What is the worst negative cash flow position you have been in with your IPs?

I will definitely keep this in mind! Although $48k is way more than I ever intend to go.

If I do end up $10-$15k negative with this first IP, IP #2 will have to be closer to neutral. I get where you are all coming from now.I think.

 

The point is, that things can (and do) change. Just take a look at what APRA has done with investor loans recently. OK, it's not a huge amount, but that is something new that wasn't even on the horizon a year ago. Anything can happen to change your situation. You are planing on going into a very negative geared investment with an income that isn't all that large, in the lowest interest rate environment Australia has ever seen. Interest rates WILL go up! When, and by how much is anyone's guess, but they won't stay this low forever, so what starts out as potentially $15k neg, could easily blow out.

 

It's expensive because it's overpriced, just like Sydney is at the moment and hence buying there now is a bad investment

 

This, I don't believe now in the cycle is the time to take risks with negative cash flow. Economic outlook uncertain, interest rates at lowest level with only direction up and what I see in many parts capital growth already peaking in the short to mid term.

 

I did a quick check on the suburbs for two of my properties for the five year growth from this site

http://www.realestateview.com.au/po...te=nsw&webservice=suburbprofile&startletter=N

North St Marys median grew from $264K to $474K or 79%.

North Ryde median grew from $775K to $1,389K or 79%.

I think a lot of more expensive areas (eg Inner West) have also performed really well.

I think Western Sydney went first with the boom but a lot of other areas have now caught up and done just as well - almost any strategy would have worked equally as well over the last 5 years.

 

Exactly! There are many things happening right now that haven't happened before or not for a very long time.

I'm personally quite surprised people aren't taking APRA's moves more seriously. They didn't get out of bed one morning and decide to stomp on some investors on a whim. They have access to data that the general public doesn't. My feeling is that some informed people are terrified.

This data is only showing up in muted echoes. Banks requiring higher deposits for certain postcodes for example. Banks haven't made this sort of move for years but sometimes it feels like it gets brushed off a little.

I don't know, maybe the people who are pulling back and assessing aren't talking much about it. Maybe people do take it very seriously and are making appropriate moves. It's hard on a property investment forum to talk doubts or assess negative macro changes. Certain forms of property investment (I/O loan, revalue, borrow on back of capital, wait for more capital gain, negative gear) only exist because of a particular set of circumstances (tax laws, formerly easy credit, etc). We've all seen how it can change quickly once a regulator starts moving.

 

Do you need to be registered or a paying user to get the free suburb report? I can only see TAS and VIC as an option, not NSW.

 

This is a great snap shot of the overall Sydney market in the last 5 years. You could drop a pin anywhere..

You could buy the 1 x 775K or buy 3 x 264K and arriving at the same growth in a rising- boom market. You can weigh out the differences such as buying cost, single- multiple tenants, yields, diversify etc..

Wondering I could see the same situation in Brisbane, say 3 x Logan versus 1 x Morningside in the next 3 years...

 

I was only working with the median price tab which was available for NSW - I'm not a registered user.

 

No worries, thanks @Tonibell
I'll have another fiddle around.

 

Our first two IP's.

I bought our first two on the same day; settlements were almost the same day. All borrowed funds.

1. Brand new 4x2 townhouse for $395k and supposed to rent for $450p/w - took almost 3 months to get a tenant and had to take a drop of $100p/w $350p/w),
2. Older 2x1 unit in complex of 12. paid $206K.
Gained early access before settlement (Nanna moved out to aged care village). Spent approx 3 months on the reno and $25k. Rent was $210p/w and didn't move for 2 years.

Welcome to the world of IP's!!