Craig works as a Brand Manager at Lion Dairy and Drinks and I recently worked with him to gain pre approval for the purchase of his second investment property.
I asked him if he could share his experiences with investing in property.
Tell us a bit about your first investment property?
I purchased my first investment property in June 2014 in Frankston for $361k. Since then the property has been rented out to a reliable tenant and giving me regular cash flow.
The property is negatively geared but the shortfall is only around $100 per week (less after tax!) and I’m hoping 5 years down the track it’ll be paying for itself.
Since I bought the property I’d estimate it’s gone up in value by $30-40k, Frankston had a great growth spurt in the first quarter of this year.
Tell us about why you are looking at a second investment property?
I see property as a great vehicle for wealth creation. It has potentially great returns for (relatively) low risk. You just need to choose well and do your research!
This time the circumstances are a bit different as I’m looking to find a property that is in need of renovation and I’m planning to do the renovation myself.
I’m looking at older houses that I can modernise and add value to which I’ll either sell or rent.
How did you choose the type of investment property and the suburb it’s in?
I’d read a lot about Frankston being a potential future hotspot and the median value is still quite low, so it’s affordable to buy into. There is a bit of a stigma around the suburb but it’s slowly gentrifying, the local council is pouring money into infrastructure and of course it’s beachside!
I’m looking at buying my second property in Reservoir as it’s an area that’s growing in value and one where older style houses that are renovated are in demand and fetching a premium to those that aren’t renovated.
My preference is to buy houses with a land component which in the long run will appreciate in value and can give you options down the track to subdivide / develop.
Do you have any advice for other property investors?
Be careful about fixed rates! I fixed my rates in for 3 years at 5.14% with Bankwest. At the time it was a great deal and it gave me certainty over repayments, but it has reduced my flexibility to change and of course rates have gone down.
In all seriousness though, investing in property has has worked really well for me so far and I’m looking to build my portfolio slowly over time. But how bigger portfolio only time will tell!
I guess though it depends on your particular circumstances, but of course you need to take action to start building wealth and not get in the trap of suffering from analysis paralysis!
A big thanks to Craig for sharing his experiences.
Interested in Property Investing and want to discuss finance?
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