To buy first IP or …. not to buy!!!!? The decision to buy was not that difficult. After reading few books, attending few seminars and having done the financial plan we decided to buy IP as we thought there is more for then against having the IP. Surprise, surprise! reading and doing is a different matter. When you read stories everything is so easy: Find property, go to the bank and borrow money, find the tenant and voila you are a property investor!!!! You think it is easy. You are wrong. It is not that easy. 1.Finding the good quality property That was easy. Plenty around to choose from. We decided on sunny Brisbane. Not much to say here. Selected the property and signed the contract. That’s it. 2.Going to the bank and borrowing money It took us 4 months to refinance and restructure current home loan. At the end we had 2 LOCs. One for a PPOR and second for IP and other investments. At the same time applied for an investment house loan and approved. Great!! After selecting IP we go to the bank again (I am using the mortgage broker) to get the previously approved investment home loan and then it started!!!! Missing applications, not enough information, each week another problem. Second application missing, our investment house contract was never received by the bank. We heard many different excuses through our mortgage broker. For few weeks we were going back a forward with the same issues. Finally on the last day as per IP contract, some success (bank manager came back from holiday I guess!) after faxing the same paperwork to the bank again, to our surprise loan was approved (this process took another 2 months) but LOC for IP was reduced by 30K. Why? We had no time to ask!!! (in the meantime my wife changed a job and got higher income). Now the question is where to find 30K??? but this is not bank’s problem. My problem is that I am stretched to the limit and have no buffer at all. 3.Finding the tenant Settlement of our IP took place on 05.12.2005 (brand new house in sunny Brisbane). I knew that it was not going to be easy to find tenant before Christmas. But my PM managed to collect four applications. Great job. Selected one (they had a dog, but what a hack… agreed). Tenants moving in just after New Year. Hurray!!! The day after New Year …. Guess what happened..!!! Tenant suddenly pulled out of the deal. Another one paid a deposit and pulled out of the deal few days later, and the other 2 disappeared!! Well, back to the drawing board. PM looking for another tenant. We start thinking that somebody put spell on us or our IP? PM was probably more shocked than us, what a damned house!!! Around one week later PM found another tenant but …. Guess what ?? … This couple has only 6 children but no dogs and no pink elephants either (what a pity = I like pink elephants). Cutting long story short… BIG Family moved in last Friday…signing contract for 12 months. So far so good I said to may wife…We are back in business….Are we ???. Guess what happened next…? Today PM called us that the tenant is complaining as there is no hot water in the house for the last 4 days (since they moved in). Remember this is a brand new house never lived in and inspected by builder, us and building inspector!! Nobody had a shower before so we did not know that there is no hot water. We all expected the hot water to be there. What next? We do not know. Could the more experienced property owners tell us if this is it, or it will go like this forever or can be worse???? If so, who wants to guess whether we buy the next IP or not? If you guess correctly I will tell you which bank was stuffing me around!!!!! But you may already know. Builder promised to send somebody tomorrow to check what might be wrong with the brand new hot water system. I would be not surprised if the water system is stuffed, or somebody has stolen it or cold water is connected to the hot water, so the whole house may require new plumbing. On the other hand, I do not know what to think about those tenants, because being in their shoes (without hot water) I would get mad and burn down the whole house. I would like to know what is wrong with this house or what kind of surprises are waiting for us around the corner. 4.Being a property investor It is not fun so far because I still have to pay an interest on loans, I have no income from rent, and I have to pay council and insurance no matter what. Next time I will think few times before I acquire next IP. I wish all the best to all of you brave people willing to buy new houses, old houses or trying to renovate run down houses. My case may not be common one, but it is proving to me, that trading is 100% less stressful than investing in IP. But wait… I hear you are saying Leverage……. My question is: How long and to which extent can you ignore inconvenience and problems to make leverage worthwhile??