How to start an investment portfolio with 700K?

There are several spreadsheets out there. The calculations are

Income - Rent per year

Minus Expenses

Mortgage repayments
Council & water rates
Strata (if applicable)
Insurance
Property Management Fees
Estimated maintenance and repairs

Then just work out the net to give you the annual cashflow. Generally pending the location, you need between 6.5-7% to be neutral. By neutral I mean income equals expenses.

Hope this helps,
Michael

 

Yes, your own home is an asset and there's nothing wrong with buying your own place it you can afford to

The key here is the opportunity cost it may incur.

Having non-deductible debt (e.g. on your own place) will reduce your borrowing capacity considerably more than having the same amount of deductible debt (e.g. investment). So not buying your own place might cost you a bit of rent every week (keep in mind as a renter you don't pay council rates, repairs/maintenance/strata etc) but allow you to buy an extra investment or three which over the long run, has the potential to increase your wealth orders of magnitude over what you might save by not having to pay rent.

Further, in terms of asset selection, odds are good that where you want to live is probably not the same suburb or type of property you would invest in for maximum capital growth.

It's just a matter of looking at the implications and being comfortable with the outcome of your decision, whatever it its.

 

It's pretty easy to find cashflow positive properties, but it depends on what you want out of it. Will you be happy to have money leftover to live off after the mortgage repayments, even if you knew the property wouldn't increase in value for the next 10 years? You can make money on regional properties, but you really need to know what you're doing and be familiar with the area, and how it has performed historically. If it's recently gone up a lot, it's possible it could be stagnant for a while.
A mixed portfolio of regional cashflow positive properties and well positioned capital city properties could be a good way to go depending on what you're after.

 

Personally I think the whole chasing 'cash flow positive' properties is a bit over rated, unless you are buying 'cash flow positive, high chance CG potential" properties, and not a 10+ years waiting potential either. or the yields are really spectacular which makes it worth while. But that's just my opinion only.