First time property investment

Noooo you do not want to sink your $200k into a giant deposit on one house.  You can purchase 4 or 5 houses with that my friend. 

Get in touch with any of the following brokers that frequent these forums and they will explain why.  Qlds007, Terryw, Jamie M.

JacM is correct, you don't want to utilise all you funds on the one IP property, the higher the LVR you feel comfortable with the better. This will allow you to use your funds for multiple IP's with capital growth potential.

Even if you are looking at only purchasing the one IP property in the short term, the excess money would be better sitting in an offset account where you would still make the same interest repayments, but would give the advantage of allowing you to use the funds for personal use (such as for the purchase of a future PPOR).

Cheers

Tom

Be careful with what you do with all that cash.

As others have mentioned, don't use it all up on the one property deposit – there are smarter ways to use those funds.

Paying off an IP debt as quickly as possible may not be the right option either – there are other things to consider here, such as whether you own a PPOR, plan on purchasing a PPOR in the future or have any other non deductible debt that can be knocked on the head first.

Cheers

Jamie

Not sure why Melb. RPData, and others, are reporting declining vacancy rates are reduced market activity.

I think other markets would provide better investment options at the moment.

http://www.macrobusiness.com.au/2012/12/victoria-to-pursue-austerity/

http://www.macrobusiness.com.au/2012/12/vic-budget-crumbles-on-falling-stamp-duty-receipts/

Vic's been a lame duck for a while now. Austerity will make it a dead duck sooner or later. 

Writing's on the wall. The trouble is most need +4 glasses to read it. I shudder when I see newly minted wannabe PI's looking to sink their hard earned in to troubled property markets. Somebody has to cop the losses I suppose. 

Hi Yoly

Not quite as simple as all that as most lenders wont accept a Term Deposit as collateral security so you will need to ensure your lender will do so and then fully understands what you want to do.

But yes in simple terms use the TD as additional security and borrow the full 100%% of the property purchase price to maximise your deductions whilst you are not living in it.

Cheers

Yours in Finance

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Hi Yoly

Nobody but you can decide where to buy.

Some people are capital growth buyers (buy, hope that the value will increase).  Some people are cashflow buyers (buy property that fetches rent sufficient to cover the mortgage and bills).  Some people expect their properties to be a balance between the two. 

The general things to think about are:

1. Follow the infrastructure.  Look at where the government is doing things like building new freeways or rail, which makes it more appealling to live in the area due to accessibility.

2.  Don't dig yourself in too deep.  No point buying something praying for capital growth to save you if you cannot afford the bills while you are waiting for the growth

3.  There needs to be employment in the area so people can afford your rent

4.  There should be demand.  You don't want to buy into an area that has loads of properties available for rent but not that many people looking for a rental to live in

5.  Try and be within a reasonable commute of a major city or major employment centre

6.  If you plan to buy regional, you generally want to look at buying really close to the town centre.  So no more than a 2min drive away, presuming you get no red traffic lights.

7.  You want places that have things nearby such as a university, a hospital, and a few major employers.

Take a look at the rear pages of the Australian Property Investor Magazine for some statistics to start zeroing in on places you might fancy investing in.

Great advice from JacM