane drop rates seem to be quite high at the moment, planning to do a few runs there haha :)
 
Somesoft D2 run untwinked? I'm getting withdrawal symptoms just thinking about it....

Ahh... I feel the nostalgia creeping in.

d3 was such a disappointment compare to d2...

anyway in the mean time back to investment property, SE Brisbane drop rates seem to be quite high at the moment, planning to do a few runs there haha :)

Indeed, the shine came off D3 pretty quickly unfortunately.

Well done Kookie7 on acquiring to IP's at 24. IMO the best investment you could make at this stage would be in your vocation. Imagine what you could achieve if your salary was double what you are getting now. You seem to have the nous, so put it to good use. I too am from your area and $35k a year seems quite low.

I agree, I'd love to have additional income but not sure how to go about it, certificates and the like are quite expensive and time consuming without any guarantee that it'll pay off.

That's the primary reason why I'm aiming for cash flow + properties as a way to service the loans and property expenses.
 
My suggestion to you Kookie7, is that you use part of your savings ($30k) you said you have, to attain additional qualifications to enable you to acquire better paying employment. While you are still under Mum & Dads roof is a golden opportunity to advance your employment prospects. Nothing ventured, nothing gained.
 
Kookie,

I also started at 24 on $30k and the best way I see to move forward is to develop. Create equity, create positive cashflow.

If you do this with every move you make, you will never run out of equity to borrow against and your serviceability will only increase, meaning the amount you can borrow will continue to rise with each development.

People talk about holding negatively geared properties until they provide equity and become cashflow positive - skip the ten year wait and do ten developments, of ever-increasing size, in that time.


IMHO of course,


Jeremy
 
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My suggestion to you Kookie7, is that you use part of your savings ($30k) you said you have, to attain additional qualifications to enable you to acquire better paying employment. While you are still under Mum & Dads roof is a golden opportunity to advance your employment prospects. Nothing ventured, nothing gained.

Fair comment Harro.

Kookie,

I also started at 24 on $30k and the best way I see to move forward is to develop. Create equity, create positive cashflow.

If you do this with every move you make, you will never run out of equity to borrow against and your serviceability will only increase, meaning the amount you can borrow will continue to rise with each development.

People talk about holding negatively geared properties until they provide equity and become cashflow positive - skip the ten year wait and do ten developments, of ever-increasing size, in that time.


IMHO of course,


Jeremy

Good point Jeremy, I never really looked into developing though as I thought (probably wrongly) that you needed a lot of cash/equity to be able to afford a loan for land and construction plus holding costs while the property is being developed. Also the concern of development blow outs. I'll happily admit I know nearly nothing about developing so that's probably why is scares me a little.
 
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