New Investor – strategy needed

Hi Pru,

I think you have quite a good strategy already without needing to pay someone $700 per hour. Are you looking to purchase a house for that much for a unit? 

Re your question about the deposit – you will need a minimum 10% to get into property. This however will mean that you will pay lenders mortgage insurance when your LVR goes under 80%. This is tax deductible for the first 5 years. LMI premiums skew once the LVR is over 90%.

I would also strongly recommend you do the numbers. By this I mean plug in the rental income and the outgoings and see what the property looks like today and for the next 5 years in terms of Capital Growth and cashflow. This will help you determine the right strategy and in turn property.

Regards

Shahin

I think the important thing to do is get started

I admit I run a mentoring program however it a sideline to what I actually do

Many of these so called experts are salesman, you pay them a fee and they try and sell you a property. Now I know I am being a little unfair. What I am planning on doing is establishing a property club in most major cities and you will be able to come along and gain some knowledge from not only me but other like minded investors. I am doing this because I know that there are right and wrong ways to do things.

Many first time investors lose money because they either listen to the wrong people or do not do any due diligence

HI Joe

At this stage I am looking at Melbourne, Sydney, Brisbane and Adelaide

It is about finding the right people to be involved

Hi Pru

The answer to the question of "When should I start investing" is "as soon as you can".  The reason is that "time in the market" is a strategy that does not tend to fail.  You buy a place for say $200k, you rent it out, and each year you put up the rent.  Meanwhile the value of the property is going up, and eventually the mortgage payments are so small relative to the rents coming in that you almost don't notice the mortgage any more.

Jamie has already indicated that 95% lends are doable.  On a $200k property, that means a $10k deposit, plus as I recall somewhere around the $7k mark for stamp duty.  Is something like that achievable for you in a year or so?

PS Jamie is a very well respected broker on these forums, maybe give him a call and have a chat and lay your plans and timelines so you have some direction and you know exactly what you need to do.