Hi All,
I Have been thinking alot about this lately and still cannot come up with answer of weather i should buy my first property to live in or build a a few units on some vacant land in a good area and then use the profits i make off that for my new home and also start another project after that one is complete i think my second option is prob the best. I will need some advice on how to go about it etc what loan would suit me and even how to go about it etc.
Any help would be great
Cheers
Matt
Hi Matt
I think Steve has an article on here somewhere about the advantages of renting vs buying to live in.
I took the challenge a coulple of years ago after my divorce, to sell my home and rent.
Advantages of renting for me outway the disadvantages.
I don’t have to pay for maintenance etc and am free to move around to take advantage of deals elsewhere.
My long term plan is to be rid of my J.O.B. so renting helps me get there as I am not responsible for a mortgage on a place of my own. It also frees up my cash much more easily. If I owend a place I would only be able to borrow 80%. This way I can use all availabel cash for investing.
When looking at investing, it could be worthwhile deciding on whether you are looking for Growth or Income. By Growth I don;t just mean relying on Cap Growth, rather looking for propoerties that will increase in value in someway, ie basic reno etc. Then the plan is to buy income producing properties that will eventually free me of my Job.
Good luck it is an amazing journey
Regards
SueMIT | Owen Real Estate
Email MeHi Matt
Like Millionaire, I also choose to rent for the same reasons. I am actually paying about $50 pw under market rent for this place.
It gives me flexibility, less debt servicing and DSR impact and with my current place (have been here for 8 years) I am paying a song as the landlord has only given me a total of $15 pw rent rise for the entire duration of occupancy. In return I always pay on time and keep the place spotless.
My goal is to eventually pay cash for my own place using funds from investments.
Good luck in deciding which option suits you best.
All the best…aussie
(formerly giraffe…New Year, New Nick, New Opportunities)
“Real Estate – The Foundations of Wealth”
aussieinvestor | Digital Revenue Pty Ltd
http://appliancewhiz.com
Email MeMatt whilst the points raised are valid one consideration is financing the two choices.
As i mentioned to you 95/100% (or more) borrowing is acheivable when you purchase your own PPOR however when you are looking to buy a block of vacant land and construct UNITS upon the land then that is a different kettle of fish and you will be limited to circa 80%.
Depending on how many units you are referring to other conditions such as pre-sales may be required and as a maiden development the choice of lender will be limited.
Personally i wouldn’t run before i could walk. By all means buy an IP but make it something affordable and maybe renovate it. Start small and soon you will build equity to purchase other more exciting development opportunities.
Another consideration is that dreaded word TAX. If you buy and sell regularly then your profit will be considered as trading income and you will loose the CGT benefits.
Richard Taylor
Residential & Commercial Finance Broker
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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