Hello,
I thought I'd share my current stratergy and see if anyone had any feedback or tips they wanted to send my way or even point out any pitfalls I might be heading towards. It would be greatly appreciated.
I am currently saving up for my firs IP. Never owned a home before but I currently rent with my flatmate and I'm very happy in my home so dont actually want to move into the place I buy. My mortgage broker informed me that I will incur extra stamp duty for this but I did some rough figures and it doesn't seem like it will be much more. Either way I dont want to move out of my unit where I rent.
I don't have a deposit saved just yet but am currently saving about $1k per month. My plan at this stage is to try find something between $50 – $100k that is either positively geared or close to it and try to get it for a cheaper rate than what it is valued at. I then intend to use the equity (depending on how much there is) as my deposit to buy something or even another one. And so on and so on… I can afford to spend up to about $2k per month on mortgage repayments etc.
The biggest issue is that I don't want to wait a year or two to save up a deposit to get into the market, I want in now and I don't want to ask my parents for handouts or for them to assume any kind of risk etc.
Any advice / suggestions would be greatly appreciated.
Thanks,
Hank
P.S I've been trawling the Brisbane market in the last week or so and there are so many "retirement" units in my price range which seem to be positively geared or close to but there surely must be a catch. Anyone know anything about those?
Hi Hank,
I would avoid (I hate them) retirement units, they usually have high management costs associated with them, minimal growth the list goes on.
The only advice I can give in regards to getting a deposit together in your situation… possibly get a better paying job and or work more hours at your current job.
It worked for me
Not sure where you are located but in WA you can access government sponsored loans that allow you to purchase with as little as 1% deposit and also have shared equity schemes where the government will share up to 40% of the loan costs. It is suitable for owner occupiers though.
You can also get in for as little as 5% deposit and the usual genuine savings requirement of 3 months can be waived with some lenders if you are renting through a REA for 12 months+.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
Hi Hank
Yes the catch with the retirement apartment is the maximum loan you will probably get will be circa 65%.
Restrictive covenants as to who can occupy the property hence lenders know that re-sales will be limited and difficult.
Majority of lenders won't touch them and they are certainly considered specialist securities.
No state lending scheme such as Shared equity in Qld Colin. We looked at providing our own SE finance but just too many other opportunities.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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