Hi, I'm new here :) Here's a little bit about me

Hi, I'm Dan

I'm a 26yo high school teacher with three (soon four) investment properties around the Greater Brisbane Area.

I started getting into property investing by listening to the 'Everyday Property Investing Podcast' with Kaz.

All of my properties are real cheapies; all bought for under $250k
My first is a 3bdrm TH in Pacific Pines (Gold Coast, 2012)
My second was a 3bdrm house in Eagleby (Logan, 2013)

In 2014/15 I travelled around Europe teaching!

My third is a 2bdrm TH in Redbank (Ipswich, 2016)
My fourth is a 1bdrm unit 50m from the beach in Alex Heads! (Sunshine Coast, 2016) it settles on the 12th of Dec!

Feel free to ask me any questions or provide any thoughts or advice As I'm young, I prefer a long term, buy and hold, +tively geared strategy. I also pay P&I on all my loans.

I do have two questions!

I'm looking to get married/engaged next year. My gf has never bought a property and lives with her parents. I know we can't get the FHOG if we are married (due to me having properties) but when we are engaged, can I act as guarantor for the loan so she can purchase?

Also, do any of you have 'groups' where you all chip in for RP data access? If so, PM me and I'd love to join!

Cheers!

Dan

 

Welcome from one cheapie investor to another. Probably be best to talk to one of the many brokers on here on the best way to move forward. What was your reasoning for P & I on all loans? I can understand one or two with a number of offsets but all four will limit your borrowing power significantly.

 

Thanks

It's forced saving for me. I can usually negotiate a slightly lower interest rate too. Sure I could save that money and have options, but I think I'd spend it on non-investment related item (probably travel!). I want to force myself to get the principle down so I can reap the rewards in 20 years time (I have time being young), where the repayments coming in are generating significant equity, instead of paying interest.

All my properties are postively geared with p&i (if you include tax benefits too) so no real limits to my servicing capactiy. I assume that's what you were referring to with borrowing power? I'm not sure why going P&I would decrease my borowing capacity.

 

Hi Tony,
Can you please explain, how PnI loans would decrease DC090's borrowing capacity?
Thanks

 

Are you sure you can't get the fhog? Thought it was only if one of you had claimed it before, hence you could have investments. Wouldn't surprise me if it has changed.

I would seriously reconsider paying p&i. Paying the same amount into offsets would result in the same interest payments, more flexibility and importantly much more tax efficient if you ever buy a home to live in. You can use the cash on the offsets vs drawing equity resulting in greater tax deductibility.

Well done with what you have achieved so far. Have you enjoyed much capital growth?

 

@RJS Allow me

To be fair, these days having P&I payments is actually better for servicing with most banks until it isn't. At that point, you'll need to have them on IO payments to make use of the next round of more generous lenders. At this point, you'll be needing a 20% deposit for most lenders, so when you're getting close to hitting the wall you need to access all your equity, change to IO on all your loans, and continue buying with these lenders.

@DCO90 Do you have a house you live in, or are you renting? There are lots of reasons to pay IO that will help you get ahead, servicing not withstanding. For eg, paying off a PPOR first, then paying off the IP's is more tax effective. If you're renting, saving as much as you can in cash (into an offset) means you'll have a much bigger deposit for your eventual home when the time comes, and maintain your IP deductions after you buy.

The aim is maximum deductible debt, minimal non-deductible.

BUT - if you'll spend on holidays, you're probably doing the right thing.

 

Hi Dan, I'm Dan, Nice to meet you .

I'm a bit newer to this game than you having just bought my first IP but guess what, I settle on Dec 12 too!!!! .

Good on you for getting in whilst you are young, I sure wish I had but no point living in the past, just gotta do my best moving forwards .

This forum is a great collective brain, you will be surprised just how much information and more importantly support is willingly given for free on here .

 

Thanks for the replies!

I've already used it to purchase my first investment property. I actually 'lived in it' as my PPOR while I travelled overseas.

Yes, just got my valuations back from the bank a few weeks ago. My first property around 65k in four years (which, due to the small purchase price is over 25%!. My second around 45k, which is over 15%, in three years! I guess some places might've had better return, but I am happy.

I've also increased equity by paying down the loan (only what I needed to with P&I) so I'm pretty happy! The one at the beginning of the year was valued the same So, all up, just over 160k equity in my portfolio.

None of the above! I'm scrounging off my parents atm! Though I do pay $150pw board haha. They've not helped me directly with my investing, but, in this way, they have helped indirectly and I am thankful for that.

Yes. Thanks for all the advice guys But until I can trust myself I don't want to take the risk of paying I/O. I know there has been several times my finances have been tight recently and I'd almost certainly have forgone paying off principle unless I had to. It also gives me a buffer in a time of financial stress. E.g., if interest rates go up or I'm out of work for a while, I can always switch to IO to help with cash flow. Maybe I will change my mind one day, if my situation changes

 

Good on you mate! Where did you buy if you don't mind me asking? Thought, you've probably posted about this before so it's probably old news?

 

Mermaid Waters on the Gold Coast, Got it at auction and paid fractionally less than what I was prepared to go to . It will become our PPOR in 18 months and our place in Sydney will become an IP.