I am looking for a bit of advice driven primarily from experience. I have about $30,000 and want to start my property portfolio. I am looking to buy units and the like and wouldn’t mind spending $10,000 towards eacch property. Though I live in Melbourne I have been looking into the Tassie amrket where things are much more affordable. I suppose my first question is if this market is realistically going to provide me with a positive cashflow and secondly, if I have enough money to build a portfolio.
start with some sums, get figures, and start off with one, slow and steady in my books
There is no guarantee with anything
ElvesI agree with elves.
I too am new to the “game” based on what little knowledge I have thus far scrapped together, one is a good start.
2,3,4 & 5 may follow…. but in good time
…emotion clouds good judgement but is a defining element of character.
Start with one property.. then once you’ve gained experience, buy another and so on . You wouldn’t want to buy ‘a few’ units with little/no experience and/or knowledge of what you’re getting yourself into.. [8]
In regards to investing in Tassie.. if you’ve studied the area you are wanting to invest in, then you should have a rough idea if it’s a good area to invest in or not. You can’t really be 100% sure what the growth in the area will be like but if you’ve done your research then your chances of succeeding will be a lot better. I myself wouldn’t invest in an area I’m not familiar with.. especially in a different state. I wouldn’t be able to have a peaceful sleep each night unless I had a kick arse PM looking after my baby.
I’m a bit confused about what you mean when you say ‘spending $10,000 towards each property’.. I’m assuming you’re referring to the deposit? You can use a deposit to calculate roughly how much you can borrow, however the loan amount depends greatly on your ability to service the loan so I can’t answer your last question [
] Goodluck with it all! [^]Hi Ortheria
“I suppose my first question is if this market is realistically going to provide me with a positive cashflow and secondly, if I have enough money to build a portfolio.”
First question: Any property can be CF+ if you put down a large enough deposit and have a tenant. BUt seriously, look at some properties, find out the rental price and work it out. For an $80,000 property:
Ongoing costs (per week) are the interest (about $90 on an 80% lend), home insurance ($25), rates ($20?), repairs and maintenance (maybe 5% of rental income), property managers fees (8% of rent).Second question: It is usual to put down a 20% deposit. You can do less but then will typically need mortgage insurance which adds to your costs. Say you find a property for $80,000 and use 20% deposit, that’s $16,000. Closing costs (solicitor, stamp duty, loan fee etc) are about 5% of the purchase price which is $4,000. That’s $20,000.
Read a few PI books and the relevant topics on this forum. Go and look at properties even near where you live just to get a feel for what you’re looking at.
Good luck
JudiHi there guys, I’m just wondering…
How likely is it that we can only put a deposit down of 5%, or even only $1000 (as steve said he had done in the book).
And a question about the expenses, what are ‘rates’?.
Also, is it better to find a mortgage first or sign a deal for a property first?
I’m really new in this thing.. thanks for any help.
Penguin,
At the very least speak to a mortgage professional and ensure that the funds will be available. If you decide not to go for a pre approval make sure you have a 14 day finance clause.
If you do get a pre approval you still need a clause – perhaps 7 days in case the property doesn’t value up and the lender doesn’t release sufficient funds.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanx for the info mortgage hunter
.And I’m assuming ‘clause’ is a settlement period?
No.
It is the period when you can back out with no penalty if finance doesn’t work out.
You can also have a clause for pest and building inspections amongst other things.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Penguin
Rates are what you pay to the local council each year (or 6months) as the owner of the property. The money is used to pay for things like water, although that is sometimes a separate expense, and sewerage and other things.
Usually when you agree to buy a property, you will pay a deposit (which comes off the part of purchase price that you pay). Depending on where you are, it may be $1000, or 10% of the purchase price, or it may be entirely negotiable.
When you borrow money from a bank to pay for a property, the bank wants you to pay a certain amount of the price (usually 20%), and they lend you the rest. The amount you pay is called a deposit.
Judi
] Goodluck with it all! [^]
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