Getting investment affairs in order - our 5 year plan

Hi all,
I am finally getting around to organising my finances, investments and making our hard earned $$$ work better for us...
We have 1 residential investment property in Central West NSW (formerly residence purchased in 2009) and a property in Port Stephens (existing residence purchased in 2014).
We aim to purchase another 1 or 2 bed apartment in one of the major cities in the next 18 months, as next agenda item on our property port folio list, followed by a large block to subdivide and build a duplex. I have set myself 5 years to achieve all of this.
The goal is not to sell, but buy and retain what I can. if cash flow does not prevail in order to achieve this, then the duplex may need to sell 1 and retain 1 (this to fund the build).
The unit may need to be sold to fund the block purchase.
I would love to here some feedback or advice on the best way this can be achieved..(especially for the need not to sell to fund, but purchase and retain)

 

Hi @Matt B

I would look at what your overall affordability is and then work backwards to figure out how much you can buy. What if instead of one you could buy a couple of propertieS?

As you say - no need to sell to fund....what is your current equity position / LVR on the existing properties? That along with your income will be the key determining factors.

What price bracket are you looking in?
What is the rental return that you want to target?

I think it's important from the start to figure out what the possibilities are than buy one property at a time (it's a stab in the dark) and unfortunately far too common. I'd work with what the potential is, even if you don't have the means yet to get to your destination.

Again, why stop at one/two properties in 18 months, what if you could purchase multiple in a market that is rising? How different will your situation be in 18 months from now if this was the path?

Anyone who missed out on the Sydney boom will tell you the price of settling for less.

 

This is just my uneducated opinion... I know you said main goal is to buy and keep.

Red flag for me when you said you wanted to buy a unit within 18 months and then possibly sell that unit to purchase another property within 5 years. All the selling/buying costs and possible taxes will eat into profits.

If you are going to turn a property over within a few years, have a clear understanding of how you are going to make money on it and a rough idea of how much. Otherwise you are just buying for the sake of it.

 

What will these goals allow you to do? How will they make you future better?

 

@Matt B

Seems like a good plan in given time!

I like it that you have wording "sell" in your plans.

 

When you're ready to buy, why not look at what your money buys- you may not be limited to units and there could be opportunity to create your own equity via a quick Reno which will allow you to revalue and buy again sooner.

I'd also talk to a broker now, cos your properties might be worth more than you think and you might have a way to buy sooner. There are a couple of markets doing well at the moment with low buy in costs.