All Topics / Help Needed! / Your Thoughts Please?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of Da ManDa Man
    Member
    @da-man
    Join Date: 2004
    Post Count: 37

    I’ve been overseas working for the past year and will be coming back home to Sydney at Xmas.

    I’ve been keeping an eye on units in a particular beachside suburb in Sydney.

    I will be coming back home with at least $45K for a deposit, and if I save that extra little bit, might be able to push this up over $50K.

    I will be able to get the conveyance done for free (not including the disbursements), so that is one closing cost that is under control.

    I am looking at 2 bedroom flats which are advertised in the range $400-$430K, and tentatively budgeting on:

    $40K for deposit
    $10K for closing costs (stamp duty, disbursements etc)
    And then borrowing $350-360K and try to haggle down to just below or around $400K.

    I intend to negative gear the property and hang on to it, then in future, borrow against the equity, buy a second place, then live in the other one. I like my job, and I’m not motivated by not having to work again – rather I want to accumulate assets in the medium term.

    Clearly this is a long term strategy. I am 28 years old and my Australian salary will climb to six figures in the next 6 months.

    My questions are:

    1. Do you think my “tentative” mental budget above sounds feasible. In particular have I allowed the right amount for closing costs?
    2. Does this sound like a sound investment strategy for somebody in my circumstances (I am single and without other financial commitments)
    3. Is this the best time to buy for someone like me?
    4. Any other thoughts?

    It seems to me it’s the perfect time for me to buy when I return as I’ve noticed say a 10% decrease in advertised prices since about March (the time I started creating a min database of desirable properties).

    I’m not looking for any concrete advice, but would just appreciate some general thoughts as this will be my very first investment and I’m very cautious.

    Thanks in advance.

    Da Man

    Profile photo of FFCommFFComm
    Member
    @ffcomm
    Join Date: 2004
    Post Count: 627

    I’ll give a general, vague reply if you want.

    Add an extra $5K for stamp duties (roughly NSW stamp duty will be $13,940).

    Rgds.
    Lucifer_au

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Da Man,

    It seems to me that you may be over extending yourself. Sure you are going to be on a high income level and you have established a savings record. My concern is that you are stretching to secure the property and don’t appear to have something up your sleeve – or at least your post doesn’t indicate such.

    Things can and do go wrong with property investment and I certainly suggest that people that I work with that have some emergency funds available at these moments.

    In terms of the remainder of your plan – there is nothing wrong with buying, holding a refinancing to release the equity. For me buying good quality property in capital cities is a surefire long term winner. Through capital growth you can achieve great financial gains.

    Derek
    [email protected]

    Property Investment Support Available. Ongoing and never stopping. PM welcome.

    Profile photo of Da ManDa Man
    Member
    @da-man
    Join Date: 2004
    Post Count: 37

    I appreciate your forthright thoughts Derek. You may well be right on the over extending part and no, I don’t have anythign up my sleeve.

    I will of course, be going over the figures in more detail when I get back home and get a loan approval, work out a new montlhy budget etc – but I guess I just wanted some gut reactions from people with more experience than me.

    Thank you very much.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    If you are working overseas, then you are probably a non resident for tax purposes – unless maybe if you are working for hte UN in Timor etc. If that’s the case then I think you will need around 20% deposit.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

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

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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

    Of course, if you are a first home buyer in NSW, the state government is still offering no stamp duty (or substantially reduced stamp duty) to first home buyers. This may help with your closing costs.

    Thanks,
    Luckyone

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