I have never bought a house before I would like to start, I dont have much money to play with I only have 140K any advice on what area. I was looking at Goomeri area, as i thought not far from bigger towns. I really need help on where to start and what research I should be doing on the area, what to look for. Thanks
140k in deposit?? or borrowing capacity?
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Wow if you saved up 130k I am impressed!!!
I wish i had that much deposit, I only have 130K-140K to spend all together on a property, now you make me feel sad thats all I have to spend.
umm with a low borrowing capacity, i would personally wait till you can borrow a bit more, no point rushing; there are “cheap ” properties out there but it doesn’t mean it’s worth it…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
You build your asset base with bricks. The first property you buy is actually the most important and for this you need to make sure you get your decision making right. It sounds great to get a property in an area like Goomeri .. but its basically a reasonable distance from where the action is. As long as you remember that property is a social transaction you'll make your best business decisions. Think 5 years ahead .. not 10 or 20. If you cant envisage immediate or near term growth on the investment with the right conditions .. then you are investing for the wrong reasons. Investment in property should never be off-the-cuff speculation .. it should remain educated and researched guesswork.
Your first property needs to be a property with regular and consistant tenancies (you have no room in your budget yet to cater for extended vacancies), and quality tenants. It also needs to be a property that will receive some format of capital appreciation without the need of inflation to do the dirty work. If you find yourself relying on inflation to increase the value of your property .. you are investing in TIME. And whether you are 22 or 130 … time you wait for a property to come good is still time wasted from your life.
Social areas mean you need to invest in a hub. A lively hub .. a place with good transport .. a couple of decent restaurants .. a shopping facility within 10 mins drive .. and a convenience shop within 8 mins walk.
140k max will leave you with either country houses .. or near-urban units. But … we also exist in times where your dollar buys more. May I suggest you try negotiatiing with vendor terms ? You might be able to score more property for less money. At this point in time there are lots of lovely deals to be made. I just purchased a 170k 3br house returning $250 p/w .. because i had enough equity in my properties to draw on .. i put 3% into the deal and borrowed the other 97%. My investment seems rash .. but the overall borrowing from these properties is a healthy 40/60 (40% me 60% bank) so .. I'd need a drop of 30% before the banks get twitchy. Work out the quick maths .. and the whole deal costs me $15 a week to run out of my pocket ($35 including water and rates). Thats chickenfeed. Could have been positively geared too, but i needed the loss
That was a month ago. If you can envisage deals out there .. go seek them. They not only exist out there .. there are willing vendors who will do negotiated deals to get the banks off their back. A sale is all about negotiating a win-win for both parties. Be the negotiator and win more deals.
Shape wrote:umm with a low borrowing capacity, i would personally wait till you can borrow a bit more, no point rushing; there are “cheap ” properties out there but it doesn’t mean it’s worth it…Regards
MichaelMichael’s right and you have all the time in the world. The global economies are in a real mess and cash is king. The big crash hasn’t started yet but when it does don’t expect Aus property to be exempt. We’ll cop it just like the rest.
Now’s not the time to buy anything especially if you’re a newby. Very few here know how to play a falling property market simply because we’ve not been down this road since the 30’s. The new paradigm in PI will not be about capital gain but cash flow positive investments.
ROI through positively geared property will be the new focus because the settings for high capital gain returns will have been reset back to pre boom time parameters. The likely future scenario is for property to correct back to long term trend values. Initially we’ll get an over correction which will in all likelihood take around 5 yrs to wash out. That will be your buy in time when property values have overshot to below trend. Long term capital gain growth is not likely to exceed the inflation rate (which is the long term trend line) for some decades. It took property almost 20 yrs to regain pre 30’s depression values.
Another elephant in the room is how interest rates will play out. It doesn’t look good for property. The EU, US, China and now the UK are getting ready to print more money. That’s a major problem for us in terms of inflation and is a double whammy as our dollar falls. It’s going to be hard for the RBA to cut rates to stimulate our economy when inflation is rising to what may be relatively high levels.
There is absolutely nothing on the economic horizon that even remotely looks positive for property. Quite the contrary.
Jack
Thank you for your thoughts, i will keep in on board. Thats interesting that you think houses are still going down in price, maybe I should wait.
Some areas it has. Had a client buy a place in COMO WA 6152 for $350,000 in 2007 a 2 bedroom unit.
Got a recent bank valuation of $325,000 — and now it’s on the market to be sold for $360,000
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
charlitayla wrote:Thats interesting that you think houses are still going down in priceWhat you’re seeing at the moment is just the beginning. It’s the consequence of a very nervous public who see big trouble on the horizon. The slow side of our 2 speed economy ie; anything not related to resources, is under mounting pressure. Our high dollar has kept inflation at bay but hampered exporting (except resources). As the dollar comes down expect to see inflation rise and consequently more pressure on household budgets with an accompanying rise in mortgage stress. Everywhere you look all you see is downward pressure on property prices. There is nothing out there that indicates that pressure will ease anytime in the next few years. If anything things will get a lot worse before they get better.
Quote:maybe I should wait.Good idea
It’ll give you time to better assess the landscape, improve your knowledge and increase your financial firepower.
Jack
Thank you for all your help, it has really made me think. I need to gain more knowledge and more money.
Also does anyone know of any free seminars around the Sunshine Coast region, that would be good to go to.
charlitayla wrote:Thank you for all your help, it has really made me think. I need to gain more knowledge and more money.Patience!….. the most important skill you’ll ever learn in investing.
I have always been worried about getting something before the next boom. as I watched it boom over night last time. Good advice patience is something I lack.
To be honest i tell all my client who are new to property investing NOT to go to seminars; as they will get suck in and their mind set would be different …i say speak to family and friends, do your own research in areas you know ( NOTHING beats local knowledge) ; only you would know which streets are bad, where the local attractions out are and what sort of changes are happening on a macro and micro level….
For your first one; try not to buy interstate + buy within your reach and region. Be more hands on…go for a drive! talk to the locals at the coffee shop and the agents.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
charlitayla wrote:I have always been worried about getting something before the next boom. as I watched it boom over night last time. Good advice patience is something I lack.It is highly unlike you will ever see in your lifetime a boom like the last few decades. We’re coming out of one of the largest credit bubbles in global financial history and boy is it gonna hurt!!
Jack
Perhaps the best thing to do would be to go through the process of seeing what you can afford which may determine the area you look at based on the returns and growth in different areas. Not withstanding the comments made, at the end of the day it is all about the numbers particularly in regard to investment properties , of course buying your own home is a more personal transaction and takes into account many factors. <moderator: delete advertising>
Mark O'Donnell
10 /1020 Doncaster Road, Doncaster East Vic 3109 | http://www.acceptancefinance.com.au
Tel 1300 654 355 |Direct 03 8841 4411| Mob 0414 470902| Fax 03 8841 4488I think the most important thing i can add to the conversation on this .. is know your market before you head into it.
It can be five days research .. or five years depending on how much you need to know. But do the research .. and you can establish the market demands .. and thats where you will make your money. Because if no-one wants your property .. no-one will buy it.
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