Like everything else, first time is always the most difficult but once the mindset got over the hump then nothing will be able to stop you.
To be honest I was quite concerned initially about having a mortgage debt and what I should do with it. But since settlement all I’m seeing is just transactions every month – the rent comes in, and then loan interest goes out. The rent covers majority of what was going out, so each month I didn’t have to fork out much to hold the property!
So I got more comfortable and thought this is a good strategy to move forward with. Buy with good yields so that rent will cover majority of the outgoing whilst I keep saving up. And then just rinse and repeat!
Having that thought I started saving up for my second property. Luckily I was living at home which is really the best way to save up with minimal expenses! But it still took me a good 2 years of tightening my belt before I was ready to jump in again in 2013.
At that time I was in a stable relationship with my girlfriend who was living in Canberra. I was really keen to get her to move to Sydney so that we can stop the long distance commute and my fortnightly visits to Canberra!
And that’s the reason behind getting property #2 – I wanted to buy a place so that my girlfriend and I can live in instead of having to rent. So the purchase criteria were quite different to pure investment in which I would solely focus on numbers & yields.
In search of the next property…
As my parents were living in the upper North Shore so we were focusing on the upper North Shore with units close to train lines. My budget was about 400K and I was hoping to get a 2 bed unit close to amenities and public transport. For a consecutive 3 months I have looked all the way from Chatswood to Hornsby….for those of you who have been hunting for properties in Sydney would have agreed with me – it certainly wasn’t a fun process!
Chatswood was already pretty expensive then – I had to stretch my budget up to about 500K but still couldn’t get anything decent. There were older 2 storey walk-up units on Pacific Highway which I could fit for close to 500K and about 700m to Chatswood station. But it was really small and noisy (balcony is facing Pacific Highway) so I didn’t get it in the end ?
Clearly if I want a quality unit within my budget I had to keep going up North, and so I did – Gordon, Pymble, Turrumurra…until I hit Waitara/Hornsby which fits my budget range more. Even though Waitara had nicer, newer units, I preferred Hornsby because it’s a major train interchange between North Shore and Northern Line. In case my girlfriend found a job in Parramatta once she moves over she could also commute via train. And for me, commuting time to North Sydney is reasonable too.
So my search criteria narrowed down even further – 2 bedroom units around Hornsby station, within the 400K budget.
Boy I had to say 2013 was the start of the year when Sydney properties starting to heat up! Back at that time I can already see heaps of people queuing up at every open home with lots of competitions. Units advertising around 400K would end up selling about 410K and there was certainly pressure to push the prices up and I can clearly feel that!! Hornsby is my last chance to be able to get a unit on the North Shore line so better jump in now!
So like others I started putting in offers and attending auctions. I can’t remember the exact number of offers I’ve submitted back then, but all I can recall was the feeling of helplessness each time as I called up the agent only to found out I got priced out once again!
Did that feeling stopped me though? No! I kept going because I know I need to be in the game to win it, and I won’t stop until I got my next property! That urge was critical to how I got to my second property in Hornsby.
Nothing beats the feeling of victory
So here’s how I got my property #2:
– Visited the first open home on Saturday (along with a bunch of others)
– Visual inspection and requested contract from agent during the open home (this is important especially in a hot market)
– Received and reviewed contract on Saturday afternoon, ensuring nothing is out of ordinary (when you’ve read enough contracts you can be very efficient about this ;))
– Put through my offer on Saturday night via email
– On Monday afternoon got a call from the agent. I was up against 3 other offers, but none of them were willing to increase their offer and I was the first one who put through the offer (on Saturday night) so I’ve got the property!
Just like a clockwork and I needed to act fast in a hot market! And I’m glad I did, because that feeling cannot be explained by any words!!
Our open kitchen which flows to dining and lounge ?
Since settlement in June 2013, I’ve had the property rented out for one year before my girlfriend and I moved in. Now it’s our home sweet home yet so close to the station (300m!) and everything and we’re still loving it ?
Once we move out to a bigger PPOR we will keep this as an IP as we don’t see an issue getting it rent out due to it’s location. To-date it has also done fantastic in terms of capital growth so definitely one of my best performers in my portfolio.
In summary, purchase details for Property #2 – Hornsby:
Purchase Price: $439,000 (June 2013)
Revalued Price: $620,000 (August 2015)
Capital Growth: 41.2%
Years hold: ~2 years
Average CG per year: ~20.6% (thanks to the Sydney wave!)
Configuration: 2 Bed / 1 Bath / 1 lock up garage in a 3 level walk-up strata block
Thanks to our two Sydney properties which have had good growth over the years and laid the solid foundation for us to be able to further develop into a property portfolio today. If you have any further questions in relation to how I purchased this property or like to know any further details, simply reply in the comments section or drop me a message in the Contact form!
Next stop – QLD!