Hi there,
I would like some feedback to check if I'm on the right track.
I plan to buy my own place, with a view to eventually using equity to get an IP. I think my first purchase should be a unit, to allow me to get on the property ladder, although there are body corp and admin costs which houses don't. But I see houses as having higher costs due to a premium of having land. I wonder does it really matter so long as I buy an asset that is mine?
What I want to know is what steps should I be taking. At the moment I'm reading books and researching mortgages, while putting money aside for a deposit and buying costs. Do you know what would be next logical thing to research?
I guess what I'm after is some kind of map as at the moment I think I'm just fumbling in the dark. I know I want to get into my own place but I just don't know what the right steps are. Any one have any good books/material that may cover this?
Patch.
Hi Patch
Some people like to own the place they live in, others prefer to remain as tenants in their favourite suburb either because they cannot afford to buy into it and don't want to live elsewhere (rent is in some cases lower than mortgage payments, such as in inner city suburbs)… or because they want to free up their cash for investment purposes.
One reason for preferring to own where you live might be if you have children and want a stable environment, and be sure you will always reside in the necessary postcode district for the school you want your kids to attend.
All that said, if you've decided you want to own the place you live in, and have chosen the suburb, then if you can afford a house I'd be going for that. If funds don't allow for a house then go for a unit.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks JacM,
That's a really interesting tip regarding the schools.
Patch
Hi Patch,
Do a search on this site for book list/ book suggestions, you should get heaps.
Maybe start by writing down some goals, sounds a bit flakey but really helps clarify where you want to go, how fast you want to gt there, then you can start thinking about how to get there.
Maybe start going to open houses in areas you think you might like to look in. (hands in pockets no buying property yet!) Talk to agents about who lives in the area (demographics), prices of properties that have selling (realism) and what is currently on the market (gives you information about where that area is in the property cycle).
Read heaps on here and just start asking questions. Most people on here got started, many without a clue, and just kept trying to find out info.
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Patch,
I understand affordability constraints are an issue for you and that is why you are looking at a unit.
The one problem with most units is that you are hamstrung by the level of improvements you can make to the unit and become dependent upon the general market moving.
You may wish to consider a property that you can add value to. Maybe something that could be improved through value adding, tidying up, replacing a few things, a new coat of paint and so on. Maybe look at a larger block which is able to be subdivided so that at some stage in the future you can sub-divide and sell off the back block or, if you find your financial circumstances significantly improve, build a unit at the back. Corner blocks are best for this.
Key points for me are; don't financially stretch yourself too much for your first purchase, consider using the FHOG to get into your first purchase – just make sure you meet the requirements and obligations of the FHOG and consider bringing a border in to offset some of the costs of your property (there are tax issues with this – not insurmountable but they will need to be considered).
The capacity to add value should be a primary consideration at the moment. Simply buying a property without being able to add value or improving capital growth at the moment will be the slow road to getting ahead. I firmly believe the markets, in general, will be slow for a while and simply sitting on your hands waiting for property to increase in value will be property's poor cousin for a while.
Hey Patch,
I wrote an article on buying your investment property before your own home. It is certainly an option worth considering. I work as a broker and I'm finding more and more people investing in property and renting for their place of residence. Here is a link to the article… http://investmentproperty-howto.com.au/5-reasons-buy-investment-property-buying-home/
With regard to units vs. houses, there is definitely two camps on this one. It's a bit like Holden vs Ford. There are pros and cons of both! The truth may be that a good portfolio has both!
HI!
I found what helped a lot was hitting the streets and inspecting properties, talking to real estate agents and putting theory into practice. It really helps you work out what questions are good to ask and what information would be great to have/where to find it. Try putting in some low ball offers as well at some point to get a feel for how to negotiate, and you never know you might get one thru
As DWolfe stated. Write down your goals. One thing is knowing you want a property, another is having it written somewhere with a date, possibly a picture beside it where you see it everyday as a reminder. Perhaps even a reason why you want it written below.
All the best!
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