VIC Advice on strategy

Hi all,

I'm looking for some advice on a strategy to buy my first IP before I look at suitable suburbs.

I have approval for a 750k mortgage and can quite comfortably service that amount when interest rate increases come around.
I more or less own my ppor and the equity is pretty high. I have a couple of dependants under 5 and am in the top range of the second highest tax bracket.

I'd like something with balanced cg potential and cf, in and around the northern or western suburbs is preferred.

I'd rather purchase a house on a decent block in case i want to develop 7-10 years down the track. I'm open to a townhouse, however, I'd like to keep my options open.

What else should I be thinking about? Or am i now in a position to pick a suburb based on the above?

Speaking of, where would you be looking based on my criteria?

Cheers

 

Split and buy two smalliah and fairly new properties.
Don't go into development gig. Leave it to the pros.

Regards

 

@meggas55
With that sort of budget, you have the option to either buy two IPs, or alternatively one more expensive IP.

It will come down to what you want this property to do for you - is it capital growth, cash flow or a mix of both?

Good to have the upside to be able to develop down the track. Even if you choose not to, you can 'land bank' on it. However, such a property will have higher holding costs and likely a low rental yield. In comparison, having two cheaper IPs will have two income streams, which is good from a cash flow perspective, especially if you have one tenant vacate.

Are you OK to have negative cashflow for a long period of time or do you want this IP to have minimal impact on your lifestyle?

 

Thanks Rolf, my mortgage broker is all over it.

It's funny you mention that, I was just looking around at units in high rental yield suburbs and thinking maybe I should buy 2 or 3.

 

That essendon property is around the corner from me and sold for 790k, pretty cheap for the area although it is on a busy road/intersection.