I’m hitting the magic thirty mark this year and find myself at the crossroads. I’m married with one young child and another due in a couple of months. Also in a couple of months our second income (wife) ceases and we become a single income family.
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We currently are paying off our home which we purchased for 200k in 2000 and is now worth 400k. We have 150k left on the morgage.
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We have been thinking about investing in property or a business for some time.
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After reading Steve’s book and researching further on the net I feel inspired but am worried that now is the wrong time in the property cycle to try and find +ve cash flow properties for a price that I can afford.
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What I think I need is a push in the right direction…any advice would be much appreciated.
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Is it the right time for me to invest or should I wait now until the kids are school age.
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If I invest what purchase price would I be looking at considering the equity in my home and sonsidering I earn about 70k pa.
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regards
Ben [inlove]If you think it’s the wrong time in the cycle for you then it is. Dont invest just for the sake of investing or because you can.
Seems like you’re in a pretty good financial position, so you should leap in when the time is right for you, not because everyone else is doing it. Besides, if you waited a little while longer, you’d be in a even stronger position to invest if the market turns out to be attractive again.
Hope this helps…G7
Property is not the only investment that is positive cashflow. The time to invest is always now. I think looking at your 2000 purchase that has doubled in less than 5 years should be a good influence.
Have a look around at your options before settling on property. You might even consider idirectly investing in property through Listed Property Trusts. The return should be higher than the cost of funds you borrow to invest and you can get out pretty quickly should things go wrong.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksHiya Ben,
Real rough figures….out of your 70
15 in Tax (I’m not up to speed with latest rates)
13 in PPOR costs (interest plus outgoings)
30 in Domestic “Stuff”I see you are from NSW, so that 30 might be a bit shy.
If you tighten your belt you’ve got ~ 10 or 12 to play with. Mr Costello might be chipping in some for the new addition – you must be part of the crowd that he recommended “go forth”….
Although, I’d be a tad hesitant, ‘cos I know what comes first on the priority scale when funds are needed for both new bubs and IP’s…IP’s take a distant back seat.
You’ve really got yourself a tough – real life question there. Instead of asking the forum, maybe you should sit down with your wife and crunch some numbers on your budget and take it from there.
Congratulations on your newly expected arrival – hope everything goes smoothly with that.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
The only thing you could do is invest in New Zealand where you will recieve positive cashflow and growth. You will need between 10-20% deposit. It may be worth looking at a separate income stream from Australia.
It is important however to do you sums carefully. Although what you buy will be positive you will have to fund the 10-20% deposit here
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
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Originally posted by nkibel:The only thing you could do is invest in New Zealand where you will recieve positive cashflow and growth.
Nigel Kibel
The only thing Nigel???
I would expect a little bit more flexibility in options from a professional such as yourself?
You wouldn’t happen to be involved in marketing NZ property would you?
I think Ben has a number of options open to him at this stage even including venturing OS and setting up a strategy that includes the complexities of owning and running IPs on both sides of the Tasman.
Cheers,
Simon Macks
Finance 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.
Im Sorry
What I meant is that if he is looking at positive cashflow real estate then New Zealand may be his best option. I like New Zealand because it can give you a separate income stream to Australia. I am a buyers advocate. I purchase properties for clients in Australia and New Zealand. I do not market propeties as such. Naturally Australia is still a great place to invest however the returns are not there at present
Nigel Kibel
http://www.propertyknowhow.com.au
Australian and New Zealand Buyers advocate
service and seminarsNigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Hi Ben,
Now is a good time to invest but there is never a good time to rush into an investment.
I see you are earning 70k before tax at the moment and you have some equity. How much deposit have you managed to save out of your wages?I would suggest that you only borrow to invest if you have the ability to service the debt. A good start would be to see if you can save a deposit or at least save at a sustained rate equivalent to what your repayments would be.
I like to keep at least six months repayments on all debt as a buffer plus an amount for a subsistence wage if things go wrong. Obviously everyone has a different comfort zone.
Then do a money budget and keeping a spreadsheet of everything you spend. Update this daily and then you will know exactly how much you have to allocate to investing.
Then you will know what direction you need to go in. Perhaps you need to eliminate other debt or change certain things in your lifestyle. Investing can be a planned and rewarding experience or it can be an ad hoc disaster. Once you have a plan you should begin.
You will need goals otherwise when times get tough and “life happens†it may all seem to hard. Don’t delay the decision though. Get organized, get a plan and begin your research.
Good Luck
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
Thanks alot for all the advice. Becoming an investor is not something I take lightly and I am working to make the most informed decision I can.
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I must say NZ is attractive as it is my place of birth, though i have lived here for 24 of my 29 years). I realise properties in that neck of the woods are much more affordable and there are more opportunities for +ve caash flow.
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Once again thanks for the timely advice and I will endeavour to make an informed and profitable decision.
Ben
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