- Laurie199Member@laurie199Join Date: 2011Post Count: 2
Hello my name is Laurie i am brand new to this, i am 23, and am ready to buy my first property. I am close to the mornington peninsula of Victoria. I have a limit of 350000, I am looking at two 2 bedroom units in Mornington, one at 310k+ and the other for 330k+, i am also looking at 3 bedroom houses in Langwarrin, Skye and Carrum Downs that dont exceed 350k.
My plan is to rent the property out for at least 2 years, then move into it for maybe 3 years, then sell it and buy a 3 bedroom house where i definatly want to live. hopefully in that amount of time i will be in a financial position where i can do that with the pay rises I will be getting at work and what I hope to make off selling the property.
i am wondering is what i am thinking a good idea? is buying a unit in Mornington for nearly the same price as a house elsewhere a good idea? Obviously some are not going to know where some of these locations are but hopefully some will!
Any help is appreciated im tearing my hair out i dont know what to do, every friend or family seems to think that they are an expert and are all telling me to do something different so i dont know who to listen to.
Lauriemaree_bradrossMember@maree_bradrossJoin Date: 2007Post Count: 401
Hi Laurie & welcome.
I looove Mornington & would buy there in a heartbeat – do the units you’re looking at have yards?
Not really a fan of Carrum Downs sorry. We live in Seaford (close to beach and train station) so my bias is there sorryCap BParticipant@cap-bJoin Date: 2010Post Count: 8
I would stay around Mornington, mt Eliza, or parts of Frankston South. Avoid Carrum, Frankston North and most of Seaford. Seaford close to the beach is OK. Mornington has great beaches, booming population, new freeway etc so is a great place to invest. Parts of Frankston have great potential as the council in remapping a new face for the town, it is buy the beach and restaurants and cafes are popping up around the place.
Best side of Melbourne. Dont try to pick better growth from Frankston South to Mornington. Just get in there and keep your money in long term.bm17Participant@bm17Join Date: 2010Post Count: 47
As you said everyone seems to have an opinion and are always happy to offer their 2 cents.
I am also a young investor (24yo) and have been fortunate enough to purchase 2 investment properties, both of which are in Frankston North.
Similar to you, when i was looking to purchase everyone i spoke to had a different opinion and told me what i was doing was far too risky, wouldnt have good growth, tenants will trash them etc.
Well 2 years later and I have had no problems, tenants always pay, and values have increased.
The most important advice i could offer would be that just get into the market as soon as you can (so long it is not a stretch on finances). do your research and due dilligence and then just take the plunge.
Good luck!Jacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
Where will you live while you are renting it out for 2 years? Will you rent elsewhere, or live with your parents?
I'd like to point out the matter of capital gains tax. You will have to pay some if you move tenants in from day one. However. If YOU move in on day one, thus establishing the property as your PPOR (primary place of residence), then move out, renting elsewhere, you have six years to move back into it, and your capital-gains-tax-free situation remains intact by means of the 6 year rule.Laurie199Member@laurie199Join Date: 2011Post Count: 2
thanks for the replies all! well it does seem that Mornington/Frankston by the beach is the go. maree_bradross the property for 330k has a decent size yard for a unit, but the one for 310k has bugger all. just a small courtyard out the back and out the front. also only has a carport space not a single car garage. but it does have the benefit of being on the beach side of nepean highway and you could walk to main street shops in 10 mins.
yeah i will be living at home with my mum. i could stay at home for as long as i want but i want to move out from pretty much 3 years ago so any longer than a couple more years i dont think that i can handle.
i did not know about this capital gains tax i have heard about it but never knew what it was. so how long do i have to live in it as my PROR to avoid the tax? i would assume at least 6 months? at least then i can still get the first home buyers grant.
thanks for all the help guys
i have been looking a little at frankston i to have looked a bit at frankston north it is probably a good buy seeming as eventually it will most likely be brought out good on ya blair for being in such a great situationluke86Participant@luke86Join Date: 2010Post Count: 470
If you are able to claim the FHOG then it may be worthwhile moving in for 6 months so you can do this (depending on your investment plan and strategy of of course). You can only claim the FHOG once and you will not be able to claim it if you have owned a PPOR before. So if you intend to move in to claim CGT exemption under the 6 year rule (I dont think there is a minimum time you need to move in for, you can move in for 2 weeks and it will still count I am pretty sure), then you may as well move in for 6 months and qualify for the 6 year rule plus the FHOG. You will not be able to claim the FHOG again because you have already owned a PPOR if you ever move into this property.
If your strategy is to hold the property long term and never sell (so hold it for 20 years or more), then you might be better off not moving in at all and claiming the FHOG on a more expensive property in the future. The more expensive the property, the bigger the stamp duty saving. If you are not going to sell in the short to medium term, then the CGT expemtion doesnt really matter.
LukeJJ7Participant@jj7Join Date: 2010Post Count: 20
Being an eternal pessimist, I wouldn’t count on the FHOG being around too far into the future. There used to be one years ago which finished just before we bought our first place, then it came back a few years later by which time it was no good to us as we were no longer first home owners. If you can’t see yourself buying a bigger place for a couple of years it may pay to take advantage of the FHOG while you know it is still available. Just a thought.
JJAdam.FParticipant@adam.fJoin Date: 2011Post Count: 6
Laurie, I don't think you will go wrong anywhere around this region with the new freeway being built.
I pretty much have done exactly what you are thinking of doing, i settled on my first house at the end of july last year in somerville which set me back $338k, moved in straight away and lived at the property for the minimum 6 months to ensure FHOG was all good, i have now moved out and have tenants which moved in last weekend. In my six months at the property i probably spent half my weekends painting and fixing up the property to ensure its low maintenance etc etc, hard work but should pay off in the future.
Have only just got into researching this investing caper the last month or so and there is plenty of information out there, take a look at this https://www.propertyinvesting.com/depreciation down the bottom are some calulations which i have found helpful in seeing the effects on an income with a negatively geared property, using this information i have run my own calculations on my property which should only cost me approx $5k per year to hang onto, hence why im looking for my second property now.
Also im now 23 and have recently changed jobs and am doing this on approx $55k salary, its do-able from what i can work out. Just look at plenty of properies and also look at the rental market, see what similar units in similar areas are fetching for rent.
Adam.oversteerMember@oversteerJoin Date: 2011Post Count: 2
Just to add my opinion I would be looking more out towards langwarrin, its closer to the monash and its not in Frankston. I grew up in Frankston and thought it was a good place but it always has that stigma about it, everyone knows it for what it used to apparently be like so thats why I would go for Langwarrin. Mornington is nice but value for money, your still buying a unit for the same money as a house in Langwarrin. Im currently in Mount Eliza and love it there but as investments in starting to look more into Langwarrin.
Pick up a house and land as cheap as you can there that might need a bit of TLC and you will do well out of it i think mate, good luck lauriemichaelandre70Member@michaelandre70Join Date: 2009Post Count: 34
Welcome Laurie. hope the members here will be able to answer your query and provide you with the best advice.
Good luck on your purchase and wish you have a happy journey here.