Hi,
With my own house paid off I'm reasonably OK doing the basic maths for the 1st Investment Property scenario.
QUESTION: How does one determine however, when to make a purchase on the 2nd IP? That is, how many years after the purchase of the 1st IP? Some things that come to mind:
Option A: Assume you know want the 2nd IP value to be $XXX. In this case would you just keep looking for the first point in time that the newly calculated figures (i.e. including the 2nd IP):
Option B: Assume you did not have a required value for the 2nd IP? Ummm, in this case you would need to compare whether it's better to buy a $200k unit earlier as the 2nd IP, or wait longer and get a $400k house say no? How would you determine what's best here?
Thanks in advance
PS. The spreadsheet may start to get a bit messy...any comments on whether the PIA software is well worth it to assist here (as opposed to creating bigger and bigger spreadsheets)
With my own house paid off I'm reasonably OK doing the basic maths for the 1st Investment Property scenario.
QUESTION: How does one determine however, when to make a purchase on the 2nd IP? That is, how many years after the purchase of the 1st IP? Some things that come to mind:
Option A: Assume you know want the 2nd IP value to be $XXX. In this case would you just keep looking for the first point in time that the newly calculated figures (i.e. including the 2nd IP):
- (i) the DSR (loan payments / eligible income, i.e. affordability) is less than 1. This would be a prereq for a bank offering you more $$$ from what I understand(?)
- (ii) the LVR (Loan to Value ratio) was below an acceptable level, say 90%???
Option B: Assume you did not have a required value for the 2nd IP? Ummm, in this case you would need to compare whether it's better to buy a $200k unit earlier as the 2nd IP, or wait longer and get a $400k house say no? How would you determine what's best here?
Thanks in advance
PS. The spreadsheet may start to get a bit messy...any comments on whether the PIA software is well worth it to assist here (as opposed to creating bigger and bigger spreadsheets)