- DSHParticipant@dshJoin Date: 2010Post Count: 1
…what (if anything) would you do differently, and what would the ONE piece of advice be to someone starting out that you have learned yourself – and not from a book.
Im new to the forum (first post!), and much of the information I have read is really helpful and insightful. Im glad that there people are out there willing to give up their own time and knowledge to beginners like myself. Haha, its almost a case of information overload as there are too many options.
Im at a bit of a cross roads with my investments – I have had money tied up in shares for about 5 years (Im 30 now), but there more I learn about the stock market, the more I feel that its not for me.
Myself and my partner have approx $180,000 cash ready to invest and arent really sure whether to buy an live in a unit, and the money we would have paid on rent (as we rent now) put towards paying off a loan for an IP….or outright buy a unit with a secure rental lease, and continue renting for a while….We are both on under $30K per year, but are very good at saving cash…
I guess Im interested to know what others have done in a similar situation, and whether it worked both in terms of financial returns and lifestyle (I dont want to lay awake at night stressing about loan repayments, bad tenants, etc) .
DaveFinSpecMember@finspecJoin Date: 2009Post Count: 137
Hi DSH… I think just about everyone would do something a little bit different – I purchased a unit as my first property and would have preferred to buy a house (but we’re all richer in hindsight aren’t we!)… generally speaking, I’ve found that when push comes to shove, you have to do something – but keep your head about you.
You’ve raised some interesting points that I talk to people about often which are:
Shares vs Property
Investment vs Lifestyle
Risk vs Return
There are no black and white answers to your questions, as everyone should have a unique formula for what works for them – I would suggest you go get some financial advice, but finding someone who is going to have the expertise to discuss all those areas in an unbiased manner is going to be pretty hard. But a few tips:
1. think long term
2. have a back up plan
3. analyse every risk and have a mini plan on how you’re deal with that issue if and when it arrives. Most risks that you worry about can be mitigated with a good plan
4. cash flow is more important than anything
5. knowledge is power
Personally, I bought a stack of property in the late 90’s and 2000’s and then just one every couple of years since then – it was aggressive and in hindsight, I really had no idea what I was doing in the earlier days. I was lucky, it works & I was investing in a boom market – I would suggest the same in the current market.
Best of luck, happy to chat on the phone if you PM me.CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
What I'd do differently is to keep it.
Sold it too early as I was like a lot of newby investors who know they want to get into property but don't know anyone that does it. Bought a great place at a good price but listened to the media hype in the height of the boom talking about how Sydney market is about to crash, interest rates are going to go skyhigh etc etc.Scott No MatesParticipant@scott-no-matesJoin Date: 2005Post Count: 3,856
not sell it…..but Then again, I needed the cash.gronk007Member@gronk007Join Date: 2005Post Count: 54
invest in a time machineDerekMember@derekJoin Date: 2004Post Count: 3,544
We started around the age of 25 and held our first property for about 13 years – living in it for only 2 of those years.
Don't regret it for one minute as we were able sell the property and use the proceeds to build our dream home.
My only regret is that I/we didn't leverage off the equity we had in this first property. If we had done this then who knows where we would be today.DSH wrote:I guess Im interested to know what others have done in a similar situation, and whether it worked both in terms of financial returns and lifestyle (I dont want to lay awake at night stressing about loan repayments, bad tenants, etc) . cheers! Dave
Your fears are 'normal' – anyone who is conscious of these sorts of issues is either a fool, ignorant or dead. To me the fact you are wary of these issues is an endorsement of your financial acumen rather than an indictment on you.
Fear of debt can hold you back – make sure you differentiate between good & bad debt. While it is a cliched phrase it is to a large degree true, The key to debt is to manage it wisely and keep within the bounds of reason. Remember the bank use assessments and analysis from many different people over many different years to establish their borrowing limits. Under these circumstances you can be reasonable confident the bank won't give you any money if you can't afford it.
Congrats on the savings' regime – the way you have managed this would suggest you have the capacity to handle a loan.