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Hi guys,
Please bear with me. Due to the current Covid-19 circumstances, I recently stumbled across this forum (cheers Covid). I’m not looking for a hand-out, but some advice, information & educating would be greatly appreciated.
Shoutout to “Jaffa” for directing me to “Rich dad Poor dad”, Robert Kiyosaki which then introduced me to Ken McElroy & various other investors.
As I enter the rabbit hole, I feel enlightened by the fraction of knowledge I have already gained, but concerned that I won’t be able to be content with how I was previously living my life (living to work). Now I’m not suggesting that I’ll ever have financial freedom, but at least moving in the right direction would some what scratch the itch.
As you can tell, property investing is very new to me, I have a lot to learn.
Here’s a quick introduction of the passed few months until now, on how I ended up writing this wall of text.
- Started looking into building in a new subdivision.
- Planned to sell our current property & build.
- Decided to keep our property as a rental & build.
- Found a section, signed an S&P agreement.
- Was in the process of coming to a build design, which was very close.
- Covid-19 arrives.
- Lockdown begins.
- Reconsider our options, regarding building or buying off the market.
- Start looking into owning multiple rental properties.
- Come across this forum. Start trying to educate myself by reading books, articles, listen to audiobooks etc.
- Write this post.
So with that being said, the goal would now be to make some smart financial decisions & begin with a second property, while also leaving the door ajar to eventually purchase a third.
I’ve been liaising with a broker, we haven’t been pre-approved but he’s said we’d have borrowing power of around about $630,000 whilst keeping our current 2-bedroom property as a rental.
Figures regarding our current mortgage & property;
Property value: $410,000-$420,000 (approx, we haven’t had it professionally valued).
Mortgage: $240,000
We’ve maximised our repayments to $1,900 per month to knock down the principle & gain more equity as quickly as possible.
I understand we can borrow against the equity we have.
- Would that mean we have $170,000 equity?
- What % of that could be put down as a deposit?
- Would the amount of equity used come off the loan amount required?
E.g.
Property: $400,000
Equity: $100,000
Loan required: $300,000?
I understand starting small would probably be the best decision. I’ve read equity over rent in good, so investing in a lower quality property where you can own more equity would be the way to go? Especially if wanting to continue the ability to invest?
We live in the Nelson region, I don’t expect anyone to know much about the areas or the property market in this location.
Ideally we would upsize from a 2 bedroom to a 3, and use the 2 bedroom as our first rental.
With borrowing power of approx $630,000 if we look for a property in the region of approx $400,000-$450,000 providing the rental is making positive cash flow (and property value hasn’t dropped) would that price range keep the door ajar for future investments as we wouldn’t have completely capped out our borrowing power?
I understand there is a lot of questions in this wall of text, positive or negative I’d really appreciate any feedback, this is new to me but I will put in the time & learn as best I can.
Thanks to all who take the time to read & possibly comment.
I will have more questions down the track but for now I’ll leave it at that.
Cheers! Take it easy
Please bear with me. Due to the current Covid-19 circumstances, I recently stumbled across this forum (cheers Covid). I’m not looking for a hand-out, but some advice, information & educating would be greatly appreciated.
Shoutout to “Jaffa” for directing me to “Rich dad Poor dad”, Robert Kiyosaki which then introduced me to Ken McElroy & various other investors.
As I enter the rabbit hole, I feel enlightened by the fraction of knowledge I have already gained, but concerned that I won’t be able to be content with how I was previously living my life (living to work). Now I’m not suggesting that I’ll ever have financial freedom, but at least moving in the right direction would some what scratch the itch.
As you can tell, property investing is very new to me, I have a lot to learn.
Here’s a quick introduction of the passed few months until now, on how I ended up writing this wall of text.
- Started looking into building in a new subdivision.
- Planned to sell our current property & build.
- Decided to keep our property as a rental & build.
- Found a section, signed an S&P agreement.
- Was in the process of coming to a build design, which was very close.
- Covid-19 arrives.
- Lockdown begins.
- Reconsider our options, regarding building or buying off the market.
- Start looking into owning multiple rental properties.
- Come across this forum. Start trying to educate myself by reading books, articles, listen to audiobooks etc.
- Write this post.
So with that being said, the goal would now be to make some smart financial decisions & begin with a second property, while also leaving the door ajar to eventually purchase a third.
I’ve been liaising with a broker, we haven’t been pre-approved but he’s said we’d have borrowing power of around about $630,000 whilst keeping our current 2-bedroom property as a rental.
Figures regarding our current mortgage & property;
Property value: $410,000-$420,000 (approx, we haven’t had it professionally valued).
Mortgage: $240,000
We’ve maximised our repayments to $1,900 per month to knock down the principle & gain more equity as quickly as possible.
I understand we can borrow against the equity we have.
- Would that mean we have $170,000 equity?
- What % of that could be put down as a deposit?
- Would the amount of equity used come off the loan amount required?
E.g.
Property: $400,000
Equity: $100,000
Loan required: $300,000?
I understand starting small would probably be the best decision. I’ve read equity over rent in good, so investing in a lower quality property where you can own more equity would be the way to go? Especially if wanting to continue the ability to invest?
We live in the Nelson region, I don’t expect anyone to know much about the areas or the property market in this location.
Ideally we would upsize from a 2 bedroom to a 3, and use the 2 bedroom as our first rental.
With borrowing power of approx $630,000 if we look for a property in the region of approx $400,000-$450,000 providing the rental is making positive cash flow (and property value hasn’t dropped) would that price range keep the door ajar for future investments as we wouldn’t have completely capped out our borrowing power?
I understand there is a lot of questions in this wall of text, positive or negative I’d really appreciate any feedback, this is new to me but I will put in the time & learn as best I can.
Thanks to all who take the time to read & possibly comment.
I will have more questions down the track but for now I’ll leave it at that.
Cheers! Take it easy
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