Hi people,
I was just wondering how do you get started with this property investment? I just finished uni and i am extremely interested in this industry. I was thinking on buying property, renovating it, and selling it in higher price hoping the i can pay the debt to the bank and hoping to get some cash out of it? what is the savest way doing it? please can anyone help me…
What you are talking about there is "flipping". Widely glamourised on tv, but a little harder than you think.
Make sure you do it in a rising market otherwise you will end up doing a lot of work for little profit. If you buy, renovate and sell within 12 months of purchase, after buying and selling costs have been factored in, you will pay Capital Gains Tax on the whole profit, at your Income Tax Marginal Rate. If you sell after 12 months, you will only be taxed on 50% of the profit, but then you have holding costs to consider.
The other major factor is finance. It's very hard to get good finance without any savings or without a work history. Maybe a Lo-Doc loan, but with higher interest rates, Mortgage Insurance – these cut into the profit as well.
I suggest you get a job, start saving like mad, watch the markets so you know when to buy and get very educated about property investing through books and/or forums. Some seminars are o.k – not the $4,000+ ones. If you see a seminar you'd like to go to; ask us here about it and we'll give you the heads up about it.
Maybe source a professional flipper or trader, spend some time with him/her and learn the secrets first.
Hi hfat
it’s great you want to start investing now while you’re still in your early 20’s… smart thinking!
There are a lot of good books base on investing in Australian residential property.
Visit your local Library borrow some books and start from there. Just make sure they were written recently so they are still relevant.
Don't get over excited, you want to learn as much as you can before you put any money down ,
take your time ask lots of questions and don’t try to sprint before you learn to crawl…
Like a lot of things in life you first gain knowledge and understanding THEN you go out use what you've learned gain some experience…. And then keep learning and doing.Good luck and welcome to the site !!!
Best advice I can give to new starters is this:
– Set ONE goal to start with
– Start small.That is, write down something to the effect of: This year I want to buy an investment property. I will spend up to (say) $200,000.
With a goal statement like that, you have something to work towards. When you have something to work towards, that's when you know what information you will need to get where you want to go. Knowledge is power only when it helps go where you want to go.
When you acheive your first milestone of buying your first property, then set another goal. Only this time, your goal will most definitely be bigger, better and more challenging; and you'll be up to it because of the experience and confidence gained from buying your first IP.
One step at a time…..that's the only logical way!
Good luck.
Michael.
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