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I’m 24 and I don’t own any properties yet. I’m self-employed (but less than someone on min wage would earn) and I live with my parents. At the moment I’m just saving as much as I can.
Got my eyes on the stock market, property trusts, full time jobs, cf+ properties etc.
TMA,
I’ll do more reading and research but I prefer to get more practical experience than purely academic.
Mind you I jumped into self-employment without working out how much I needed to charge and things like that so ending working long and hard for low income.
Office or home based I need a “base” where I can do various things (both technical and admin) that is not far from customers.
I have a 1300 number so I can move that as I please.
TMA,
I will likely just get a low-doc loan so its getting the deposit together which is going to be my task. Perhaps I should consider a regular geared savings plan (http://www.anz.com/aus/fin/investing/gearedFact.asp) then later a margin loan on a property trust?
I believe I can also join the army reserve and get 2g for 45 days training. This is much better than my current rate of saving.
I wouldn’t ask my parents to put up their house/land as equity but they told me that if it gets rezoned R40 they will sell it and buy my brother and I a place. I won’t wait around until that happens though.
I’m thinking that I should perhaps forget about REBA (as it requires 12 months) but go for the first home owners as it only requires 6.
If I somehow manage to get an office in the Perth metro area I can work from there then live in the property for that 6 month period.
TMA,
If the shares go down in value the bank will issue you with a margin call where you need to pay back the difference so you are right that there is a risk. Interestingly though it works the other way as well if the shares go up in value you have more equity.
You may both be right but the less risks I face the less I trouble I have sleeping.
I assume you only need to use another property from your profolio as security if you do not have the full funds required for a deposit.
You may only need a fraction of the value of one of your properties but you are risking much more than that fraction by using it as a deposit. You may also have trouble getting approval from an investment partner or spose.
Perhaps when you get a loan to buy a cashflow positive property you also borrow a certain amount to get a margin loan on some very low risk but reasonable dividend returning stocks. Such as in one of the major banks.
Later you can sell these stocks for use as the deposit or keep them and use them as the security.
I personally plan to use a regular geared savings plan to accumulate the initial deposit as well.
It would really depend on a few factors like the bank or finance company you are dealing with and who handles your case.
It does go on though. While the tellers you deal with when you go to the bank are nice friendly people the ones working up the top of the corporate tree can be quite the opposite.
I’d suggest trying to use the property you are actualy buying as security for the loan. Otherwise you are taking a risk an you need to weigh that risk and mitigate it.
I hear when they take posession of the property that it can really screw you over.
They (the bank) virtually give it away and usually to one of their mates. With what left they take out all the trumped up legal fees etc and you might have a few pennies to rub together afterwards.
If you are going to have trouble paying the loan don’t tell them! Most likely they’ll try and make plans to take the property straight away.
Perhaps there will be a flood of cheap family houses as the empty nesters move into smaller retirement housing and people have less children.
So your saying its easier to do the 11 second rule in your head than the 2 second rule?
Doesn’t everyone carry a Palm Pilot and use its calculator?
When I was flatting they never put the rent up.
I was paying $95 a week for a 1 bedroom in Leederville for a year and then $120 a week for a 2 bedroom in Glendalough for about 16 months.
The lady that lived in the flat in Leederville before me had been there for 10 years and was paying $70pw rent.
I assume they put the rent up again after I left and a new person moved in.
I would suggest sending them a letter saying the rent will increase when it is time to renew the lease.
