G'day All,
Some brief background information
20 years old, live in Western Sydney, currently studying full time and working full time.
I'm interested in investing in property and have been told by a number of people that it's a smart thing to do and the younger the better. Enough of that.I've had discussions with a few people I know about how to get started and strategies to follow etc. At this point in time I am looking to simply get in to the market quickly (possibly in around 12 months). I've been told to research good areas, find properties with potential for development and high rental yields etc. etc.
I appreciate this advice and wish to make the most of it but the problem I'm having is simply that I can't wrap my head around it at the moment. I feel like I need to read at least one good book to understand what to look for in an area, which property investment strategy may be best for my 'personality' (how averse to risk I am) and also my financial situation. Hopefully once I have this information I might be able to make more informed and intelligent queries.So, in brief, may someone either:
A) Point me in the direction of 2-3 good titles on beginning to invest in property (there seems to be so many titles out there, I'm wary of picking one myself).
Perhaps give me some pointers or advice on how to look for property and locate a good region.
I seem to understand what makes a good region (high demand for housing, close to amenities and transport, potential for development) However I'm not sure how to look for areas that have these qualities!Pardon my long winded post, and thankyou for any advice that I get.
G'day Television
Read the classic "Rich Dad Poor Dad" and other books by Robert Kiyosaki to get some theory and mindset. If you'v e already done so (I I suppose you have) move straight on to #2…
Read John Burley's "Australia's Money Secrets of the Wealthy" to get an overview of a bunch of strategies and a lot of practical help. This will really help with "which property investment strategy may be best for my 'personality'"
Read Dolf de Roos books, like "Real Estate Riches" and "101 Ways to Massively Increase the Value of Your Real Estate "
And of course, read Steve's books "0-130 properties, and the later one.
VERY IMPORTANT: don't wait until you "know it all" before you start. Accept that lots of people make money with very little knowledge. Also accept that learning comes from mistakes. However, if you get the strategy right you will lessen your risk. It's not really how MUCH you know as what you do with the knowledge you have.
Happy investing
I agree with the above post. Not sure what your budget is, but a couple of places to start looking are:
Blacktown
Seven Hills
Nowra (https://www.propertyinvesting.com/forums/property-investing/help-needed/4333820)All three you could get a place on a big block, and either subdivide the backyard and sell it, or hold it and build another dwelling on it when you can afford to do so.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks very much for the responses guys, I'll get to reading those books ASAP.
@jacm
I actually live quite close to Blacktown/Seven Hills so it would be advantageous to purchase a block around there just so I'd be able to better manage it myself.I was actually looking at trying to do a similar strategy in areas surrounding Mt Druitt (as I figure the land may be a little cheaper) or Riverstone as I think it will be an area where there's going to be a great deal of expansion in the next decade or so.
I'd caution you against managing it yourself. Treat it as a business. Don't get personal with your tenants. It makes it easier for you to feel sorry for them and allow late rent payments and so forth. But more importantly, if you do not have a property manager, you will not qualify for landlord insurance (which is ESSENTIAL).
Yep, Mount Druitt is forecast to explode also. I reckon Blacktown or Seven Hills would be great since many trains stop there, so the transport links are convenient for tenants.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Ah a very valid point JacM. I hadn't considered this aspect and I am a bit of a softy…
They're currently undergoing a line duplication at Riverstone train station as as well as that it's about a 15 minute drive from Rouse Hill Town Centre (a new, huge shopping centre which is set to continue to expand and will hopefully one day have a metro rail link to it). With that being said, Seven Hills/Blacktown are only 20-25 minutes away and also have far better public transport…
Consider me hinted, I'll do some more trawling of realestate.com/domain.
By the way, I noticed in the October edition of the Australian Property Investor magazine there's been a convenient change in NSW law. If you have a granny flat in the backyard, you can now lease the main house to one tenant, and the granny flat to a completely separate tenant. So if your backyard isn't big enough to subdivide, maybe it's big enough to have a granny flat, and the dirt beneath it can start paying its way
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
That is quite an interesting change of laws, JacM.
I think my general plan for now is to buy around the 200-250k mark and then after 2-3 years buy a bigger property with more land which I'll then develop. My reason for first buying at a lower mark is because it will allow me to get in to the market about 2 years sooner.
I've currently got about 10k saved and am able to add about another 10k a year to that.
Awesome. Sounds like you've got a good head on your shoulders there
Hey is there any way you can use the first home buy grant to acquire your first property… live in it for 6 months, then move out and put tenants in it? The extra cash from the grant will be really handy…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
JacM wrote:use the first home buy grant to acquire your first property… live in it for 6 months, then move out and put tenants in it? The extra cash from the grant will be really handy…
I'm sure you meant "twelve months" to fulfil the grant conditions.
Mr Fair Go
ah yep
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
That's a sound idea again JacM, and one I'll probably try and take advantage of. With the extra money I may be able to get that 3bed/corner block in Blacktown/Seven Hills a little bit sooner and maybe even get a mate or two to move in to help with repayments while I'm there!
Out of curiousity, if I was to purchase a property with the eventual aim of developing it (in to either a duplex or two seperate houses) is there a rough guide for what land size I should be looking for? There seems to be a lot of properties in the Blacktown/Seven Hills area with land sizes around the high 500's (say 560-590m2).
Hi again
It is different in each council. For eg, in the suburb I'm currently investing in, minimum block sizes after subdivision are 300m2. Also there has to be minimum of 25m2 of private courtyard or backyard space for each dwelling, and a total of 40m2 of "open spaces" which can include driveways.
If you buy a house and want to subdivide the backyard, remember the rear yard will need to "own" a very long driveway that takes the owners to the house at the rear. So the backyard block would be L-shaped. The total block size you start with might also need to be bigger than you think to accommodate for this.
The best thing to do is go down and have a conversation with a townplanner and explain what you're hoping to do, and if they could help you understand the requirements for subdivision.
Also watch out for pipes under the ground that you cannot build over (eg sewer mains, and easements). Again, council can advise on the presence of these, and it's important to talk to the water company too.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Looks like I'll be doing a bit more research, thanks again for saving the day JacM!
Hi Television,
Just in relation to a couple of your questions.
I self manage 1 of my IP's and you CAN actually qualify for Land Lord Insurance. I use EBM Insurance Brokers and they are very cost effective and offer comprehensive cover.
Also in relation to the FHOGs. You need to live in the property for at least 6 months of the first 12 months of ownership. I previously had a tenant in one of my IP's for 6 months then I moved in for 6 months and now it is leased again.
I have used PM's before and I will continue to do so on some of my properties but I managed to find the tenant myself and got all the work sorted so I didnt feel the need paying 7% management fees if I could manage it myself. I have built quite a good relationship with my tenants and no far so issues at all.
The FHOG = $7k, if I'm correct in my interpretation of what seems to be a lot of financial terminology?
When you say finding a tenant yourself, this means that you've advertised the property and provided some kind of rental contract? If I was to do this through a real estate agent, would they then count as my PM and charge me a 7% fee? (or thereabouts)?
Sorry for the late post Television I did not subscribe to the thread so I didnt realised you replied until now.
I didnt formally advertise through a newspaper or online, I was lucky and met a customer who was in the process of applying for rentals. I also had some interest via word of mouth etc. I might not be so lucky in another 12 months when his lease expires and may need to advertise or hire a PM. I was happy the tenant as he had a secure job in the Defence and was paying above market rates. He looks after the place well and always pays on time.
Good luck!
Jac
Perhaps give me some pointers or advice on how to look for property and locate a good region.
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