Very first property – go positive or negative?

Hiya

what are your longer term plans with property?

Will the $200 a week put an early halt to your ability to purchase more?

Cheers

Jamie

Hi dude,

  It is probably a good idea to have a one-on-one chat with someone who can assist you to make the decision.  The sharing of your private information would allow a better discussion – i.e. do you have a large wage to handle a -ve geared property?  

  But then there is :-

   Are you confident that where you buy the market has the signs of adding value over time?  Do you know which demographic you want to rent to (e.g. professional couples with no kids, family groups, seniors, students, etc).  Do you have the $$, skills, time, to buy a -ve geared and add value and raise the rent – making it neutral or +ve geared?   Do you want to buy a house with potential for development down the track?  etc, etc.  There are lots of horses for courses – picking the one to bet on is the first hurdle… 

  See, your skillset and desires may well guide you into possibilities that can be more beneficial once you identify just how you want to proceed.  Keep reading, meet up with other investors (see the Meetup posts that pop up now and then), take ideas from within posts and align them with your thoughts. 

  Of course, some on here can provide advice too, as part of their profession.  Making contact with one of them might focus your thoughts once you can share more of your personal financial situation with them.   Their works are on display – maybe make contact to see if their words can focus you into a more specific area of property investing. 

When starting, we don't know what we don't know, so using others' knowledge is a smart move – your post today was a smart move.  Let's see where it leads,

Benny

I must admit – I'm a boring old buy and hold type of guy with a preference towards higher CG properties in desirable areas.

Cheers

Jamie

I tend to agree with Jamie

It is important to remember that interest rates are at record lows but will they remain at that point. Unlikely. So you buy a property in a poor area with little or no growth at 6% but then in a year or so rates go back to 7% guess what it is no longer positive anyway and you are stuck with a second rate investment.

Look at better areas I think Brisbane is good value at present and buy the best you can with your money

I genuinely do not believe that there necessarily is a binary inner suburb high CG lower rent / outer (slummy) CF low CG system in all markets in Australia. There are many outer suburbs which have consistently outperformed in % CG terms whilst offering higher rental yields. Especially where inner suburb living is well and truly matured in most capital city markets, the medians have already dramatically increased, whereas outer areas are becoming reliant for 2nd/3rd home buyers.

In any case, for an initial purchase having capital growth is one of the most useful attributes the property could yield, as it will enable future purchases easier. Look at areas which are gentrifying/socio-economic conditions changing and the median prices will no doubt experience long term uplift.