Forums / Property Investing / General Property / First time property investment

Viewing 20 posts - 1 through 20 (of 28 total)
  • Profile photo of YolyYoly
    Participant
    @yoly
    Join Date: 2012
    Post Count: 5

    I'm a 27 year old carpenter from Melbourne. Who is currently working in the mines in W.A in civii construction. My weekly income  rounded off is around $2,700.

    With a saving of around 8/9 grand per month.

    I'm hoping to buy my first property in the next few months. As a pour investment. I have a deposit of $200,000

    Iv been looking in the suburbs around Diamond Creek/ Greensborough as they are quite affordable.

    As I don't really want to borrow more then 300k. So I can smash it out. And continue buying more property 

    Would be great to get some advise and other strategies  as I'm new to the market. And to see if I'm on the right track.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    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.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681

    Why would anyone want to invest in Vic?? State govt is pushing austerity measures to shore up a shrinking revenue base and property is sinking like a stone.

    Keep your money in your pocket. This is not the time to buy. Watch and wait. 

    Profile photo of PLCPLC
    Participant
    @plc
    Join Date: 2012
    Post Count: 400

    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

    PLC | Phoenix Loan Consulting
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    Melbourne based Mortgage Broker | Making Finance Simple

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Yoly as i mentioned to another forumite in a separate post why wouldn't you borrow 100% of the purchase price and place sufficient funds in a Term Deposit to act as collateral security.

    This way you get to maximise your interest deductions yet keep you funds fairly fluid.

    If you eventually decide you want to pay down the loan (for some reason) you would have the Term Deposit released and recuce the principal balance.

    Cheers

    Yours in Finance 

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,065

    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

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of jmsracheljmsrachel
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    @jmsrachel
    Join Date: 2012
    Post Count: 711
    Freckle wrote:
    Why would anyone want to invest in Vic?? State govt is pushing austerity measures to shore up a shrinking revenue base and property is sinking like a stone.

    Keep your money in your pocket. This is not the time to buy. Watch and wait. 

    I’m really beginning to see what you mean. It’s not getting any better any time soon.

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    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.

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    What is the government trying to do now? 

    I heard something on the radio….

    The melbourne market is very quiet , I went to two auctions in bundorra not  to far from diamond creek an there where only two other people. 

    Then rental yields in Melbourne are pretty low and also there is not much  incentive, I believe the next couple of years will present some interesting opportunities. Interest rates are low and people out there are struggling, with poter, water and rates going up there will be alloy of homes on the market.

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of YolyYoly
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    @yoly
    Join Date: 2012
    Post Count: 5

    Hi JacM,

    thanks for your post, Will defiantly look into these peolple  

    Profile photo of YolyYoly
    Participant
    @yoly
    Join Date: 2012
    Post Count: 5

    Thanks Qlds007,

    At the moment I do have my savings in a fixed term deposit. Witch actually will mature on the 26th of this month.

    So your saying keep doing what I'm doing.  And borrow the hole amount of a property. And use my saving as a security.

    There are some people saying just to hang on to my savings as its not a buyers market and to just keep it in a term deposit.

    What are your thoughts on that. For tax porpoises I would think buying in most  market would still be a good thing? 

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681
    Jpcashflow wrote:
    What is the government trying to do now? 

    I heard something on the radio….

    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. 

    Profile photo of PrimePropertyInvestorPrimePropertyInvestor
    Member
    @primepropertyinvestor
    Join Date: 2012
    Post Count: 48

    Hi Yoly,

    It is great to hear that more and more people are getting on property leather – well done. 

    I would agree that it is not profitable for you to invest all your money in one property, as it is quite common problem these days that investors run out of their cash and give up on expanding their portfolio. 

    I would suggest you to invest in area that you know well and you are confident in.  We invest in London aprox. 10 minutes to 1 hour away from our home.

    Good luck on your journey and keep us posted how you are doing :)

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    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

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of YolyYoly
    Participant
    @yoly
    Join Date: 2012
    Post Count: 5

    You suppose nothing /Wannnabe?. Thanks for the support there freckle. Well just to refresh your narrow mind. I came to this forum for advise. Not lame negative dribble. Happy to hear your advice. But with out the kiddy humor 

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539
    PrimePropertyInvestor wrote:
    property leather

    ?

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of YolyYoly
    Participant
    @yoly
    Join Date: 2012
    Post Count: 5

    In terms of then buy the right IP. What type of price range should I be looking at. Also people say that melb isn't the right place to be looking. I woulnt know where else I should be looking then 

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    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.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of FreckleFreckle
    Blocked
    @freckle
    Join Date: 2012
    Post Count: 1,681

    Yoly you're a big boy now. A pocket full of cash makes you ten foot tall and bullet proof in the big ol' world of property investing. You don't really want to listen to people like me because I'm the one dissuading (or trying to) from reaching that goal of being a property guru I mean investor.

    99.9% of people here will slap you on the back and say go for it. Many are industry professionals and very experienced. I couldn't recommend better people for the knowledge you seek. 

    My point is not what, where or how to buy. My point is should you buy at all. Global economy is stuffed. National economy is in trouble and getting worse. Property market is reflecting that difficulty in sliding values. Metaphorically speaking you can't even tie your shoe laces yet. 

    I'm not interested in supporting you. I'm just giving you a warning. Keep your money in your pocket and wait. And while your waiting watch and learn as much as you can. 

    If you choose to ignore this warning then you almost certainly will be one of those wannabe's holding the bag. No supposing at all.

    Profile photo of JPS25JPS25
    Participant
    @jps25
    Join Date: 2010
    Post Count: 121

    Great advice from JacM

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