Hi all,
A question that has had me stumped for weeks is this.
I’ve accepted a new job in the hunter valley, outside of Singleton. I’m a first home buyer. Have about 30-35k available to my name. I know there are good opportunities no matter where you go, so just ballpark figures.
Should i buy a house in Muswellbrook / Singleton / etc .. for $300-350k (some good houses in the range) and get my FHOG, no stamp duty etc, and potentially accept average growth in return? Potential that is… I’ve been reading a lot of ‘supply and demand’ with these smaller regional towns, and there certainly isn’t a shortage of land / new houses being built, so this could impact on my purchase?
OR..
Should i continue to rent for another year or 2, and buy elsewhere, offering better capital growth, forgoing my FHOG etc..
Just curios is anyone has found themselves in a similar position. Any advice would be great thanks.
Hi Alsfta
Welcome to the forum!
It’s a really good question.
Could you purchase something in Muswelbrook that you could add value to? Perhaps spending your “spare” time in Muswelbrook renovating your house and adding some value – after a year or two, you could have it revalued and possibly tap into some equity, which in turn could be used to invest elsewhere. In this situation, you get the best of both worlds.
If you were to adopt this strategy or if you plan on owning multiple properties in the future it’s important that you structure your finances correctly from the start. A good independent mortgage broker that understands investment structures will be able to help you out.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Jamie,
Thanks for your comments. I’m sure there will be any number of places available in either Muswellbrook / Singleton and the like which value could be added to, I haven’t really given that much of a thought at this stage. I’m thinking since I will be up that way for at least 2-3 years, perhaps I could find something worthwhile, get my FHOG, do some work, but pay interest only on my loan, since I’m really only living there ‘until’ I move to something else.. As this would be only a step in the portfolio to kick-start things..
I was wondering if anyone had any numbers they could put it, perhaps something like:
Singleton, $350k, FHOG / stamp duty free etc, capital growth, 4-5%? (rough estimates of course)
Elsewhere NSW, no FHOG, etc.. 5.5-6% potentially?I’m sure over the long term, a few thousand saved on FHOG grant now will have no effect on compound growth, but thats why i’m here!
What type of investment structures could an independent mortgage broker offer? I’ve been reading recently how important it is to structure from the start and not to cross-secure properties, etc..
Hi Alfsta,
I think in your above reply, your idea sounds good -if you're going to be there for a couple of years, and have FHOGS eligibility why not buy? Don't know much about the area, but have heard reasonable growth, more so Musslebrook.
But your request of purchase prices VS growth is a bit like 'how long is a piece of string'?
The important thing is to buy right where ever you are, and stick to the basic formulas (you'll find plenty of info on that on this site, and in some R/E magazines like Aust property investor & My Investment Property – remembering you will be living in the place for a few years.
Unless you believe prices are not going up for a couple of years (yeah right…..) why not go for it and enjoy your first home/property?All the best.
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