A brief history....myself 37, partner 41 stable, well paid jobs and getting serious about our future retirement.
We moved to Melbourne from the UK almost 6 years ago, kept the UK house which is still rented out and had the grand plans of buying into property here in a big way.
Fast forward 6 years and we hadn't put any of the plans into action, too much reading, not enough doing.
Got a kick up the backside form a certain fellow on this very forum, and the result is we settle on out next IP in West Sydney on 3rd June. Technically our 2nd IP, but class it as our first "true" one.
The strategy...buy houses on decent blocks with potential for cosmetic reno, granny flat or sub division further down the line. The properties must be able to be let straight away with no reno requirements though. Buy and hold long-term. Buy 2 now and aiming for a total of 10 over the next 10 years, then sit on them all for a further 5 and pay down as much as possible over that time. Revisit for potential granny flats/sub divisions as we go.
Finance is all in place for deposits for 2 IP's from re-structure/refinance of the PPOR. IP 1 is now set, so onto IP2. IP3 will follow in approximately 12 months as we will need to save and/or increase equity in the current properties to be able to cover a deposit and costs. Cash buffer is in place, but that's at a level at which we don't want to touch for purchases, it's emergency cash to cover holding costs if the need ever arises in the future to avoid "having" to sell.
We used a BA for the first purchase as we were just procrastinating too much and nothing we looked at was ever "right". Using a BA was invaluable for us as it really helped remove the emotion and made us get on with things.
For IP2 we had been thinking of Ballarat. We've been paper researching properties there the last few months and drove around most of the area local to the CBD to get a feel for the place. Budget is $350k ish and it looks like we can get something old, close to town on a big block for that sort of money. Period house with a sound structure is what we are looking for as they would be the in demand properties when Ballarat expands.
The dilemma is that the yield wont be great early on. We're at about 80% LVR on the PPOR after pulling out equity, we're 95% on the Western Sydney house and we'll be 95% on the next house.
We're still very keen on Ballarat and it will be a long term hold, but at this stage in the acquisition cycle we're wondering whether the $350k budget would be better served elsewhere, (anywhere that isn't a one industry town), and use a BA again?
We do want to purchase in Ballarat, but in the back of my mind I keep thinking there may still be a bit of time to get into there, and the buying there now may mean losing the opportunity of our current borrowing power working as hard as it can?
We're tempted to look for another one in Western Sydney, as although the first was bought sight unseen through the BA, there's a familiarity about the area now. The pro's of this is already having a relationship with the BA & PM in the area, the cons are it may already be at then end of it's run and by buying another property in a similar area at a similar price, we're effectively our own competition if they're both empty at the same time.
Any thoughts on an alternative area to start looking at outside of Vic would, (via a Buyers Agent), would be most appreciated.
Cheers.
We moved to Melbourne from the UK almost 6 years ago, kept the UK house which is still rented out and had the grand plans of buying into property here in a big way.
Fast forward 6 years and we hadn't put any of the plans into action, too much reading, not enough doing.
Got a kick up the backside form a certain fellow on this very forum, and the result is we settle on out next IP in West Sydney on 3rd June. Technically our 2nd IP, but class it as our first "true" one.
The strategy...buy houses on decent blocks with potential for cosmetic reno, granny flat or sub division further down the line. The properties must be able to be let straight away with no reno requirements though. Buy and hold long-term. Buy 2 now and aiming for a total of 10 over the next 10 years, then sit on them all for a further 5 and pay down as much as possible over that time. Revisit for potential granny flats/sub divisions as we go.
Finance is all in place for deposits for 2 IP's from re-structure/refinance of the PPOR. IP 1 is now set, so onto IP2. IP3 will follow in approximately 12 months as we will need to save and/or increase equity in the current properties to be able to cover a deposit and costs. Cash buffer is in place, but that's at a level at which we don't want to touch for purchases, it's emergency cash to cover holding costs if the need ever arises in the future to avoid "having" to sell.
We used a BA for the first purchase as we were just procrastinating too much and nothing we looked at was ever "right". Using a BA was invaluable for us as it really helped remove the emotion and made us get on with things.
For IP2 we had been thinking of Ballarat. We've been paper researching properties there the last few months and drove around most of the area local to the CBD to get a feel for the place. Budget is $350k ish and it looks like we can get something old, close to town on a big block for that sort of money. Period house with a sound structure is what we are looking for as they would be the in demand properties when Ballarat expands.
The dilemma is that the yield wont be great early on. We're at about 80% LVR on the PPOR after pulling out equity, we're 95% on the Western Sydney house and we'll be 95% on the next house.
We're still very keen on Ballarat and it will be a long term hold, but at this stage in the acquisition cycle we're wondering whether the $350k budget would be better served elsewhere, (anywhere that isn't a one industry town), and use a BA again?
We do want to purchase in Ballarat, but in the back of my mind I keep thinking there may still be a bit of time to get into there, and the buying there now may mean losing the opportunity of our current borrowing power working as hard as it can?
We're tempted to look for another one in Western Sydney, as although the first was bought sight unseen through the BA, there's a familiarity about the area now. The pro's of this is already having a relationship with the BA & PM in the area, the cons are it may already be at then end of it's run and by buying another property in a similar area at a similar price, we're effectively our own competition if they're both empty at the same time.
Any thoughts on an alternative area to start looking at outside of Vic would, (via a Buyers Agent), would be most appreciated.
Cheers.
