hi there
Im somewhat new to investing and live in the north coast NSW. i have a deposit and eligible for fhog. There isnt much around where i live, much of which is overpriced and the best deals i have seen is in Grafton South, one in particular a property i could buy, make slight renoations to and make a 7-9% yield on the rental return. There seems to be alot of opportunity in this town for good rental return and the the capital gain average has been 14% for the last 10 years, not great but better than nothing.
The reason why im posting here is that im getting alot of stick about grafton more so from my family who think i should forget about the fhog, purchase up near brisbane (3 hours away)and negative gear for capital gains. It seems to me that the way to build wealth and get out of my job would be to secure positive cashflow property so i could build a portfolio? i understand that its a low socioeconomic area but wouldnt it be better to have a hundred a week in your hand in cash and have the banks continue to lend to you rather than have half your salary eaten up by a mortgage and prayers for capital gains?
Thankyou for any advice
The cheapest commodity in the world is advice. It is freely available from everyone. But the most expensive advice is the advice you get for free from your friends and family.
Firstly, ask yourself if they are extremely successful investors. If their not then you can quickly disregard what they are saying. They are advising you out of fear of the unknown not out of a true investment education.
YES! I do believe it is better to have $100/week paid to me instead of $100/week that I have to pay. Even if the area is more rural. Just make sure you get good insurance and a good rental manager.
In regards to the FHOG, you have to live in the property for 6 months within the first 12 months. You can't use the FHOG for an investment. If you do then it is technically fraud….so be careful.
If you can get in the game and get a positive cash flow property then you are going to learn so much and your 2nd and 3rd investment will hopefully be even better than your first investment. Then your family will be coming to you for advice
Ryan McLean
CashFlow Investor
Read my blog post: 20 ways to save the deposit for your house fastRyan McLean | On Property
http://onproperty.com.au
Email MeMike .. as an investor i do the same thing I do in business.
Take a group of up to 20 opinions .. <moderator: delete language> .. work out whats worth gleaning from the knowledge .. and discarding the rest.
So taking on family opinions is about .. listening to whats being said .. seeing if some or any of it applies to you .. and discarding the rest.
Unless you are a super dooper instant out of the box investor … I wouldnt be rushing into anything until you've done your homework.
The best example of that from my perspective is people i knew who highly recommended Ballarat. I looked into the actual figures and saw that the town wasnt moving both in price and opportunities. So where was the growth going to come from? As it stands .. long term figures on the town have proven me right.
There are lessons you can learn the easy way or the hard way. The hard way costs both money and time. Money takes time to work for and time is always at a premium. So if you do your homework based on OTHER people's money .. and other people's experiences .. you are putting yourself in a better position to prevent loss making decisions.
I would ignore the FHOG as any part of an investor decision, unless you are prepared to turn the property into a PPOR for at least the required six months. Even then take on board the requirements you'll need for getting full value out of such a situation.
Grafton South has problems. Tamworth has problems. Taree has problems. Once you know what these are .. the questions are more .. can these problems be solved? Will they be solved within your lifetime? Moe, Morwell and Traralgon all had problems for the past 40 years. Thing is .. if you look now .. one of them is picking up. Which one? I'll leave that for you to investigate.
Horsham has issues. Stawell is dead. Denilliquin is picking up, but its from a very low base. With all of these places there are potentials for revival .. recovery and renewal. But there has to be the will and effort from government and population to do something positive.
Build your wealth portfolio on quality and reliable returning properties. Assess your risk factors. Find solutions to problems and you may turn properties and even areas around.
Thanks for your replies, i appreciate it
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