All Topics / The Treasure Chest / Invest or Buy to Live

Viewing 13 posts - 1 through 13 (of 13 total)
  • Profile photo of TeyluTeylu
    Member
    @teylu
    Join Date: 2003
    Post Count: 68

    Good Morning Everyone,

    This topic is a bit off the track and long, but still related to Property Investing.

    I am currently in a bit of a dilemma with my partner. We are currently saving to buy a House to live in but still don’t have enough to purchase a Property.

    Where we live is the Central Coast North of Sydney. Our property market has shot through the roof in the last 7 years. Eg A friend of mine bought his house for 107k and just sold after pumping 25k into it for 354k. It seems that property in our area that is the quality end of the market or zoned 2B are selling for 375k – 550k +. We are looking at the bottom end in the surrounding areas between 200k -330k all dependent on the quality, position, etc of the property.

    Now here’s my prob. I have over the last 3 months read Anita Bell, Jan Somers, and Steve’s books and as you can understand I am absolutley jumping out of my skin to get into investing. But my partner wants me to concentrate on getting our first home before I invest.

    I am also trying to help my folks get set up for retirement by sorting out their finances and getting them to read the same books and start a partnership with them to get into investing.

    My question is what should I do?
    Should I keep a cool head and take baby steps.
    Or
    Wait (But I am scared I could miss the boat)

    Any advice would be great.

    The future looks promising but which is the right road to take.

    Thanks guys it great reading everyone posts.
    Teylu

    Profile photo of KavitaKavita
    Member
    @kavita
    Join Date: 2002
    Post Count: 45

    Hi

    I would personally try and save for a house/property to live in. Are you paying rent currently? If you are it would be worth buying your own property…then using the equity to buy an IP. Also I believe it will be better for you to wait and observe the market … it will change.

    Get your parents to visit a financial adviser or an accountant. Joint ventures with family can be a problem later onwards.

    Sorry nothing too positive here!!

    Profile photo of TeyluTeylu
    Member
    @teylu
    Join Date: 2003
    Post Count: 68

    All is well Kavita,

    Thanks for the advice. Good or Bad its all good.
    I just want some scope on how to attack thing with my new found knowledge.

    Cheers Everyone. Mre comments are welcome.
    Peace
    Teylu

    Profile photo of aj_2aj_2
    Participant
    @aj_2
    Join Date: 2003
    Post Count: 86

    quote:


    All is well Kavita,

    Thanks for the advice. Good or Bad its all good.
    I just want some scope on how to attack thing with my new found knowledge.

    Cheers Everyone. Mre comments are welcome.
    Peace
    Teylu



    hi Teylu
    may be you need to look about 20 min up the road the prices are slowly climbing depending if you want a lake view or not
    aaron

    Profile photo of richmondrichmond
    Participant
    @richmond
    Join Date: 2003
    Post Count: 831

    G’day,

    Personally, I don’t like financial advisors… a lot of the time they end up just trying to flog you stuff they end up getting a commission for.

    In terms of buying an IP before a PPOR, there’s a school of thought that it’s better to buy IPs because the interest on the loans is deductible (good debt) whereas with a PPOR it is not (bad debt)

    Having said that, I’m paying off my PPOR while trying to build an IP portfolio at the same time… we’re trying to get rid of the PPOR loan as quick as we can. In my case I’m happier having a PPOR because I enjoy doing bits and pieces to the property and having a sense of “home” but it’s horses for courses…

    If the value of your IP goes up, you can still access the equity via a line of credit…

    Don’t worry about missing the boat, because property, like any market, goes in cycles, and while you might feel you’ve missed the boat for a minute, there will be another coming in at another port before you know it.

    If you’re researching and you come across something good, do the numbers, and if they add up, go for it… just don’t feel like you’ve got to buy buy buy because everyone else is… DON’T FOLLOW THE HERD, because you’ll be sure to make mistakes. Research, take your time and do things at your own pace…

    My two cents.

    Cheers
    r

    Profile photo of caz_in_perthcaz_in_perth
    Participant
    @caz_in_perth
    Join Date: 2003
    Post Count: 29

    I think a lot of people forget that their first home is not going to be their dream home. That’s why the cheaper “fixer uppers” are often advertised as “first home or investment”. It could be 2 or 3 down the track before you can buy what you like.

    You are right to approach it as though you are buying an IP as your first home is the biggest investment most people ever make and it can become an IP when you have the equity to trade up and buy something that suits you better.

    I know some investors rent, which is fine if you don’t have kids and rents in the area you want to live in are way below the cost of buying there. We are buying our PPOR because we have kids and by moving 15 minutes down the freeway we can buy a substantial house for less than the average rental on a similar 4 bedroom house ( of course if interst rates jump that may not be true and renting will be cheaper). In a year we’ll refinance and buy our second IP.

    If you both have time and inclination why not buy a place that needs a lick of paint and landscaping so you’ll quickly increase the value then you can access the equity.

    BTW I have friends (DINKs) who have moved 5 times in 3 years, they are serial renovators and just paid cash for their latest property.

    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    Joint venture with family or almost anyone else is asking for trouble.
    We have a shared house with parents, whilst we have no personal issues, there is absolutely no flexibility.
    We want to sell in about 3 years and do the travel bit and not have the finacial/physical burden of such a large property.
    It seems to cause my father especially endless stress, although I’ve reassured him we will find him something else that he will enjoy living in.
    We should have never done this arrangement, its also a finacial detriment, since we will not get as much back had we not kept 2 separate houses.

    Profile photo of TeyluTeylu
    Member
    @teylu
    Join Date: 2003
    Post Count: 68

    Thanks heaps everyone.

    My nervous energy has been subdued.

    Your advice is great, my partner and me were always looking to get a “In need of TLC property” one so we can add value, and also so we can decorate as we like. It is never going to be our dream home first but definately one step towards it.

    Cheers All
    Teylu

    PS Aaron J
    What area are you referriong to.
    I live at Woy Woy are you talking about Wyoming or further north like Warnervale???

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Waht about this idea.

    Find a property you want to live in. Buy it, live in it for a short time so you can claim it as your primary residence, and then go back to renting and negatively gear the property for a few years to get some deductions.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of puissancepuissance
    Member
    @puissance
    Join Date: 2003
    Post Count: 72

    Yep, you can do that for five years only though

    Profile photo of aj_2aj_2
    Participant
    @aj_2
    Join Date: 2003
    Post Count: 86

    hi
    actually a little further morisset and surrounds some are still under the 3k
    aaron
    ps I’d love to buy the hospital the amount of buildings going to waste (typical government)

    Profile photo of junior2junior2
    Member
    @junior2
    Join Date: 2003
    Post Count: 50

    Can understand your problem Tayla!

    I’ve spent the last 2 years living with relatives and friends throughout victoria and now live with my gp’s but would like my own property to live in as well. because im living with my gps and pay minimal rent ( compared with what i charge as a landlord) it makes it easier costs wise to save (except for what some may call a lack of discipline and the ongoing cost of a girlfriend that doesn’t think maccas is a romantic dinner![}:)][;)][:)]!!!) But if you can buy a house to live in under market value and refinance to at least get a deposit for an ip you should be rite to do both! look for houses that are undergoing brankruptsy sales or are part of a deceased estate for bargains! Hope this helps

    J

    Profile photo of ShaneBShaneB
    Member
    @shaneb
    Join Date: 2003
    Post Count: 62

    I lived with my gp until he finally croked it (the ol bugger) and left me with a little sum!

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