Where to start

I really have no idea what I am doing but do want to start investing so I have something for retirment.

Back story : Mid 30s, Homeloan, approx 130k equity. Few bc shares, small amount of cash in bank.

I've heard about a investment strategy where I should be buying an investment property or 2 every year for 10 years, renting these out and at the end of the 10 year period sell 5 of the houses to pay off the other houses.

Does this actually work or has anyone done this? I earn an OK income but would hate to have more than 1-2 houses not rented as I'd have to earn more money.

I'm sure these threads come up from noobs from time to time so apologies in advance. Just wanting some advice from experts.
 
Well, you're in the right place for edumacatin'. Lots of knowledgable folks on here. If you've got the equity to buy a place, probably your first stop should be an investment property savvy mortgage broker. There are plenty on this site. Then you can suss how much you're able to borrow and go from there.

I wouldn't sweat it too much about finding the 'right' property. Property is a pretty forgiving asset class. If you can hold on for the long term, it's hard not to do okay.
 
With property investing you need to have a reasonable cash buffer (or good alternate cash flow).

There are a lot of different approaches but the main challenge is holding them long enough for the growth benefits to kick in.

We had a couple of properties that really chewed up our cash over a 5 year period - but we are really happy we hung on to them as they have paid off with growth over the last 2 years.

We have now really worked hard to improve the cash flow on them (granny flats and renos) but even now there are always things coming up that need further cash.

However there is now that option now to sell to pay off others and have a reasonable cash flow - but it seems better to hang in there a while longer.
 
first thing to do is spend a bit of time reading everything you can on the forum . There are some knowledge people here who know what they are doing , there are some very prolific posters who haven't bought a property .


While property can be forgiving , assuming that any property is going to be ok is wrong , If you buy in the top of the market in a particular market your return will not be good and it might be a long time before you see capital growth. Search gladstone . We've only bought in capital Cities or regionals with a diversified economy ( rocky or townsville ) we didn't buy in Gladstone or Cairns ,

By my estimation we started investing around one cycle ago . Sydney had moved and brisbane had started moving . We bought el cheapo's in Logan , rocky and hobart . Ended up selling most of them to pay for a developement in Sydney . When the GFC hit we were cashed up ( I didn't predict it , but I was prepared for it , Something always happens ....) and bought well positioned properties in Sydney . These have all done well . We then went and bought more properties in Brisbane around a year ago when the market was starting to show signs of moving . This time we bought in more upmarket places in Brisbane ,

You can make good money in Cheap suburbs , but more hassells. What I wouldn't do is buy really cheap properties in logan or Mt Druiit. We did in logan , and the cheap properties get the worst tenants . Buy 1-2 steps up from the bottom.

There's a lot of people around who believe that you should never sell , but We've done it and it's worked well for us though it may not be as simple as buying ten and selling half off to pay the others out as you have to pay CGT.

Cliff
 
Appreciate the thoughts.

The way I am looking at it at the moment is I could afford a residential investment IF it was rented. So I guess most people in the know would say I can't afford it.

My other option is to buy a commercial property. There is one in particular I am interested in a close rangfe to the city and around the $200k mark. That said, fro9m what I've read I can expect to pay a higher interest rate of around 9%. The property I am interested in, could potentially be split up so that I could lease a portion of it. Only problem with this scenario is I probably only have around $20k in cash. The rest woul dhave to be equity from my home, if that is even do-able. I am not sure.

I can earn more income, but at the moment choose not to so I am not paying extra tax on it.
 
I'm fairly new to investing myself....started researching about a year ago and read a bunch of books / magazines / blogs / and of course this forum. I found Michael Yardney's books to be pretty useful if you're starting from scratch although you'll pick up most of the concepts elsewhere as you go along. There are plenty others out there too so spend some time checking them out.

For me one of the most important things I found is to get the loan structure right...I've made a few mistakes in this area so definitely go through a broker who knows what they are doing. Have since purchased 2 IPs and happy with them so far.

For anything you're not sure about, jump on here and ask some questions and people are very quick to respond.
 
I can earn more income, but at the moment choose not to so I am not paying extra tax on it.

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Hi See Change
I enjoyed reading your post above and there are some real gold nuggets there for anyone interested in becoming a professional investor. Your path seems quite deliberate rather than random deals just popping up on the radar.
May I observe three of the most important points to take from your experience, from a investor psychology perspective :
1. Extensive market research to clarify what city/suburb to buy into, and what type of property to buy in that area (to best protect against boom/bust situation)
2. When you have sold, it is typically only to step up into a better property with more upside / opportunity, usually in an upgraded location.
3. Don't go stale when the market turns sour or quiet, as it inevitably will.....look to improve the quality of your portfolio when it is a buyers' market as better opportunities present themselves.

I have two further questions if I may..
a) How many properties are in your portfolio now (from a standing start one cycle ago), and
b) Are you actively looking for opportunities in this market, or do you feel things are getting a bit toppish in the eastern capitals ?
 
I can earn more income, but at the moment choose not to so I am not paying extra tax on it.

Interesting concept but even in the highest tax bracket you still keep 55c of every dollar you earn over $180K. If you want to earn more money from your individual effort (work) and pay less tax you need to look into negative gearing into property with potential for capital gains and see if its for you. Need reasonable cash flow though.
Cheers, nat
 
I'm sure at one stage many years ago i was paying 60% tax as it was earned in a short time frame, I also recall paying provisional tax when working as a contractor- a benefit is that due to this work, I can quote my TFN verbatim due to putting it down every fortnight.

I can quote my drivers licence number as well...is that a good thing or veering towards a disorder :D
 
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