Hey guys,
I'm 20 and have always being interested in real estate. I have saved up quite a bit of money for a investment property. At the moment i'm stuck between two, one a unit in Penrith and a block of land in a rural area called Lithgow. The land is extremely cheap but then yet again so is the unit. Although its quite old and looks like it would need a bit of work in a couple of years. The return is 0.067. Should i just go for the old unit with money coming in or the land???
Cheers tony
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hi Tony,
Without understaning what your end goal is, it is very difficult to offer an opinion. Have you sat down and put pen to paper and worked out what you want to achieve in 2, 5 and 10 years time? This is not a backhanded comment, but a very valuable way to make sure all of your plans fit in with your expectations. The more certain you are with your goals, the more you can concentrate on what investment suit that and minimise those that you regret. Once you have worked this out you will be able to see how each property would fit in with your overall goals, and then it will be clear which one is more suitable
I assume that you are intending to rent the unit, so a few things to throw into the thoughts
– interest on the unit is tax deductible, it is not on the land (until it is sold, then all expenses are used as a tax deduction).
– Land tax is different in the two states
– dont forget to factor in caouncil rates, insurance etcAll the best
Mick
Hi Tony,
Welcome.
There's a difference between investment and speculation, although a lot of people can't really tell the difference. With an investment you are buying an income. With a speculation, you are putting some money down in the hope that it will become more money at some time in the future. This amounts to 'taking a bet'.
Whether one is better than the other is up to the individual. Think about it though, one of your options is an investment, and the other is a speculation – a bet. Which are you most comfortable with?
Both will cost you money every month, so in that sense even the Penrith unit has a bit of speculation about it, because you'd only put money into it each month if you thought it would increase in value later on, right? So, even though it's an investment, the question is whether it's a good enough investment for you to buy.
Keep in mind that you have a 3rd option, which is to keep saving and researching until you find a property that's a great investment. That's the one you should go for. You're doing great already with your savings accumulating, keep going!
In the meantime, read some books and think about whether you'd rather go for investments or speculations.
Daedalus.
Are you a farmer ? Then go for the rural land
Are you a gambler who likes to lose a lot of money ? Then go for Penrith
Are you a smart man who likes to save money ? Then do some research before you invest.Even doing some BASIC research like looking on http://www.news.com.au or turning your television on will tell you that investing in property now is risky and dangerous.
My tip : learn to use Microsoft Excel, and take a quick lesson in elementary economics and mathematics.
Then at least you have a small chance to not go bankrupt rightaway.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
