Hi everyone
Just looking for advises on what the best strategy is to start investment property. I am now 24 and looking to invest in a property but not sure if i should get 1 bedroom unit, 2 bedroom unit, or share mortgage with my brother to get a house + land.
Thought that buying unit probably will be better as it is within my budget and i can get rental income but not sure of what suburb to choose. Currently looking at Hillsdale (Eastern Suburb) or Dolls Point (St. George) but Hillsdale doesn’t look like it’s growing as fast as Dolls Point and its surrounding area. Anyone here lives around these 2 areas? Dolls Point unit prices are around 50K higher per 2 bedroom unit than Hillsdale. Another thing is if i buy land +house and share it with my brother, the capital gain is much higher whilst unit only goes up by much less. Not sure which one to choose from ?!?! but we can only afford those land+houses that are futher out of the suburbs…like Blacktown and etc..would they be good?
Thought also of buying a 1 bedroom unit in hope of renting it out but people say that 2 bedder will be much better to invest as it would be easier to resell in the future. Buying 2 bedroom though would increase my mortgage and every month, my loss from rent will be much higher than getting a 1 bedder meaning less savings every month…?
What should I do? which one do I pick? and with the whole stamp duty and first home owner grant all going away…not sure whats going happen next year? Feel like rushing into the property market but I don’t want to miss out on this great savings.
I’ve already lost $700 bucks for putting a small deposit for an offplan site around Macquarie Park which wont settle in the next 2 years… thinking that saving up for the next 2 years will not make me better off than investing now and started getting the rental income and tax benefits today.
What do you all think?
Hi lil
Welcome to the forum and I hope you enjoy your time with us.
Wont comment on what may prove to be a better long term investment but would suggest you think twice before buying with a family member. Wont might sound good now can easily come unstuck if 1 of you wants to release equity or buy a property individually as you will be considered as jointly and severably liable for the entire debt.
Last thing you want to do is end up dumping the property as one of you wants out.
Personally i would buy myself, start small, structure it correctly and go from there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi lilhazel,
I'm not familiar with the two places you mentioned but have a look at what type of people live in that area. If they are a lot of singles, you might be best off buying a one bedder. If it's mostly young families, they would want a yard etc. You should also do some research on population growth and ring up a few REA to see what type of rental properties are in demand.
I totally agree with the previous comment posted by Richard.
Don't overextend yourself financially just because people around you are saying 2-bedders will sell better.
My personal opinion only but I think given the global uncertainty and seeing people being made redundant around me, I think it's good to start small and have enough set aside for savings too.
I also think start small and do what is affordable and achievable.
You wouldn't want to have a negative first experience.Thank you all.
Personally i would buy myself, start small, structure it correctly and go from there — Richard, how do I ensure that I structure it correctly ?
lilhazel wrote:Thank you all.Personally i would buy myself, start small, structure it correctly and go from there — Richard, how do I ensure that I structure it correctly ?
Hi there
Using a broker that knows what they’re doing will ensure the correct structure is set up. Richard will be able to help.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
do you think i should start small from a 1 bedroom unit then? since the price for this one is in my budget and i can afford quite comfortably?
I would recommend hillsdale, as matraville and infrastructure surroundings will make 2 bedroom units a minimum of 500-600k by 2015, its still possible to pick these up at 360-420k mark, renovate them a little , live in for 6 months then rent out for upto 5 yrs and take tax advantages, go for it!
lilhazel wrote:Thank you all.Personally i would buy myself, start small, structure it correctly and go from there — Richard, how do I ensure that I structure it correctly ?
G’day lilhazel!
Welcome to the forum.You’ve a lot of questions and there’s a lot to learn. Have you done any reading about property investing? There’s lots to find out and there are some great books available for you (check out authors like Margaret Lomas and Steve McKnight – Steve runs this forum). There are also free podcasts you can listen to (we make one – see the link below) and there are two major property investment magazines you could buy, although they don’t necessarily help you make the first tentative steps into the property investment world.
I hardly knew anything about property when I started, and I was lucky that the I bought at the right time. I believe that the market isn’t going to boom for a little while, so you have a little time up your sleeve to get educated.
Nevertheless, I reckon it’s a good idea to start small. A portfolio with a few smaller properties is a far better way to spread your risk than one big property, and you can start earning faster with smaller properties. Often, smaller properties have higher cashflow than larger ones do too!
Hopefully this helps. Check out those books, our podcast (it’s free) or some magazines.
And good luck with your investing!
Hi everyone
Thanks for the advices. I have decided to buy a 2 bedroom unit around Dolls Point area. It’s 5 minutes walk to waterfront and it has a very nice residential feel to the suburb. The air feel great, the grasses feel great too !! lol . It’s a walk to bus stop and one bus stop away or 15-20 minutes walk to Coles and etc. Got it on the last day of 2011. phew! Now, I have to get ready for the settlement with 6 months of living in it and renting it away for the next ongoing years until they go up in prices. THANKS EVERYONE !!!!
Have an awesome new year ahead !!!
Well done on making a decision! Hopefully it will make you prosperous for the new year.
You had mentioned that you were thinking blacktown – I went to a property seminar where they were talking about the potential of this area. I may think of looking at the properties there myself
all the best!
Hello lilhazel,
Slow down mate….we are not in the buttom of the market nor on the top of the market either.
I say this to newbie investing in property, get your education first. Attend few seminars and read a lot of books.
Why attend seminars and read books???? That is where you will learn the fundamental of investing in real estate.
Investing in real estate is not rocket science BUT you will need to learn the fundamentals the basics.
It is best to learn investing in the right way rather than reimvesting the wheel…….don't need to go with trial and error…someone has already shown the road to everyone.
Spend few months reading REI books..educate yourseld IT WOULD BE THE BEST INVESTMENT YOU'LL EVER MADE, INVESTING IN YOURSELF…some good authors where mentioned above are predominately Cash Flow Positive advocates. For CG advocate get some Michael Yardney's books. For managing your IP, check out Barnes and Doidge.
Once you've starts gaining the knowledge you will find the answers to your questions.
Goodluck
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