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First timer weighing up the options

Discussion in 'General Property Chat' started by Spoony, 27th Sep, 2016.

  1. Spoony

    Spoony Active Member

    Joined:
    17th Aug, 2016
    Posts:
    26
    Location:
    Brisbane
    I'm a noob and possible first time property investor, looking at using the approx $100k (based on 80% LVR) of equity I have in my PPOR to get into an IP. I'm based south of Brisbane.

    I've been reading various sources, blogs, PC and listening to 'The Property Couch' podcasts (most of the way through them all) and certainly know way more in this space than only a month or two ago.

    As my income is quite average (72k pa) cashflow isn't huge so reasonable yields would be required.

    The Property Couch blokes seem to love closer to the city and really look for growth growth, however with my funds/cashflow something that that would net maybe a 2 bed unit, with limited yields. Seems an oversupply of unit's is happening in Brisbane too, so would purchasing only in a small 6-8 unit complex mitigate much of the negative effect this would have?

    Alternatively I could look for a cheaper house further out with better yields, though growth will be likely poorer.

    Or a larger property further out with a dual living type setup, or potential to modify and set this up, so as to net maximum rental be a good initial first step? initial work adding rental appeal/value, capital gains and deprecation straight up in this example

    I'm curious to hear anyone starting or who has started out in a similar position and the path taken.

    I've also got my reservations as to now being a good time too, as for many markets it appears growth is going to be minimal over the coming years. The fear factor has one thinking just pay down the PPOR at the moment, but then the FOMO factor says why wait.
     
  2. Brady

    Brady Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    461
    Location:
    Adelaide, SA
    Are you set on buying in QLD?
    Have you extracted the $100k already?
    Have you spoken to your banker/broker about how much you can borrow?
    Are you planning to just buy 1 property or continue?
    If planning to continue will you be using all of the $100k for 1st property or $50k now and $50k later?
    Can you service buying another property?
     
  3. Spoony

    Spoony Active Member

    Joined:
    17th Aug, 2016
    Posts:
    26
    Location:
    Brisbane
    Thanks for the response and questions.

    Not 100% set on QLD but the Brisbane, Logan, Ipswich areas do have the advantage of a good long time friend acting as a property manager for both discounted rates along with piece of mind as shes really good. (she's principal in her own firm).

    The equity has not been extracted yet, I'm currently in communication with a broker at the moment and should hear more back this afternoon.

    How many properties may be determined by the GFs and I's lifestyle plans. Hoping to pay off the PPOR in 6 or a bit years, do some renos on it in that period and then sell it to relocate on property more remote which may effect earnings.

    Aim is to have smaller mortgage on new PPOR and reducing on IP(s) to have largely paid off netting a passive income in 20 or so years without mortgage outgoings

    How much of the equity is used I figured would somewhat be determined by the IPs value. I'd rather leave a bit of a safety net in reserve.

    If I had to I could service the ppor at min P&I prepayments (currently paying more) and IP at IO , but the aim is for the IP to cover itself or preferably net some positive to help pay down the PPOR quicker.