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I have around 400K to invest and want a decent rental income soon

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Psalmdawg | 13 Oct 2013, 06:22 PM Agree 0
I am fortunate enough to have a large chunk of equity and a decent earning job. I am working in mining with a salary around 100k a year, and have about 400k to invest.
I need to some advice as to how to proceed.
My strategy is to remain renting my own accomodation for the forseeable future.. borrow around 600k and invest in 3 to 4 high return (7%) properties and pay them off (with extra payments from my salary) as fast as possible. possibly around 4k a month extra repayment. then in 5-8 years.. i reckon I could be earning aroun 60k year from $1mill in property owned out right.

Is it this simple or have I missed something?

I would appreciate any comments on this strategy

  • Eos Property | 13 Oct 2013, 10:44 PM Agree 0
    Make sure you also consider growth potential in your deliberations - while your aggressive repayment program will help you realise additional equity you will still need growth too. Gaining wealth through property requires both growth and cashflow - the exact nature of your circumstances dictates which you need more of.

    I would also suggest you would be better off placing surplus income into an offset account as this will help you retain flexibility over your funds. This will be a handy safety buffer to have just in case your world turns pear shaped. Placing funds in an offset account means you, in effect, create a similar effect to having paid off your loan.

  • John | 14 Oct 2013, 03:31 PM Agree 0
    I agree with EOS. Also I feel you can do much better by implementing a combination of strategies which could help you realize your goals much soon. Eg. You may be able to borrow more and obtain a return higher then 7% in some fairly long established mining towns which aren't going anywhere in the short term. If you are interested in discussing call me on 0415444024 and I will be happy to assist you.

    Nafiz (John)
  • Laurence Duggan | 31 Oct 2013, 05:42 PM Agree 0
    You're in a good position and the key is to maximise that equity, and your income, to build a strong portfolio to get you where you want to go. We help people do just that (the education part is FREE) then source properties suitable to your plan. Call me on 0455 847 413 Cheers Laurence
  • investment property | 08 Jan 2014, 10:27 PM Agree 0
    If you are looking for best plan to invest your income with real estate listings it must important for you to take proper guideline for further consultant to achieve maximize the equity and your income too.
  • Mark Coburn | 03 Mar 2014, 04:02 PM Agree 0
    You are in a great position to do real well, take your time and don't rush. If you buy a dud in any one of your first 3 investments properties it could take 5-10 years to recover. Watch who you get your advice from; real estate agents, marketing companies and brokers are all being paid by the seller, you need to know who your advisor is getting paid by, always.
    Buy for a balance of yield, growth and tax credits. They work really well together and far less well when you leave one of them out. I hope this helps.
    Mark Coburn
    Stepping Stone: Buyer's Agents & Property Investment Advisors
    m: 0405 243 547 e:
  • Bruce | 03 Mar 2014, 06:07 PM Agree 0
    When you think about you have to deal with doggy tenants week by week, your faith of investment will gone. Even real estate agent would make a mistake to recruit wrong people in, then your nightmare begins!
  • Jean | 25 Mar 2014, 09:34 PM Agree 0
    Hi, was just thinking, your calculation of paying the whole of your mortgage in max 8 years - have u taken interest costs into account? It may be longer than that..

    And with an annual salary of 100k a year, can u afford to aside approx. 6k a month or 72k a year as mortgage payments?
  • Sambhabana Roy | 28 Mar 2014, 10:39 PM Agree 0
    Its not that can afford a new house but for rent you have to run. If it would have been in India then i would have given you some contacts to help you.
  • Max Pisano | 04 Apr 2014, 08:26 PM Agree 0
    My suggestion would be to look at investing in established growth areas with a history of solid and consistent capital growth. 7% rental yield comes at the sacrifice of growth. It may be worth considering a property that gives you good tax benefits (no doubt your paying enough of it) especially on new property and balanced with good capital growth. I'd be happy to elaborate further, you can connect with me at Max Pisano Real Estate
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