It's time to buy IP#1. I'd love some input on my strategy, and how I may best accelerate the growth of my portfolio from day 1. Essentially, I want to be in a position to buy IP#2, #3 etc as soon after the first as possible. Whether that's by buying cheap CF+ properties, renovating for equity or something else.
Income:
-
- $2000+ bonus/other
- $1000+ airbnb
PPOR:
- $245,000 owing
- Fixed @ 8.09% for 12.5 more years (I know, I know)
- $10,000 a year extra repayment max (which I am meeting, but doing so eats the majority of my surplus cash annually)
- Experiencing good growth at present, 5-7% last 12 months. Likely to continue.
Finance:
- $60,000 equity pulled from PPOR for deposit/holdings
- ~$350,000 further borrowing capacity
Retirement:
- Want to have option to retire on no less than $50,000 in today's dollars, within 12 years, with an appreciating asset base
My basic plan is to first buy a couple of cashflow positive properties. NRAS for #1 (CF+ ~$5000+) and, if I make it before the scheme is over, NRAS for #2. This consistent surplus cashflow can then assist in deposit/holding costs for neutral or negatively geared/higher risk properties in which I chase CG.
I'll extract any available equity from PPOR and NRAS to help with additional purchases.
So, that's the plan. Get some CF+ properties first to help service future CF-, higher growth properties.
Is this strategy reasonable? What are potential pitfalls/risks? What are the pros? Will I hit serviceability walls? What have I missed? Alternative ideas to progress quicker?
Other options I've considered:
- Buy 2 x places under $175,000 immediately ?€“ non-NRAS, but high yield, expecting CG.
- Limit IP#1 budget to ~$250,000 ?€“ non-NRAS, but high yield, leaving $100,000 spare to allow me to grab IP#2 sooner
- Seek out "worst house on best street" for under $300,000, dip into the $50,000 to renovate (I have no reno skills myself, yet), attain higher yield and manufacture equity for another deposit. Repeat.
To further push things along, I will consider moving out of PPOR (instant IP!) into a very similar rental. That's over $6k of interest I can then deduct annually. Minus moving costs etc, should still be at least a few extra grand in my pocket.
So, I've love some input on the best way to accelerate things along.
One last note, during this process I'll be spreading some of my cash into other asset classes (index funds etc) though property is very likely to remain predominant. I know this will slow my property investing a little.
Thanks.
Income:
-
- $2000+ bonus/other
- $1000+ airbnb
PPOR:
- $245,000 owing
- Fixed @ 8.09% for 12.5 more years (I know, I know)
- $10,000 a year extra repayment max (which I am meeting, but doing so eats the majority of my surplus cash annually)
- Experiencing good growth at present, 5-7% last 12 months. Likely to continue.
Finance:
- $60,000 equity pulled from PPOR for deposit/holdings
- ~$350,000 further borrowing capacity
Retirement:
- Want to have option to retire on no less than $50,000 in today's dollars, within 12 years, with an appreciating asset base
My basic plan is to first buy a couple of cashflow positive properties. NRAS for #1 (CF+ ~$5000+) and, if I make it before the scheme is over, NRAS for #2. This consistent surplus cashflow can then assist in deposit/holding costs for neutral or negatively geared/higher risk properties in which I chase CG.
I'll extract any available equity from PPOR and NRAS to help with additional purchases.
So, that's the plan. Get some CF+ properties first to help service future CF-, higher growth properties.
Is this strategy reasonable? What are potential pitfalls/risks? What are the pros? Will I hit serviceability walls? What have I missed? Alternative ideas to progress quicker?
Other options I've considered:
- Buy 2 x places under $175,000 immediately ?€“ non-NRAS, but high yield, expecting CG.
- Limit IP#1 budget to ~$250,000 ?€“ non-NRAS, but high yield, leaving $100,000 spare to allow me to grab IP#2 sooner
- Seek out "worst house on best street" for under $300,000, dip into the $50,000 to renovate (I have no reno skills myself, yet), attain higher yield and manufacture equity for another deposit. Repeat.
To further push things along, I will consider moving out of PPOR (instant IP!) into a very similar rental. That's over $6k of interest I can then deduct annually. Minus moving costs etc, should still be at least a few extra grand in my pocket.
So, I've love some input on the best way to accelerate things along.
One last note, during this process I'll be spreading some of my cash into other asset classes (index funds etc) though property is very likely to remain predominant. I know this will slow my property investing a little.
Thanks.
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