My 3 year plan - Buy in rising market - Build up cash savings buffer

Yep. I'll wait a few more years before investing in Perth again. Time the market this time around. Perth is due for a rise soon. 2-3 years time or so

When I do go to buy again I'd be hoping I'll have a bit of equity built up from the early stage of Perths recovery from my two properties. I'm reluctant to use my own cash for deposit money but if I need to use some of it then I will, but not too much as I'm wanting a buffer. I'll play it by ear.

 

Sounds like the right idea. Just need to position your investments correctly, "catch that wave" and boom! You'll be well on your way.

 

I've got a couple of problems with the plan that @Alex P Keaton posted.

• I believe that the whole BMV thing is oversold, and there's an opinion it's a myth. If a property selling at a discount, then there are likely to be problems, and the buyer can make a profit by resolving these, or the vendor is desperate.
• Can you identify a rising market before it booms? There are arguments on this forum as to whether Sydney will continue to rise or crash. And how did it turn out for those who bought into mining towns a few years back?

My suggestion would be simpler:

1. Switch your units over to a P&I mortgage. By retirement, you'll have paid them off.
2. If you're struggling to hold the portfolio (and money sounds tight), then consider selling one off to lower debt. You can always pick up another down the road.
3. Renovate your properties if they're looking a bit tatty, to increase their value and rents.
4. Look at picking up additional properties when you can afford them. I'd consider buying in Perth because you can manage them, rather than being dependent on managers.

 

I think @Graeme brings up a few valid points that have been suggested over and over on this thread.

I would personally concider selling off one of non performing assets. Whichever I think will perform the worse out of three in the long run.

This will provide buffer for any unexpected outgoings and provide a peace of mind.

 

Thanks for the replies.

I've taken my unit off the market as I'm not prepared to sell at fire sale prices. I'll try again September 2019. Hopefully the Perth market has recovered a bit by then and I'll get a reasonable amount. Hopefully I won't be under too much financial stress in the meantime.

 

MTR, by volume shrinks, do you mean volume of stock or volume of sales? Volume of sales often increases strongly as prices boom.. better prices encouraging more sellers. Stock would hopefully do the opposite, although more stock may come on the market in the early stages of growth?

 

The only one that matters is volume stock