Hi the name is Josh and i am new here i am looking for some advice and ideas
I have read the four year old property investor, but have not read much more
A Bit of About Me
24 Years Old
Single
Earning 42,500 per Year pay will increase in coming years or will look for high paying job once CA is finished in 2 years.
Live at Home
No Debt
85k in SavingsInvestment Property/ Property to be Rent Out before moving into
I am looking either for a investment property that will allow me to build a portfolio that will allow me to purchase my own home in a couple of years by using the growing equity to fund the purchase, my family and friends not invested in property are advising me to either look at local place that i can rent out to pay down the mortgage then eventually move into or too continue saving and what for when i am on a higher income so that it will more tax effective and less of a strain to meet the repayments on a large mortgage if rates go up.Query about Rocket Property Group
What is everyone’s experience with these guys? Are they any good? I took them as investment advisers and they are advising me to buy a 448k townhouse (3 bedroom, 2 car, 1 study, 2 car spots) in Brighton (56 property lot)(completed off the plan-brighton sands) what does everyone else think (is the number of townhouses going to affect any potential growth i.e. is there to many units to affect the potential growth), while qld and the area seem to be starting too experience my concern is that if the property does not going i may not be able fund another purchase and even so looks at drawing down on equity which may affect cash flow.
Thank You Very Much
Josh
Hey Josh,
Welcome!
You are in a good position to purchase property judging by the information provided. Lets flip it around,
Why do you REALLY want to invest in property? You mentioned you just want to build up a portfolio and eventually buy your own house. And then what are you going to do afterwards?
What is your time frame in achieving this goal? How much exactly do you need to achieve this goal? Answering questions like these will eventually lead to making up a plan, once the plan is done, you will be thinking of strategies to employ to make your plan work.Regarding the suggestions of your friends, im sure they have all the good intentions to help you but without backing it up with facts and figures, i will be cautious of their advices. Although some of their advices may have worked with their other friends or relatives, this may not work for you. Best is to assess your own situation individually.
Regarding your short term goal, ideally you would want to acquire enough investment property to help you fund your PPOR (primary place of residence) and at the same time, help you pay it down quicker (via offset account) as PPOR loan is a large non-tax deductible debt. There are still a lot of things that needs to be taken into consideration. Talk to your mortgage broker about your goal and they can help you structure your finance correctly.
About the Rocket Property Group, I have never heard of them. Have you signed up already with them? Just be careful of this type of group that sells properties from their stocks. They are usually not working on your best interest as they would just want to sell you their properties not considering your plan.
Cheers!
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
Hi Josh
Firstly welcome to the forum and I hope you enjoy your time with us.
You are certainly in a good position to kick start your portfolio with a decent deposit and structured correctly no reason why this cannot be a launch pad going forward.
I have never heard of the Rocket Property Group but I bet my bottom dollar they are a marketing group and the property they have advised you to buy is NEW. Ask them do they ever deal with second hand properties and I think the answer will be No. There will be of course some justification as to why not and it usually covers and explanation about receiving less in the way of Tax deductions. Course it is is all a load of nonsense as the deductions on a new property and one that has already been sold and then resold some 6 months later are almost identical.
Going forward remember you cannot retire on Capital Growth alone. You need cash flow and certainly a good quality second hand property in the right city / suburb will do you just as well. I built my portfolio in Brisbane with cash flow as my main aim and the capital growth followed. Some years later with structure, hard work and a bit of luck I was able to retire more than comfortable and live off the rental income. Drop me a line and I am more than happy to send you a copy of my API interview on my portfolio and how I got started. Might be some inspiration.
My business partner Jacqui (JacM from the forum) runs our property sourcing department based in Melbourne and I think she will give you a better insight into Brighton and the surrounding suburbs. Certainly we are not buying inner city properties for our forum clients at the moment and won’t be doing so in the near future.
Surround yourself with a good team and reach out to them to work with you on your property journey.
Good luck and don’t forget to ask if you have any questions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Off the plan property sold through an intermediary, suggests commissions. Also just make sure these ‘investment advisers’ actually have a Australian financial services license. As without it, they are not allowed to give you personal strategic direction on anything, including property product.
I’m with PHP & Richard, older property in established markets, with value add is the most strategic path as a starting point. Stay away from attached dwellings due to the additional holding costs, which will suck up your cash flow. Also don’t count tax returns as cash flow either, as depreciation benefits don’t last forever, nor will the returns be particularly tangible given your current wage, making the property expensive to hold.
Richard | PPI Investment Advice
http://ppiinvestmentadvice.com.au
Email Me | Phone MeLicensed Property Financial Advisors providing tailored property advice and solutions!
Thanks for the advice note the property was negatively geared and only became cash flow positive after depreciation. As the property location it is in QLD (20-30 km from brisbane cbd) and was nearly completed projected to be completed within a couple of weeks. While there is a rental guarantee of 470 for the first year, this feels like something developers place in order to get people to buy places quicker (not absolutely sure). i look at the area and see old properties with much more land which may need repairs and maintenance and offering at the same or a smaller price (i don’t know if this a large red flag – not that i intend to buy old). When i raise the holding costs and the negative cash flow the advisors say in a manner of speaking that the rental guarantee provides security, that several of them have invested in the area and that it has capital growth potential (still i feel that capital growth of one property among 56 will be spread heavily across all the properties affecting ability to redraw to buy more- also that will only lead to further negative cash flow before tax if a redraw the equity and buy another property.
The only thing i did was put a holding deposit of 1,000 down and i have not signed anything and i am thinking that i will ask for the deposit back and spend some time done doing some more research reading a few more books before looking to buy early next year so i can concentrate on my CA course exam for December.
Any Further advice is greatly appreciated
thank you very much
Josh
Hi Josh,
there is a rental guarantee of 470 for the first year,
That is one amount that you will have paid for in the price, for sure.
But right now, the BEST thing you can do is to check comparative units in the same area (not in that development) and see whether $470 a week is “about right”.
If it is way over the mark, that sends you a very loud warning. Just think ahead to “what happens after 12 months?” And, how positively geared would it be if the rental used were the TRUE amount? Hmmmm…..
Benny
That is one amount that you will have paid for in the price, for sure.
Exactly!
Rental guarantee = alarm bells (very loud alarm bells)
Caveat Emptor.
Cheers!
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
Hello,
New here too.
You don’t necessarily need to buy property through “a group”.
I’d suggest you look at buying in the best area possible for your money.
Buy a House with Green titled land, within 15km of the city.
It will look after you in the long run.
You don’t necessarily need to buy property through “a group”.
Agreed. A group = middle men making a commission which has to come from somewhere.
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]
From my experience old property doesn’t have to translate to higher maintenance costs. In QLD we have QLDers (postwar weatherboard), if you apply the right buying processes, ensuring the dwelling is sound then holding costs can be minimal.
This way you can prioritise the location, radius to CBD, rather than paying so much for the dwelling out in the sticks.
Richard | PPI Investment Advice
http://ppiinvestmentadvice.com.au
Email Me | Phone MeLicensed Property Financial Advisors providing tailored property advice and solutions!
Consider also, you are one of many investors being sold into the same product, right next to the other 100 dwellings in the development. This means widespread rental properties; one after the other. This will segment the demand for this type of product as you will loose the ‘owner occupier’ driver for capital growth.
Second, you’re in a mortgage belt. All the surrounding properties are likely to have 100%+ debt on them, bringing interest rate risk into the equation. Obviously the current interest market is very low, but it wont last forever. In future when they increase rates, there is potential for the majority of owners to feel increasing financial pressure all at the same time. Potentially leading to broad discounting across the area. Meaning the values can drop quickly if the market competes to sell.
hopefully this making sense, its more easily addressed in conversation, rather than via these posts.
Richard | PPI Investment Advice
http://ppiinvestmentadvice.com.au
Email Me | Phone MeLicensed Property Financial Advisors providing tailored property advice and solutions!
I would jump on to realestate.com can check out how much similar/comparable properties are selling for and renting for then base your decision on what you find. If price and rent is comparable should be ok
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