Hi there
I’m about to buy my first property (PPOR )and I want to get it right so that I can build equity ASAP for investment properties. [biggrin]
I’m looking to spend up to $475,000. My preferred places to buy would be city fringe/eastern suburbs/northern beaches/north shore and inner west…..probably not other areas in Sydney unless someone can convince me it really is worthwhile financially due to their capital growth prospects. My plan is to buy something that I can add value to, as well as benefiting from the capital growth.
Can anyone advise how I can find reliable figures that will help determine the next growth areas? [blink]
Also, if you have any feedback or tips on my stratetgy (of buying in a high growth area and adding value), I would love to hear them.
I am a complete novice in this and am happy to take on a project where I can add value without it being too hard! My ideal would be a terrace in Ultimo/Pyrmont/Darlinghurst etc type areas – something liveable but but I can still make it look fab.
I would love feedback on my strategy and good suburbs!!!
All responses are most welcome! Thank you. [thumbsup2]
Hi
You won’t find any reliable figures for future growth until it happens!
Have a read of Peter Spann’s book, he outlines his research methods there. He basically looks for a suburb that has had consistant grwowth and hopes the consistancy is consistant!
Terryw
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Thanks Terry.
What is the title of the book? I will check it out.
Does anyone at all have any feedback on ‘my strategy’???
I’m currently hoping to buy a little terrace in the city fringe that I can do up. Surely soemone has an opinion on this as whether or not it’s a good way to go to build equity fast??!!! [worried]
“How You Could Build A $10 Million Property Portfolio In Just 10 Years” by Peter Spann
http://www.dymocks.com.au/Search/Search.asp?Author=Peter%20Spann
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
hi Sanctuary
your idea is relatively good.
the best way to find out about a suburb is to talk to a real estate that you know very well and then get access to a rp data residex etc and the reverse check the growth for the last 5 years this gives a good historic growth for that street or area and that is a god bench mark.
buying a house and adding another storey is a good idea but you do need to amke sure youa re not over capitalising in that area.so it is not all up up and away.
there are lots of other ways of using 475k so be very carefull how and where you place your investments.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]if it was me id be buying a property with big enough land to subdivide and live in the front double story house while building a unit behind it, not sure if you can find the oppotunity in the areas you mentioned but i know thats the path i would take.
“It’s not how much money you make, It’s how you spend it that matters.”
Aspiring property developer
Giulio Taranto
Jeez, you guys have been good to respond – thanks!
My challenge is that I will need a 100% mortgage. After many years of hard work, I finally have a good income but nothing saved (yet), hence the 100% loan. I am also self-employed which means that I am limited as to where I can go to get a home loan. My last year’s figures are good, but previous to that they are not. I have discovered that not many lenders will only look at the last year’s figures, as opposed to taking an average of two years. St George seems to be a good option for me.
I presume that would limit my options????
If anyone can shed further light on this and re-affirm that I could buy-and-build or buy-and-subdivide, even with a loan on this basis, that would be so helpful……or even buy-and-renovate.
Are there any mortgage brokers out there that would like to clarify this???
Many thanks! [biggrin]
Hello Sanctuary, I have read the responses so far and the upbeat language of those responses will make my advice somewhat dull.
Your enthusiasm is a great asset to you, but you must ask yourself at present ‘what can I afford’?
If you can COMFORTABLY afford the repayments of 475g at current interest rates, calculate an additional 2% IR into the mix. Property I feel is reaching very low levels of affordability for the average joe and remember the country consists mostly of average joe’s.
I cannot see property prices rising for quite a while yet on average but ofcourse there are always areas that will buck the trend. If there was a website or book that accurately predicted the next boom area I would love to know what they are.
I think it comes down to research, education and due dilligence on an investors part to minimise risks and maximise profits.
To find significant capital growth in the areas you have mentioned, by either subdividing or renovating would be an enviable feat and I would take my hat of to you.
Do your maths on renting out your investment property and renting yourself, If your business allows you to work outside the CBD why dont you move out to the burbs for a while, that would increase your cashflow.
As far as finance is concerned, you will probably have to show consistent savings for 12months and demostrate to the financer how your business will continue to make money.
Ultimately, if you can comfortably afford repayments over time you wont lose but finding quick capital gains may prove more difficult.
Chad.To answer your question, It all comes down to the numbers/income etc, and servicing on 100% can be a little more stringent,
as you are self employed lenders will need to look at your last two years financials.Talk to a mortgage broker and have them crunch the numbers to see if you do qualify for a 100% finance, if you don’t qualify there may possibly be other options… 95% low doc etc. good luck, Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
I think the book that prints the next growth areas for real estate is the same book that has next Monday’s lotto results.
Steve McKnight’s books are very good, I recommend them, Sanctuary. I learnt lots.
Best of luck with it.
Dale
dale are you from Freo (WA) ?
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator<<<If anyone can shed further light on this and re-affirm that I could buy-and-build or buy-and-subdivide, even with a loan on this basis, that would be so helpful……or even buy-and-renovate.>>>>
Pls be careful not to bite off more than you can chew. Read Steve’s books and also books by Jan Somers and Margaret Lomas before getting in too deep. The idea of doing a property development as your first entry into the Property market seems like running before you walk to me. For every marvellous stroy where it worked there are too many that have regretted it.
Go slowly my friend, increase your knowledge and make decisions based on real figures you work out, not on hype and emotion.
JB
Sanctuary, the Inner West has been good to me. Annandale is my favourite suburb, but $475K may not get you much there. Don’t forget, if you’re looking for a ‘renovator’s delight’, you’re going to need funds to do that renovating. I assume you’ll be doing much of the work, but material costs can add up. You don’t want to stretch yourself too far and end up living in a dump eating beans and not being able to afford to make it pleasant.
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