All Topics / Help Needed! / 22 YO / PPoR or IP

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of AndyProfilioAndyProfilio
    Participant
    @andyprofilio
    Join Date: 2013
    Post Count: 3

    Hi all.

    New member of this forum and this is my first post.

    A little about me. I am a FIFO worker earning 150k a year, as i spend 15 days in central QLD and 6 days home in Wollongong living with my girlfriends at her parents (this is not ideal)

    What am i trying to achieve. My father is 64 and works 7 days a week , From him i have learnt great work ethic, BUT next year he will retire with little to no super with my Mother and will have to live predominately off the pension. This has driven me to want to achieve all my goals. To not work the hard yards my whole life.

    Reading and learning all about property investing has overcome my life ( my partner will second this). I have saved a good deposit and initially my plan was to buy a IP ,have it negative geared, get some experience in the game of life and the added tax reductions was the sweetener. The Goal post have sightly moved since my first plan was made and now i am leaning towards PPoR for me and my girlfriend to live in , rent the remaining rooms out to her friends.

    Thats a little about me, look forward to hearing the views of some greater minds.

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

    Hi Andy,

     

    Welcome and hope we can all help!!

    Very good question you have and also I was in a very similar position to you.

    I am 28 years old but at 21 I bought a my first property, I was living at home (No Rent), No girlfriend at the time and i was working two jobs, So my first choice was buying an IP.

    My 2nd house was different, I had the intentions of moving out so i bought a PPOR and another IP at the same time

    I think you have two good choices here:

    1) Why not look at getting two properties? 1 IP and 1 PPOR speak to a broker QLD007 or Jamie will help you on this site.

    2) It looks like you want to move out? So maybe focus on a PPOR first….

    Cheers

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of AndyProfilioAndyProfilio
    Participant
    @andyprofilio
    Join Date: 2013
    Post Count: 3

    thanks so much for your reply Johann

    lol why not buy two? . great advise but im still trying to overcome my nerves of cracking number 1, from there the sky is the limit to build my portfolio

    but as i said its all well and good to stay rent free and buy the investments, but i think its time i relieve the burden from the parents and start my own journey for me and my girlfriend. 

    i have contacted QLD007 and the more information i gain towards my decisions im sure to let you know how it goes.

    kind regards

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Andy

    Welcome aboard.

    I'm a fan of purchasing a PPOR first and then using it to leverage into property investing.

    If you can find something that you can renovate and add value to, you can get it revalued and hopefully access the newly created equity to use as the deposit/costs on your first IP.

    Ive seen a lot of young couples start out this way.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    How much deposit do you have? One thing to consider in the PPOR vs IP debate is CGT down the track.

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of AndyProfilioAndyProfilio
    Participant
    @andyprofilio
    Join Date: 2013
    Post Count: 3

    Thanks for replying Jamie and Shahin

    as far as PPoR the theory of worst house best street is my primary focus ,as i am not too shabby with my hands and have alot of best mates in different trades in the building industry. 

    The question i still ponder over every night is would it be better to just buy an investment first off ,as i am at home so little of the time with my roster in QLD , do i take advantage of this situation of living away most of the year to accumulate 1 or 2 investment properties,  then after a couple of years use the equity from those as well as the cash i am saving towards the PPoR in the suburb i would want to live in. 

    then that opens the Interest only or principle and interest debate

    to answer your Question Shahin i have $50 deposit saved so far ( and growing and growing as i take my time to plan my strategy)

    what would you do in my position , i know you can never answer ones question for them but hearing how you would approach it may help me develop my strategy and to reach my goals. I always hear people say i wish i got into it when i was your age.

    so how would you do it if you were 22 again ?

    kind regards

    Profile photo of mattstamattsta
    Participant
    @mattsta
    Join Date: 2011
    Post Count: 604

    If you stay away from home most of them time, I would probably start PI first. But you need to decide for yourself-what is the most important thing for you now: have your own house or start building your PI portfolio. Either way good luck to you!

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    You have about 3 or 4 options so do the numbers. For example, you live in the property for say 3 months and then convert this to an IP. This will give you options in terms of CGT but a loss of rent of $6k (lets say $450 per week rent over 3 months). 

    The reverse option is to use it s an IP vehicle day won and earn the $6k but you will be up for CGT. 

    If you have $50k in deposit then you have the option of buying one property for say $500,000. If you are doing this I wouldn't personally go over a 90% LVR due to the LMI premium even though the LMI is tax deductible for the first 5 years (or duration of the loan whichever is sooner).

    Another option is to purchase a property for around $300,000 but only use $30k in savings and go to 95% and use the remainder of the savings to accumulate and purchase another property. 

    This comes down to the strategy and numbers. Talk to your banker, broker and accountant about the longer term strategy rather than the transaction itself.

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190
    AndyProfilio wrote:
    living with my girlfriends .

    Hey, just like Charlie Sheen!

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

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