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  • Profile photo of urgemanurgeman
    Member
    @urgeman
    Join Date: 2003
    Post Count: 2

    I am wanting to start investing in property, but am undecided on my first property. I have never owned a house so I would be entitled to the FHOG if I lived it it, but am considering buying an IP straight up and keep renting where I am.
    I’m thinking that the FHOG can also be the start of another deposit for an IP.
    Any advise?

    Profile photo of MilkmanMilkman
    Member
    @milkman
    Join Date: 2003
    Post Count: 22

    Urgeman,

    You are right about the FHOG, it can’t be used for investment properties, can only be used for Owner Occupier.

    Your strategy is similar to Steve McKnight where he rented whilst building his own IP portfolio. I suppose that this ensures that he is using his available cash reserves to buy and concentrate on IP’s rather than sinking his money into his own house. Renting is certainly cheaper than paying a mortgage (depends on size of mortgage).

    I am in a similar boat as you, I am trying to purchase my first IP, I currently own my own house so I suppose I am in a good position, but it is still scary (especially with 2 youngsters).

    Good luck and if you haven’t read Steve’s book I would recommend it for some inspiration.

    Milkman

    Profile photo of JetDollarsJetDollars
    Participant
    @jetdollars
    Join Date: 2003
    Post Count: 2,435

    Urgeman,

    I start off in similar situation as you 3 years ago. I was wondering whether I should buy my PPOR or IPs. I decided to buy IP first and forget about my PPOR. By doing this it take a lot of load from my shoulder. Now I am up to my 6 IPs and never regret it. Currently I am still renting and will continue to rent for the next 5 years until I am cash up and buy my dream home.

    Kind regards

    Chandara
    [Keep going, you’re nearly reach the end of financial freedom]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Urgeman

    Hang on before you rush out and buy that first IP.
    You don’t mention which area you are in but say it was regional Australia. In Regional Qld you are spending <100K for your first house so the $7K FHOG represents 7% of your purchase price. In addition the exemption or reduced stamp duties could account for another $3K making a saving of 10% of the property value.

    Why not get into your own place pay it off as quick as you can yet at the same time purchase +cash flow properties and use the surplus cash to reduce your own non tax deductible home loan.

    The FHOG is unlikely to last for ever so at least its a step up the ladder to your own dream home.

    Cheers Richard
    [email protected]

    There is no such thing as a problem.
    Just a solution waiting to be found

    Richard Taylor | Australia's leading private lender

    Profile photo of urgemanurgeman
    Member
    @urgeman
    Join Date: 2003
    Post Count: 2

    Thanks for your replys,
    I live in Sydney now, and have to stay here for work for the time being, so if a bought PPOR, it would have to be in the sydney area, and obviously I won’t get a cheap one here. I have read Steve’s book and found it very inspirational, and I am keen to get started.
    I understand that the FHOG may not be around forever, and I don’t want regret my decision now.
    [:)]

    Profile photo of nugennugen
    Member
    @nugen
    Join Date: 2003
    Post Count: 58

    urgeman

    You could get a close friend or family member to occupy the house and pay board. This way you get FHOG and rent it out. I say family or friend because it could get nasty if you try that with anyone. I have had friends that did this and it worked really well.

    Nu Gen

    Profile photo of luckyoneluckyone
    Member
    @luckyone
    Join Date: 2003
    Post Count: 148

    Hi Nu Gen,

    I hope you realise how totally dishonest that is. The grant is given to people to help them buy a place of their own. I believe that you should live in it for at least some amount of time. I believe the official minimum stay is 1 year. My husband and I stayed in ours for 14 months to cover this rule.

    If you don’t stay that long, the Government can take the money off you. What would you do then?

    Luckyone

    Profile photo of jasonvjasonv
    Member
    @jasonv
    Join Date: 2003
    Post Count: 18

    quote:


    Thanks for your replys,
    I live in Sydney now, and have to stay here for work for the time being, so if a bought PPOR, it would have to be in the sydney area, and obviously I won’t get a cheap one here. I have read Steve’s book and found it very inspirational, and I am keen to get started.
    I understand that the FHOG may not be around forever, and I don’t want regret my decision now.
    [:)]


    If you would consider buying +ve cash flow properties in brisbane drop me a line [email protected] – jason

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