What to do next!

Discussion in 'Investment Strategy' started by AaronA, 6th Mar, 2020.

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  1. AaronA

    AaronA Member

    Joined:
    11th Sep, 2019
    Posts:
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    Location:
    Melton, VIC
    Hey guys!

    I've been reading here for a while now and I've got some great info from a lot of you. Really enjoying following along a lot of your stories and taking in what might work for me one day!

    A little about me, I'm 26 and single. Still living at home in Melbourne and with no plans of moving out for the next few years at least. I have an investment property that I built in 2017 and I'm now looking at my next IP move. Open to any and all thoughts!

    I make between $60,000-$70,000 a year (closer to 70, regular OT going on 9 years)
    IP in Melbourne valued at $550,000 and rented at $390pw
    No credit cards or personal loans

    This IP has been really smooth for me with great tenants and no maintenance headaches at this stage. I'm thinking I'd like to build again for the depreciation benefits alone, but I'd love to hear your opinions on whether that's the right way to go about it or whether I should be looking for an established older house on a decent block.

    Really appreciate any help guys!

    Thanks!
     
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  2. AaronA

    AaronA Member

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    Location:
    Melton, VIC
    Can't find a way to edit, but I owe $305,000 on my IP currently.
     
  3. ORAC

    ORAC Well-Known Member

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    You've got off to a good start, achieved some equity and seem to have stable property. It is possible that you could re-draw equity (currently about 55% LVR) for another property but could be stretching yourself a bit thin with another deal. Wouldn't necessarily jump right out and stretch yourself at the moment. Consider to continue to save, pay down loan / store up in offset, maybe trickle into some other investments (ETFs etc), work on your career, if not done so some overseas vacation, and move out of your parents house. The concern is using equity to fund more debt, and not having sufficient "head-room" in additional income or savings if things don't go so smoothly.
     
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  4. AaronA

    AaronA Member

    Joined:
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    Location:
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    Thanks for the reply ORAC!

    It would be a bit tight if my overtime ever dried up (as I said above it hasn't changed at all in nearly 9 years, won't be there forever though)

    I've got about 45k in offsets at the moment and I feel I'm ready for something else seeing as I am still living with parents and have that security. I'm thinking I should take advantage of that while it's there?

    Really appreciate your response!!
     
  5. AaronA

    AaronA Member

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    Location:
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    Me again!

    Still have those same tenants in my original property and I feel as though I'm ready for a 2nd.

    Had my property valued at 580k with 290k owing. I've been looking at older walk up units around the beach but I just want to be making sure I'm making the best decision possible in terms of capital growth and being able to continue to purchase properties as the years go by.

    Any advice would be magic! Thanks!
     
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  6. craigc

    craigc Well-Known Member

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    Given you already have an IP in Vic (I assume from your location), given state gov stamp duty & land tax increases perhaps the next IP interstate might be a good consideration unless of course you were planning to built it yourself again.

    Good luck!
     
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  7. AaronA

    AaronA Member

    Joined:
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    Location:
    Melton, VIC
    Thanks for the response!

    I've been looking all over trying to find the best option for me and my situation. This next one is very important to me as I plan on at least 3 IPs in total. Guess I'll keep on the lookout for now.

    Thanks again!
     
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  8. Branden

    Branden Well-Known Member Premium Member

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    Location:
    Blacktown, NSW
    What are your goals and budget for the next purchase?
     
  9. AaronA

    AaronA Member

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    Location:
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    450k budget! Focusing on growth more so than positive cash flow at this point with the other IP looking after itself. Open to looking interstate if that ends up being the best way of going about it, especially avoiding a big land tax bill! Thanks for the reply
     
  10. Branden

    Branden Well-Known Member Premium Member

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    Location:
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    With 450k you would have quite a few options to purchase from. I would encourage you to look interstate as all investors should develop the mindset of becoming a "borderless" investor. In doing so, you don't limit yourself to one area or region and open up much more opportunities within your price range. You may want to consider looking into the Adelaide or Brisbane market as you would be able to pick up an established home on a decent land component (600sqm) in and around the city. Moreover, your search should focus on finding high-demand areas which will drive future short-term growth. Feel free to PM if you want any advice on where to start your search.
     
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  11. AaronA

    AaronA Member

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    Thanks! I had a look around Redcliffe and Clontarf areas a few years back but didn't have the confidence to pull the trigger at the time. Would love to hear what you have in mind regarding Adelaide and Brisbane though!
     
  12. Patrico1966

    Patrico1966 Well-Known Member

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    Building would take time and from what I know, builders are in short supply as are building materials
     
  13. Branden

    Branden Well-Known Member Premium Member

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    Location:
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    I would have been happy to invest in pockets of the Redcliffe area, I was also looking there a couple of years ago. If you are looking today a good start would be to look at suburbs around Taperoo and Para Hills in Adelaide or Moreton bay and Logan in Brisbane. Each area would have suburbs that fit your budget and currently have strong demand.
     
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  14. AaronA

    AaronA Member

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    Location:
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    I'll spend the next week or so looking through those areas! Thanks a lot!