You know Prophecy, I think some folks reckon you might be taking the pith if you stay at home where your costs are low. While staying at your family’s place is a superb way to save, I agree that you can’t do it forever – but you never said you were going to stay at home till all your teeth fell out did you?

I think you have created a great opportunity. I imagine your borrowing capacity looks pretty good at this point and you might qualify for the FHOG. I don’t blame you for taking the opportunity you have. I also know a guy who left home, then came back and started saving a deposit. His parents were ok with this – up to a point, and then they started dropping hints for him to leave. Anyway, he went out and got a place and in the third year of ownership the value of his place is about $100K ahead of the loan’s outstanding balance.

I know another guy who has two brothers and they are going to live together while each buys a house in turn, with all of them slaughtering the loan on one before moving on to the next. Apart from having to be very careful with their tax returns, it should be a good strategy.

I know yet another whose parents let him mind their house for a year – no costs except for a weekly cleaner they insisted he hire – while he put his own place on the rental market and made extra repayments!

I don’t begrudge them these opportunities. Your parents will no doubt indicate it to you when they consider you to be sponging. In addition, you will make your own determination regarding how uncool it is to still be there.

If you are keen to get into the market and have a place you can call your own (which many seem to have implied you are not) then go for it, get in the market! You will have something to put in the “A” side of your A&L (that’s not Kiyosaki’s definition of an asset but people with low debt on their own homes can have pretty decent net worth and that can allow you to do Good Things). Just ensure the “L” side doesn’t get too big and – as Steve would tell you – get that income cranking too.

Oh BTW sometimes owning property will feel like an invitation for a number of organisations to put their hands in your pocket. But I guess that’s why you have to buy winning properties not lemons.

Some posters have said ‘read plenty of books’. If you haven’t already you should. And learn from this website. Then do something. As Steve said in his latest newsletter:

“… when it comes to investing, while a solid education in the basics is very, very important, the best way to learn is in the field.”

Getting out there and having a go is invigorating (read: scary), educational and empowering. It’s an adventure and it rocks. But you don’t need me to tell you that, you’ve travelled and you know that sometimes stepping out of your comfort zone shows you how silly you were to be afraid in the first place.

I say go back to some of those early replies to your post and consider them but only insofar as they suggest ways of being smart about your move into the market .

Good luck!

Bob

PS I hope that by offering you my 10 Euro’s worth with my right hand I didn’t poke you in the eye with my left.

I would have to agree with the Mortgage Adviser, if it’s the Investors Club and you are not getting service from them, you need to make a fuss about it! They are supposed to be there to help you go to settlement.

I would also agree with Mortgage Hunter, they are quite good in that they can “hold your hand” all the way to settlement and a good way beyond that – great if you are new to it all. More experienced investors can handle it themselves (and are more likey to be in a position for wheeling and dealing for greater profit).

I have found most IC support members to be friendly, sincere and available – though some are better educated/ experienced than others.

Just one thing though – unless they have changed their approach, the IC advocate -vely geared property, with the cashflow shortfall being compensated by pro-rated non-cash deductions like depreciation savings. If you’re a disciple of Steve’s you probably won’t find this strategy too appealing.

Oh and another thing – the cynical among us may be heard to imply that the IC get a kickback from developers – and that the purchaser (you) pays for that kickback in the price of the property you are buying. I have never seen proof of that myself but if you know your values for the area you are looking at (as you should!) or if you check against valuer-general data you should spot any inflated prices.

Bob

Thanks resiwealth for the words of encouragement, and the practical and informative suggestions re what to look for in a stalling or correcting property market. If I am ever lucky enough to shake your wise hand, remind me not to wash it for a month.

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