danhendo888Participant@shaz88kJoin Date: 2014Post Count: 1
Long story short, here’s our situation (I am currently living at home, as is my gf. We’re from Sydney)
– We make 1,900 a week in wages after tax
– We have 180,000 saved in the bank
– Our monthly expenses = 1,200 (car loan repayments + insurance, utilities, public transport, lunch at work)
– Monthly rent expense = 2,400
– I work in the CBD while gf works in Burwood.
I need some pointers with regard to what/where to buy and how much I should be borrowing and how much my property price should be roughly.
Any help is appreciate, keep in mind, I am very new to the world of money.SteveParticipant@steve70Join Date: 2015Post Count: 10
First up, as you have done , its all about learning and education. I spent 2 yrs while saving for my deposit learning as much as I could.
You may have already done this, but first up look at what your investment goals are, short , med and long term for example my goals originally where to:
Short – 1 – 3 yrs. Buy my first property in an area where I would have the best chance of max growth so I could leverage off the increase equity to borrow again. As long as I had a health yield, didn’t matter if min neg cash flow, as I was single, good money and no pers debt, I wanted the ability to get more property.
Medium 3 – 7 Purchase in good locations with solid growth, but good yields, I met my wife we had planned to start a family and I wanted the passive income to supplement her income so that she could spend time with the kids and her not work or only work PT.
Long 7+ Was to continue the purchase and with increases in growth utilise that equity for things such as kids education, a new car and of course more properties. With a keen eye on retirement but more so financial freedom (the ability to do what I reasonably wish to do without worrying to much about money)
I was lucky I bought my first IP when I was 20yrs old (23 yrs ago) so time has defiantly been on my side.
From my goals I have worked out which strategy I was going to employ, for me it was 80% buy and hold and the rest in flips. but I took the slow and steady less risk approach. But there are many others which can get you great results. The other key factor and most important resource is time, I was in the ADF then and away alot so I didn’t have the time to utilize other strategies such as developments etc
There are some great advise you can get in this and other forums, and you can learn as much from other peoples success as you can from their mistakes.
So noting your current position work out what your goals are, how much time you can give to this at the moment and the level of risk you are happy to take on. I am a firm believer that your first few IPs should be solid pillars to your portfolio, within 30-35km of a CBD, in an area you should expect good sustained capital growth and they at least break even from a cash flow perspective. But as I have said my experience is only really through the buy and hold strategy.
Learn, learn, learn.
The devil is in the detail, always ask why?Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
Welcome to the forum and I hope you enjoy your time with us.
Certainly not in a bad position to start your investing career but personally don’t put all of you money down on the first deal.
I would try and put down the minimum (which is probably going to be 10%) and keep the balance of your funds in an offset account so they are accessible to you when you need them.
Start out slowly and keep your powder dry as there are many an organisation who will try and take your money off you when you are starting out. Build up a good team around i.e mortgage broker, solicitor etc and leverage off their advice.
Whilst my partner Jacqui is Melbourne based I am personally not sure of the state of the Victorian market and tend to invest here in Qld where i believe you can get better value for money.
Good luck and don’t forget to ask as that is what we are here for.
Yours in Finance
0-40 Properties in a decade. Ask me how.westnblueParticipant@westnblueJoin Date: 2013Post Count: 35
Personally I would pay 20% deposit on all properties either in equity or cash.
When you have 2 or 3 properties it is ok to cross them, just make sure the loan has a switching facility so when your loan security goes up in value you can do a partial discharge and release the second security.
Look for properties that you can immediately add value eg 1 bed unit converted to 2 bed unit or 3 bed house with convertable garage into a bedroom or simply do a reno.
Dont stress too much about having a 80% LVR to start with, over time this will automatically decrease.
I would keep a minimum of $20k aside when starting, once you have 5 or more increase your buffer to $50k and dont use it for investing.
Brisbane market is moving at the moment so you will get some good auto equity.
Always think ahead – after your first purchase ask yourself what the next step will be. If you cant move forward then your stuck, you always what to be in a position to move forward.
Get interest only for 2-5 years, this will allow you rents to increase over that time to manage P&I easily without affecting your lifestyle.
And most important you need a goal, place a monetary figure on it and work out how many properties to achieve that. My first goal was FREEDOM ;)Corey BattParticipant@cjaysaJoin Date: 2012Post Count: 1,010
westnblue – there’s absolutely no reason to cross coll, even if its “2 or 3 properties”. It’s an unnecessary risk and provides less flexibility, just for the sake of laziness/incompetance on the point of the broker/banker.
Dan: Best thing to get started would be to understand what your lending capacity and finance structure required for you to build an investment portfolio. See a good investment based finance broker who can give you an understanding of your capabilities, and challenges you may face etc. From there you can leverage this information against your market research to see what fits, what helps you get closer to your goals, what may be too high risk/not possible at this time.