Hi all,
This may be a very vague and simple question, but I am very new to this and learning a lot along the way. My husband and I are very keen to get into this PI scene, but only have $20K deposit but no loans or prior debt hanging over our heads.
We are desperate to get into our own home asap, but I am more interested in getting our property portfolio off to a good start and if that means going into another unit first then so be it! As Steve says, how many years does it take you to save up for the inital deposit – so I dont want to waste this one we have.We've been looking (we live on the Gold Coast unfortunatley) and will probably only be able to afford a unit/townhouse taking into account we want it to be a positive net cashflow property hopefully in a high growth area.
What I want to know is how much is too much to pay in body corp fees (I am tight and having to give away $15 extra is going to kill me!)?Thanks in advance for the help!
If you want cashflow and growth immediately you really are a dreamer. Units by nature incur body corp fees. To avoid these you need to find a duplex 2 bedder and hope the other half is the guy that owns it so there is no body corp fees. apart from that avoid pools, tennis courts, and onsite managers like the plague and you can find reasonable body corp fees.
Does it have to be the gold coast?? Is this a work related location or can you move?? Would something in the Logan area give you a 45 minute bearable trip to the GC as well as a 25 minute drive to the brizzy cbd. Many in this area have a $1200/yr or less body corp fee which in this day and age is great.
So if you want it as an investment why stay local? Look further afield for greater pricing and holding cost flexibility. Cairns or Townsville, maybe Bundy all have good deals available right now.
Its all hard to start with, but the options you have are only limited by your thinking.
Good Luck.
DD
hi DD,
Thanks for the valuable input. No it doesnt have to be the GC, but we wouldnt move just yet and uproot ourselves. The only reason we were looking locally is so we could utitlise the FHOG because we'd have to live in it first. Further afield is definitley an option though, and we have found many duplex's but not cheap enough to pass the 11 second solution.
Another silly question, but if we did buy say in Cairns first as an investment and we didn't live in it, could we then utilize the FHOG for the second house if it was to be 'ours' and we lived in it?
Thanks <br /
:-)” title=”>:-)” class=”bbcode_smiley” />Hi Starbud
Dont want to put a dampner on the deal (especially being my 7000 post and all that) but even if you lived in the property and claimed the FHOG and Stamp Duty Concession (assuming you were both elligible to receive these) you would need more than $20K deposit.
On a $300K house even if you managed to get a 5% deposit that is $15,000 and from this many lenders will deduct the mortgage insurance premium which will be a lot more than $5000.
Whilst some lenders advertise they will do 95% + LMI in reality unless you have some form of previous relationship it is unlikely the loan would be approved as at that level of lending most loans are credit scored so personal contact with the branch teller means very little.
Yes you could claim the FHOG the second time round when you purchase your own PPOR however in saying this the Investment Stamp Duty in Qld is fairly hefty and you wouldnt then get the concessionary rate when you purchased your own place.
All in all i would either save a little more or decide to claim the first home as your PPOR, move in and satisfy the relevant conditions and then look to rent the place out and buy another PPOR when you have more deposit or equity.
Richard Taylor | Australia's leading private lender
starbud wrote:hi DD,Thanks for the valuable input. No it doesnt have to be the GC, but we wouldnt move just yet and uproot ourselves. The only reason we were looking locally is so we could utitlise the FHOG because we'd have to live in it first. Further afield is definitley an option though, and we have found many duplex's but not cheap enough to pass the 11 second solution.
Another silly question, but if we did buy say in Cairns first as an investment and we didn't live in it, could we then utilize the FHOG for the second house if it was to be 'ours' and we lived in it?
Thanks <br /
:-)” title=”>:-)” class=”bbcode_smiley” />Just a couple of quick ones:
I was under the impression that you could only claim the FHOG if it is the first property you have purchased. One way to get around this would be if you bought the first property solely in your name and the second in your partners name.
To qualify for the FHOG you don’t have to move into the property immediately – as long as you move in within 12 months and stay for a minimum of 6 months (I’m not sure if the 6 month thing is an actual rule or just a guideline that indicates that if you stayed there shorter than that time is might be looked at)
I’d double check this though, just in case the rules are different in Queensland
The FHOG only relates to your PPOR. If you buy a PI first you are still eligible for the FHOG when you do buy your PPOR
d.one
Regretfully buying 1 home in your name and the 2nd in your partners name will not work as your partner will not qualify for the FHOG.
Richard Taylor | Australia's leading private lender
Hmmm, i was told i would need a deposit of $25,000 or so on a $300k property and so that was going to take me a longgggg time to build that up with renting and all so had gotten a bit discouraged…
But i live in Perth and found a house and land packager that uses Keystart (http://www.keystart.com.au/key/about-keystart.htm which is a Western Australian Government Program to assist people into houses) and they only require a 4% deposit of which only 2% has to be via a savings record, the rest can appear out of nowhere and don't have to be a first home buyer either… They give you some fee assistance and i might be able to package some of the fees into the loan… Anyway i should be able to do something hopefully with a deposit less than $15,000….
Now keystart seems to only be available for WA residents who will live in the propety bought (not sure how inventive you can be about this as an investor) but anyway just letting you know that not everything will require a 5% deposit plus all the rest in these tougher lending times as i had been turned away a couple of times and told to come back when i had more money… Not sure if Queensland has anything similar to allow you to get in quicker???
Mark
Hmm wouldn't u know, the Keystart criteria have just changed and made it harder… oh well, s**t happens…
Great thanks for the advice Casanovawa – I will do some research and see if there is something similar here or even in northen NSW maybe
starbud wrote:What I want to know is how much is too much to pay in body corp fees (I am tight and having to give away $15 extra is going to kill me!)?Quote:This depends on whether you need the deductions to offset your rental income and achieve negative gearing.
If you don't, I'd analyse exactly what the body corporate management is delivering for the fees charged and make a call whether it's worth it.
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I DIY manage with Rentwise.
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