22 yo - Investment story so far

Hi All!

I joined this forum a few months ago and thought I may share my investment story so far..

Purchased my first investment in Pakenham VIC at 19 yo in 2015. 3 Bed 1 Bath, big flat block for 285k rented for 310 p/w. Re valued last week for 340-370k.

Purchased my 2nd IP with my partner in the Yarra Valley VIC for 385k in 2016, Rented for $400 p/w straight away. 4 Bed, 1 Study, 2 living, 2 bath etc. Re valued last week for $440K+.

Now we are a looking for our 3rd IP. We are currently looking in Ballarat with a Budget of $250k but the cheaper the better.. Any advice on where exactly in Ballarat to purchase would be great! Not sure whether to buy an old or new house..

Thanks for reading
MaddyG

 

Welcome to PC.

Well done so far.

Are you working to a plan? Have you defined your goals? Is your plan aligned to your goals?

The above are really serious questions that I would recommend you sort out first, if you haven't done so.

Otherwise, as they say, "if you don't know where you are going, any road will get you there".

 

Hi Kierank,

Thank you Yep we have a plan with defined goals written down!

 

Would you mind sharing? Obviously, not the nitty gritty personal numbers but the higher level stuff.

I am interested in how Ballarat fits into the big picture, given your first two purchases.

Not criticism, just genuine interest.

 

To summarise it, we would like to be financially free by the time we are 30.. So we have 8 years to do this.

Ballarat is where I have chosen at this point in time based off the information I have read off here, our budget, and the research I have done myself. Is there something or somewhere you would recommend instead?

 

Hi MaddyG and grats on your success so far, hope it keeps on going on

You can also buy houses in capital cities with that budget if you look far enough. Might be an option as opposed to country towns (or as well as!)

 

Thanks! I am a bit 'scared' to purchase interstate.. I know that may sound ridiculous to most investors, but for this one I think I will purchase in VIC again.. What capital cities would you recommend where you can purchase under 250k?

 

Congrats @MaddyG you're absolutely killing it for your age.

I'm hearing alot of positive things about Ballarat so I think you might be onto something. It should start experiencing the ripple effect coming out of Melbourne similar to what Wollongong has done out of Sydney.

Also, buying interstate is not as scary as you might think. You can either engage with a buyers agent to do all the work for you or engage with a property manager that you trust to do the pre purchase inspections on your behalf.

 

Thanks Jack! I was just reading your story before.. Love your work haha! Would love to know where your plans are to purchase next?!

 

I'm not saying you are doing this but I would be wary of buying lots of cheaper properties and falling into the trap of aiming to own x number of properties rather than taking a more strategic approach that may mean you have two more thought out purchases rather than four ok properties (as a random example). This was something that I struggled with when I first started and it cost me quite a bit. Good luck

 

Thanks Cimbom! I appreciate and take onboard any advice, anyone is willing to give me! So will consider this before I purchase another

 

yes, its quality not quantity, the best quality and quantity

if someone has 200 sydney/melbourne props purchased before the boom, then they would be my god

 

Awesome work - and starting out at a young age too. It will serve you well.

 

I'm going to go against the grain here, and say that quantity matters too BUT to make sure they are of good quality.

For example, I'd rather have 10 x $250k IPs churning out $300pw each, than 5 x IPS churning out $450pw.

There's a few reasons for this. The yield is often better in the cheaper properties, and yield is important, both to obtain finance, and your ability to hold long term.

You can buy again much quicker, and keep your momentum going, if you need a smaller deposit or equity pull, in order to buy the next property.

When you want to sell, you can do it in smaller chunks. So instead of selling one expensive property in a financial year and coping a large CGT liability, you can sell one cheap property at the end of the financial year and another at the beginning of the next one, saving a heap of $.

So long as you've bought well, a rising tide will lift all boats in an area, so you will still get CG, no matter if you buy a cheapie or a more expensive property in an area.

Please note, that I'm not suggesting buying a dump in the back of Bullamacanka, but looking in the area that you would normally choose and looking for something that is below the median for the area.

 

What is your projected end goal income and what assumptions have you made?

Great work so far, and with a little luck you'll be rich eventually, but financially free by 30 is unlikely.

 

Buying interstate. ... What's $1000 for flights and accom between friends ie- accountant and ato loose change if you want to get ahead
gotta spend money to make money!

 

Oh and congrats for your hard work to get you where you are now!

 

Well Done @MaddyG I wish I started when I was your age! Everyone has posted some good tips but I will say that every property that you buy has to help you get close to your end goal (whatever that is). If that next ppty wont set you up nicely for the following then it might not be a good ppty to buy.
Also buying interstate can be daunting but if you do it right, its not so hard. You'll need to build a good team so they make your life easier. So find a good solicitor, PM, Builder (if you plan to reno) and build relationships with those people..plus REA's. Then...do some research on pptys you like, fly up Saturday morning, check out the market, meet some REA's, meet the solicitors, PM's and Builders and then fly home. In the grand scheme of things a few flights won't hold you back financially...plus you'll build relationships, which is vital to your success (similar to what you've probably done with your other pptys).