First time investor, hitting ground running!

Hi everyone,

My wife and I are looking to purchase our first investment property soon. I own my own business which has been going very well for the past few years and would like to use spare funds responsibly.

After costs of living, mortgage and loan repayments and a little bit of a buffer we're left with a spare cashflow of around 30K a year (give or take depending on dividends). We also have a minimum of $600K in equity in our PPOR.

We're really starting from ground zero here with no previous investment experience so I'm curious to hear what other members would do in a similar financial situation? I recently found this website and have been reading and absorbing everything I can! I have a pretty good working knowledge of business finance, but not so much on the investment side so any advice is very appreciated.

Thanks!

 

Welcome Sam

It sounds like you're in a probably in a position to invest in 2 or 3 properties straight up if that's what you want. Have a chat with an investment focussed broker and they'll be able to help you plan out your purchase/s based on your longer term goals.

 

Myself personally I would take all the equity I can out and then borrow as much as I can to where I feel comfortable and buy as many quality places in Brisbane I could find being houses on good size land (600m2+) about 10km from the CBD of Brisbane and close to the train line. My last purchase was a 3/1/1 fully renovated house on 1600m2 about 10km from Brisbane and 500m walk to train line, however this doesn't mean you should do this but this purchased matched our strategy and wasn't what we went out looking for to begin with but became part of it when the price was a bit silly to pass up and gave us plenty of options for the future.

However this is what I would do/did and NOT what YOU should do - there are to many factors that will influence what you would do as maybe you are not as big or bigger risk taker than me. Maybe you don't like debt where as I like debt (good debt that is manageable), I also chase the CG at the expense of CF (but not ignoring CF).

 

Congratulations, it sounds like you and your wife have worked hard to get to a place where you're both very happy.

Your general strategy is going to be very much dependent on your specific financial situation. For example, If you've got a business doing well and paying too much tax, you might want to pile on the debt and maximize deductions in the pursuit of capital gains.

Anyone feel free to correct me on the below-
The general consensus at the moment seems to be avoiding any units, townhouses or apartments anywhere.
There's a split camp between people who think you should look at established homes close to the city (e.g. @Big Will), or something in a developing regional area like Logan, Ipswich or the Northside.
There's also a bit of a split consensus on whether you should spend more on expensive property (e.g. quality property close to the city) or buy multiple cheaper homes (e.g. older home in Logan).

Assuming smart buying, the reality for you is probably a diversification of each of the strategies.