Hi all,
Let me start by saying as my first post I apologise in advance for looking for a good deal of advice. I’ve been a member of forums for a long time and know it is often frowned upon to come in straight off the bat and jab people for answers. With that said It’s my only option right now as I’m largely unskilled in property investment and thus have little to offer to those also looking for help. So with that said any advice/help would be greatly appreciated.
Background: I’m 26 and have always taken to the idea of property investment. Where I have grown up (South-East Melbourne) property has forever been an enormous wealth creator for a large number of adult people in my life. I’m a hands on individual and reasonably skilled with tools, have always worked a physical job, in other words I’m more than happy to renovate. I do realise at the moment I’m time rich. I do work full time however I have weeknights/weekends free to renovate/add value to a property.
My Goal: My long term goal would be to retire at 40/45 while being more than happy to maintain a property portfolio. In saying that and knowing myself I’m guessing I’d likely keep working but I’d be happy to deal with that problem if it ever came along.
Right now I have roughly 100k to play around with as capital. For the best part of 4 months I have been looking at houses around the bay, specifically from Chelsea through to Seaford, maybe for those that don’t know they’re next to Frankston (if that helps). This was inspired as it’s somewhere I picture myself living down the track, family etc…as well as that to me it seems like a good investment with large growth potential. I’ve been searching for good sized house blocks with semi decent homes on them with the idea of doing them up to some extent to either live in or rent out. There lies one of the problems, I’m unsure whether I’d continue to live in it or move closer back to where I live if it’s smarter in regard to investment. Either way the property would be negatively geared from the get go so I would be tipping money in to supplement the rent for some time to come.
There basically lies my current situation and predicament. I’m now questioning what to do. I’m contemplating whether to go ahead and have to tip money into something, or on the other hand just as an example, look at a rural property that has better gearing potential that I could still add value to and then move onto the next.
If anyone has any thoughts or suggestions they would be greatly appreciated. Even if it’s ‘hey, read this’ or ‘look here’ that would be great.
Thanks in advance
Negative gearing means you are losing money. Putting money into anything with the plan to lose money is not an investment, it is always a planned loss and not something that makes sense to me. With 100k in the bank and a job then I would think about getting a small mortgage and paying off a house. Spend your time doing up the house and adding value, then sell at some point in the future, or keep yourself a better home.
At the moment most renovator properties are selling for the same or more than brand new property. Unless an old property sells for less than a new property, I struggle to see the benefit in renovating or purchasing an existing property.
However, I would be extremely cautious buying any housing at the moment (have a plan B if you lose your job). You may be better saving for a while longer, watching the market, and buying something with cash.I should also add that there may be legal issues related to property renovating and investing. Seek paid independant legal and financial advice.
Hey ButchCassidy,
Welcome to the forum, now sounds like you got yourself to a really great position and really are unsure on seemingly a stack of different avenues, I would firstly like to offer to have a chat and I can answer any questions you have in a fair amount of detail, Im a qualifed Financial planner, Mortgage broker and real estate agent and can answer a fair amount of points and no there in no catch or obligation in any way, Happy to help
Jaxon – 0431376130, feel free to txt me your details and Ill plan a time to call.Now In regards to answers your question of where to go from your current situation I would like to explain you got the starting point down it seems,
you know where you currently are :) this is actually great!
now you need to plan what your end goal is and how you want to get there?
so for instance lets say its the typical but good answer of 100k a year in income from your properties, if your portfolio earns 7% that means you need around 1.5mil owned of your property portfolio.that means you could buy your PPOR (home you live in/ Principle place of residence) then build equity and use that to buy more and more.
you could start getting IP (investment properties) and look for under valued, postively geared (cashflow) properties and strategically purchasing them to add/gain equity and build it that way
or purchase specific properties with the intention of adding value by reno or town planning or rebuilds etc, this is a very specific task and takes a large amount of knowledge in most cases
or one of the many other options but I think those three are the ones to look at and study and understand.
In regards to specifics etc, as I said, I am happy to have a chat and hopefully provide some clarity.
Have a great week.
Kind regards
Jaxon Avery
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
You must be logged in to reply to this topic. If you don't have an account, you can register here.
