Hi David, welcome to the forum. You might found that a financial advisor may steer you away from property as an asset class (not all – but some do).

Have you considered looking into areas with a higher rental yield? If you look further south towards Logan you’ll find more affordable properties with decent yields. Obviously you’d have to carry out your own due diligence on particular areas but if cash flow is a concern than perhaps something that’s not so negatively geared would be a better alternative.

Another thing to remember is that rents generally increase overtime – which slowly reduces your costs.

All of Richards excellent points will improve cashflow as well.

Cheers

Jamie

I reckon you can have your cake and eat it too.

If you buy an IP, search for something with a decent yield that will look after itself (or come close to) in terms of rent coming in and costs coming out.

If you buy a PPOR, you could consider renting a room or two to friends/family.

Both of these scenarios allow you to enter the property market and shouldn’t significantly impact on your current lifestyle.

I agree with starting out young. Property is a long-term asset, as a young person starting out you have time on your side.

Any particular reason why you’re saving up to $50k? It’s shaping up to be a buyers market at present so you may be able to find some good deals right now.

Cheers

Jamie

The first property we done it with was vacant. We were able to get access to the property before settlement to carry out renos and advertise for tenants. Both conditions were worked into the contract before exchange.

Cheers

Jamie

Equity can be achieved through future growth or manufactured through renovations.

With you offset – you can take back whatever you put in.

Another thing to note – cash from your offset will not be deductible, whilst new borrowings against the property will be.

Cheers

Jamie

LMI doesn’t have to be a bad thing. I’d rather take out a 90% lend and pay some LMI (which can be added to the loan) then wait while I save up a 20% deposit. Also, if this is going to become an IP in the future – you probably don’t want to drop all your savings into this property and reduce the level of deductible debt.

All good – but you’ll have to live in it for at least 6 months within the first year.

I wouldn’t base your decision purely on interest rate. What’s their cashout policy like (will they allow you to access equity in the future)? I doubt you’ll be able to cashout above 80% in the future (which can cost you a lot in terms of missed opportunity). That deferred establishment fee (which will need to be removed by 1 July 2011) is a killer.

Cheers

Jamie

We just spent $7k on renovating a 3 bedroom house (the bathroom hasn’t been done though). We painted it ourselves, installed new kitchen doors/handles/sink/oven, re-carpeted throughout, new light fittings and other bits and pieces and tidied up the yards.

Cheers

Jame

Another excellent site and one to add to the due diligence checklist- thanks for sharing.

Cheers

Jamie

Watch a DIY youtube clip and get cracking

It’s a job that can be carried out by any carpenter or handyman. Is the property being managed at present? If so, ask them for a contact.

Cheers

Jamie

The new NCCP legislation coupled with stagnant/decreasing growth in most property markets at present would make this a very difficult (if not impossible) strategy to employ.

Cheers

Jamie