Hi this is my first post here as im eagerly looking to research as much as i can before i get into the property market
i am 22 years old living with my parents,
for almost the last 2 years i have been working full time and so far i have saved about 65k by working an awful lot and saving every penny
over the past few weeks i have been doing some research into buying an apartment to live in or to possibly rent out
iv mainly looked at student accommodation in Carlton and the CBD and have gone to a couple inspections,
specifically the unilodge ones
i figure i can afford something around 300k but am yet to get financingmy plan was to live in the city with a friend who would pay me half of the rent
after reading some of the forums here im suddenly very hesitant as it seems that they are not such a good ideai just don't want to look back in 10 years and think why did i ever buy that stupid apartment
any advice as to what sort property i should be investing in with 65-70k equity would be amazing
i have considered something off the plan as this would net me 20k from the FHBGRegards,
DanielHi Daniel,
It depends what you’re after. If you want a CBD lifestyle then perhaps it might be worth a go, but if you’re after capital growth then the CBD apartment may not perform as well as other areas outside the CBD.
From personal experiences (before I got educated), I bought a CBD apartment, and it hasn’t appreciated nearly as much as property I could have bought at an equivalent value outside of the CBD. It’s a decision I still regret.
You might find better opportunities in inner city areas (3-10km from CBD) for about the same price, although you will be up for stamp duty and other costs and only $7K in the FHBG. These places won’t be as “new” as a CBD apartment either.Good luck with your research and feel free to come along to one of my complimentary First Home Buyer seminars if you want further education.
Knowledge is Empowering
Lincoln Haugh
Empower Wealth
03 9326 8900
[email protected]
http://www.empowerwealth.com.auPlease note this does not constitute property or financial advice.
Welcome to the forums Daniel.
It's great to see you've been working hard to reach a great savings goal in a short time. A question for you … do you know what your life goals are, and therefore your investing goals?
The way for you to invest will be driven a long way by your lifestyle goals. For example, if you want to build wealth it might be worth buying a property with higher capital growth potential that will build equity quickly (probably negatively geared so cashflow must be considered). I worked out recently that the equity in my home was building at an average of $1600 per week over the last 5 years. Pretty serious gains. Only problem is I have to work to pay for it so if I wanted a passive income stream as income replacement for example I would need to find positive cash flow properties. If I wanted to build quick cash to build the bank account then choose what to spend it on later I could do a develoment (I just completed one) or a renovation.
If you know your investing goals there will be less room for you to regret decisions as you are more likely to choose an investment strategy that suits your future life goals.
Having said all that, most of the comments I have read on student accommodation has been quite negative. Low, or even negative capital growth. Low control on the property (ie. you may not be able to live in it as it may be only for students). Short term leases that match academic years (so 20% vacancies?). But I have also read that many are positively geared. Search the site if you haven't already as there are some really good discussions on the topic.
All the best with your journey. Keep us up to date how you go!
Regards,
Andrew
itsandrew
Go as far as you can see and you will see further.
Wow thank you so much for that,
I think i have come to the conclusion that although ideally located student accommodation is really not going to suit my needs
since i am intending to live in the property at some point in time location is quite important to me
but in the end i am only really buying to utilize the FHOG whilst its still on offer and to make use of the modest equity i have in the bank so wealth building is really going to be my no.1 aim in the short term so i can one day upgrade to a larger propertyi see so many people i work with in their 30's and 40's still renting living paycheck to paycheck and this is really all the motivation i need to work hard early on in life to secure a financially secure future
I have been looking a little around the Brunswick area since it seems to have reasonable capital growth but it really seems difficult to get into the market with under 350k
Would you have any recommendations of any other suburbs in Melbourne that are performing well that i can researchCheers,
DanielYou could check next door in Coburg?
A good idea would be to buy, or subscribe to, Australian Property Investor. Apart from their articles they have a section at the back showing 10 year historical growth for each suburb (also number of houses sold, 12 month growth, yield). There may be some clues there.
Andrew
itsandrew
Go as far as you can see and you will see further.
We recently bought an apartment in Hawthorn for 320k, which seems to be around your price range.
Hi Daniel…
If you want to live in a place where you think it would give you peace but that's not away from work. Look for an target area first where you want to have House and land. Where you think you can stay comfortably.
Thanks for the info guys,
I was wondering about the prospect of buying off the plan,
Since the 20k i would receive off the government would really help out
Any ideas of reputable developers or property's??
Also i was wondering if you buy off the plan after construction has commenced do you still get the stamp duty benefits for buying such a property??
Thanks again,
DanielDaniel,
The type of property you can buy will be determined by what amount you can borrow and then be able to afford the rental shortfall (if any). I would also caution you to keep away from student accommodation, mainly because lenders don't like them and it is harder to get a higher loan to value ratio loan to purchase.I have a number of clients purchase their first property taking advantage of the FHOG, living in it for 6 months and then moving back with the folks or renting. They 'convert' it to an IP. The need is often because they only have a minimal deposit and need the FHOG to be able to settle. The type of properties this works well for are the new H&L packages or OFP developments. I would caution an OFP development as it has higher risk of valuation not stacking up on settlement and of delays. If you do, I would only suggest you look at small boutique developments, even the 2 or 3 town-house small developments in inner to mid suburbs rather than the multi story apartment complex.
You then need to consider loan structure, looking at a 5 year IO loan with 100% offset, even if you take the FHOG option. You have sufficient funds to be able to buy as an IP, it just depends on your longer term goals as to what emphasis you place on capital growth (presuming you have income to support further loans) or rent yield to support that income.
If you buy OTP where construction has commenced, you will still be eligible for some stamp duty relief but not as much as pre-build.
Good luck
Greg
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