Hi everyone!
I have been reading with interest over the past few weeks all of the posts. There seems to be a lot of new investors out there!
Anyway, I am a 19 year old in Sydney looking at purchasing my first investment property. I don’t have a significant deposit saved nor do I own any significant assets. I am considering using the equity in my parents home to purchase my first property which they are tentatively willing to do. I would obviously need to look at property with positive cashflow as my limited income would not be able to fund extended periods with no tenants or an interest rate rise.
I think my best bet would be to drive for a few hours north or south to the upper central coast or kiama/nowra areas and look at properties there for around $150,000. My question is, given my limited income but (relatively) large amount of time, do you think it is wise to search for a property manager? I am studying law and have been reading a book put out by the Redfern Legal Centre about management of property (this book is an excellent buy for any property owner, btw) and have a moderate knowledge of the Residential Tenancies Act 1987. I am confident that I might be able to manage a property myself, but want to be very cautious.
I’m just wondering if anyone has any advice for me regarding this issue, or my situation. I have spent many months reading books and have subscribed to Property Investor magazine – but I think it’s time to spend my loooong summer vacation with some action!
Looking forward to any responses,
Nick Walker
Hi Nick
I’m in a similiar situation myself in that I’ll be spending a lot of my summer holidays continuing my research into property investments and start taking some action. With regards to the issue of Property Management, if you would prefer to manage your own properties to begin with in order to save the extra dollars, my advice would be to make sure that you fully understand what you are getting into, as I am sure you’re probably aware its not just a matter of collecting a cheque of your tennant(s) each month. [
] Speak to some property managers as well as others who manage properties themselves and understand the issues you have to know. Personally I’d rather leave the management side of things to the professionals who do it for a living while I can focus on investing, however there is nothing wrong with managing yourself, just make sure you do your homework and know what you’re getting into. []Regards,
BrettHi Nick
Apart from the legal requirements in managing tenants the other aspect is the contact/availability. Every person that I know that has/is managing their own properties will get calls at anytime of the day or night as there are no “office” hours. Obviously there can be plusses with this as you find out immediately any serious problems but you also find out about any inconsequential on the same basis.
You mention looking for a property manager but you will need to determine the area where your properties are going to be first. One on the major advantages of having a property manager is their local knowledge so finding one unrelated to your property can be self defeating.
I just reread your post and if it is your intention to look for the manager at the same time as the property then by all means interview some PM as you go to realestates for property. Get them to give you a written quote as you go and remember you do not need to leave the property you purchase with the property manager that is in place. So you can simply pick the PM you like and the property you want to buy.
hth
Hi Nick,
Welcome to the forum! I read your post with delight as it is really uplifting to see younger people getting serious about their future instead of gratifying their wants immediately. [
]
I read that you are studying Law. Congrats! Having studied myself, full time and 2 part-time degrees at once, I can assure you that the work load only increases. The last thing you want is to have worries with other things in your life whilst you are studying. I am sure you are quite capable, but it is just NOT worth the hassle trying to juggle everything yourself.
Perhaps try and find a friend or partner and go halves with investing. It can be drawn up legally and it might be easier to share the responsibilities. As you can see there are others in the same boat. Brett’s post is an example of this.
I suggest sitting down and creating a goal for the next 2 years, 5 years and 10 years. Think of the other responsibilities you might have and see whether you might be asking too much of yourself in trying to do everything yourself.
Perhaps your parents might want some involvement aswell, especially if they go guarentor (excuse my spelling).Okay, probably overload now…
Cheers and have a great weekend
Sooshie [
]There are no problems, only solutions!
Hi Nick,
a big congratulations to you for making a start. I also purchased my first rental property at 19 using my parents house as equity (that was 14 years ago). My experience has been that 1 to 5 properties can be easy to manage by yourself even with a full time job. Apart from saving cash, the benefits of doing it yourself are that you learn how to manage tennants and learn what is involved in the rental industry. In years to come, as your number of rental properties increase, you may need to hand them over to a property manager and having previously managed them yourself means that you will know what to look for in a PM (some are really bad) and know how to manage the PM.All the best
Xenia
] Speak to some property managers as well as others who manage properties themselves and understand the issues you have to know. Personally I’d rather leave the management side of things to the professionals who do it for a living while I can focus on investing, however there is nothing wrong with managing yourself, just make sure you do your homework and know what you’re getting into. [
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