Advice on my investment decision (3rd property)

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    • #21929 Reply
      AvatarPeteW

      Hi, Guys,

      New here. I downshifted from my Sydney pool home to a unit a year ago and bought two rental units nearby with the change. I’m ready for another, but wondering if I can expand faster with a loan. If I do, I think I should avoid Sydney because, looking at HtAG, all values are going down. Maybe I should go north – not walking towards the fires in Adelaide, that’s for sure.

      Anyone got any advise?

      • This topic was modified 3 weeks, 6 days ago by TerryTerry.
    • #21943 Reply
      AvatarAgentPam

      Hi, Pete, Welcome aboard!

      Don’t be put off Sydney. It’s true that sales prices are falling. That means that you’ll miss out on capital growth over the next couple of years, but this is just a correction and it won’t last forever. It sounds like that beautiful home you sold made you a lot of money. Like any market, property goes up and down, but unlike shares, you won’t loose your shirt. I was shocked to see the statistics for Northern Beaches in HtAG, but sure enough, when I went down to heatmap, I saw that there is stil price growth being registered in some areas, which is more like what I see every day. You’ve got to pick the right property. There’s no point in looking at Darwin or Townsville for rental investment because its going to be a real pain trying to organise maintenance, rental agents, and if your renters don’t pay, you’re in for a long-distance legal nightmare.

      Stick to the places you know and if you feel like venturing further afield, just go within driving distance. Come up to the Northern Beaches! I can find you a beaut buy-to-let.

    • #21945 Reply
      AvatarBankOnMe

      Hello, PeteW,

      I’d like to join AgentPam in extending a welcome to you and I would like to introduce myself. I am a loan manager for a major bank (I’m sure they won’t accept this post if I name it). I’m very interested in your post because you already have two rental properties and you are looking to buy a third or maybe two more.

      Your situation is very notable for a loan manager like myself. I’m assuming that you have a mortgage on your own home and you paid cash for the two units you bought to rent out. You are in a very good position, which you might not realise. With the proper advice you can ramp up to become a very serious professional property investor. I would certainly like to help you with that and you can PM me so we can work on this.

      Lending institutions don’t like people using residential mortgages for investment properties. A typical mortgage that gets advertised on TV is only for people who want to live in the property that they get the mortgage on. Mortgage availability goes on your income and the rental income doesn’t count until you have three properties. Once you reach that point, you need to divide your property activities. The mortgage you have on the unit you live in goes on the income from your job. The rental income from your other properties counts as a standalone income and then you go for buy-to-let mortgages, admitting that you will be renting out the property.

      Now you have a great chance here because most lenders will count your next property as though you already own it. So you can get buy-to let mortgages on your new property and also release equity on the existing two. It’s just a matter of presenting an investment plan with the expected rent from your new property and the proven rent from your current two. Buy four more all with a mortgage using the equity you get out of your existing rent as your deposit.

    • #21950 Reply
      AvatarMrsMalk

      Hello there, Pete,

      I just want to put in my two penneth worth on this one. I have built up a large investment in rental properties and what BankOnMe says is true. The first two are the hardest after that it becomes so easy. Pam is right as well. Don’t spread your purchases all over the country. Stick with your area.

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