Hey everyone, Im very curious as to how all you investors buy a nice expensive house for your family to live in, not an investment property. Im only young and have no investing experience, but im looking at getting a few propertys, but im unsure of how to handle it so we can buy a nice house down the track. I recently brought a house for 352k and have about 40k off the loan, and we r moving back home for 2 yrs to save some money while we rent it out for the 2 yrs. Im thinking of buying another place very soon to also rent out while we r living back at home. Im not too sure if this is a good idea or not?? And how do people buy a nice house, do they use the equity off the investment properties?? Any help would be great thanks.
Grant
Grant,
I started in a similar fashion to you. This is what I did, learn, learn and learn…….. spend every spare moment looking at tax guides, and financial literature. Be great at mathematics so you do not have to rely on other people, you need to have the confidence calculate the value of acquisitions quickly, without the reliance of third parties. But most importantly, be very patient.
Let the dream house come after you are financially established, most people buy their dream house first (remember this is non- tax deductible debt). This reduces your opportunity to become wealthy.
i renovated the place i was in, sold it for significant profit (tax free as it was my PPOR), then purchased a house in the area i wanted that required a lot of work, i then renovated it on the weekend.
… then i split with my partner and sold it….
I have since then lived in a 3 story place in a good suburbs with 4 mates and now live in a top story apartment in southbank melbourne, both of which have been less hassle, cost A LOT LESS, and fit in perfectly with my life style. I rent
and am investing my money (a large portion of which i am saving because i don’t have a PPOR and associated costs) where ever i can get a solid return and live the lifestyle i want much cheaper because i rent it.If someone can tell me too that would be great!
I rent, in a very nice suburb in Melbourne and all my money goes in investing. I figure make hay while the sun shines then get the big, pretty house later when we are set for life. Sacrifice now for, living it up later. (Well sort of live it up now and live it up heaps later )My dream house costs around 400-500k just to build and then about 50 acres will cost what? 1-2 mil (in the sticks). Race track…….smell that rubber!
Dreams are good motivation so you can get the real thing.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi all.
This is a great line of discussion as I can remember wondering the same thing, about twenty years ago, and if I had
looked through a crystal ball and seen where I'd be in that twenty years ahead, I think I would have been very pleased. My advice is to buy something you can afford and that has potential of some sort (renovate, subdivide, dual occupancy etc.) This will gain you equity. Don't try to live in as good a home as your parents or friends, or in as nice an area. Look for upcoming locations. Every few years (say 2-7?), upgrade into something else by selling your improved property and moving up towards your goal taking a step at a time,repeating the process. You should be able to invest at the same time if you have established equity in your home. ( In fact, one way some people have bought their dream home is by 'cashing in' equity from an investment property purchased before a previous price rise).G
Yeah… I can remember in the mid 1990's wondering how I could ever afford to buy a $200k house in Melbourne… Alas for those searching for a way to make it work now!
Look, the days of buying a home and working to pay off the mortgage are coming to an end… it's just not possible for your average person to do this as property prices are increasing faster than most people can save. Another model is needed.
In my opinion, this comes from doing reno type projects to build capital (or share trading, property options etc), and then using your profits to fund a bigger deposit on your PPOR so you can have a less humungous mortgage. In my case, I never bought the house but rented and invested in property with my deposit money instead.
Food for thought.
– Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanks everyone for posting,
It is nice to see that others have gone before and what strategies they have used to get ahead (or get into Canterbury
). We are now at a crossroads of thinking about moving to a cheaper area in order to plough more money into developing, which is a bit hard as where we live is safe, and friendly and expensive .Geraldine that is what I was thinking, live in a renovator's dream (or with 2 little kids a nightmare) and just get on with it. At least if you live in it and then sell it you can get more cash out with the end result. The only problem is for continuing development projects the more you can borrow the better and once you have a ppor then you start limiting yourself.
It's all about how much you want it.
http://www.fasham.com.au/ (oh yes I will have one……one day)
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email Me
and am investing my money (a large portion of which i am saving because i don’t have a PPOR and associated costs) where ever i can get a solid return and live the lifestyle i want much cheaper because i rent it.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
