Ducky,

STEP 1: Approach vendors, criticise their properties until they sell it to you for almost nothing.

STEP 2: Approach tenants, praise your new property and tell them what a wonderful place it would be to rent.

Voila! On the one hand, the property is so tragic that the vendor was lucky you took it off his hands… the tenant, on the other hand, would pay the moon to be in such a fine place! []

kay henry

Ksafik,

Buying your own first place is exciting! Buuut…

I agree with Dino, you need to save money first. You can use the FHOG if it’s a home for you and not an investment property. But if you haven’t saved a deposit, it may be that you get into trouble down the track. Why do you want to borrow 100% or more? Traditional lenders will require a 20% deposit so you don’t pay Lender’s Mortgage Insurance. They will require this 20% to be “savings”, and not “gifted” to you.

Whilst others on here might suggest you go in with no deposit, I think it’s fiscally better for you if you have a deposit. If you have a more than 100% loan and interest rates rise and property prices decrease, you may have negative equity and the bank can make you sell.

The sooner you pay off your home, the sooner you have equity to play with elsewhere to buy an IP or so.

kay henry

Prop,

I look exactly like that smiley face I put in the last post- pink head, no hair, no nose, and no body.

Good enough for an anonymous forum, yes?

kay henry

My guess here kereni, is that you’ll need *some* deposit to buy an IP. Others can correct me here, but traditional lenders will not lend on no deposit. You could get your IP revalued, and it might have gone up in value so you can use that equity as deposit. Given tough, that you’re so highly geared at 90% of two properties, I am wondering if you’re in a financial position to buy another IP.

Factor in possible interest rate increases in future decisions. A positively geared IP won’t help you much if you can’t pay it off and, in the worst scenario, have negative equity in the case of a value reduction in property. You would be paying mostgage lender’s insurance if geared at 90% now. Another dose of LMI and negative equity is possible.

kay henry

Prop,

Thanks very much- that’s sweet of you [:X]

I’m glad you said “sympathetic” instead of “pathetic” hehe

kay henry

Prop,

I quite like that OESR site. When I am researching stuff, I look up “location real estate median price” or different combinations into google.com google brings up everything, including sites like oesr.

There’s a site like this for the Illawarra, if anyone’s interested. It’s iris.org.au and it has huge, easily accessible reports and data on RE in the area.

kay henry

fullout,

Buy the car if you want. I had old cars all my life, and I bought a new one a couple of years ago- by loan, because I have never had enough money to have a decent car. With the recent increase in value in an IP, I am able to pay off my laon one year early! Authors like Anita Bell will tell you it is better to drive a torana and never spend a cent that isn’t related to property investment, but I am quite happy with my “bad debt” :o)

The real shockers and waste of money in a new car are the brandname services, depending on the type of car. Mine cost me 300 bucks, then 500, then 800, then 1200- ridiculous really. All in the name of having “log books” at the end of it. I killed off the services when they got too exxy- no problem there- it ran out of warranty anyway []

Old cars can be scarey. I do a lot of travel and driving in fog or in inclement weather is like a horror movie in an old car.

And with regards to RE investing, a quality car can givre you a bit of “veneer credibility” with RE agents (if you’re into that sort of thing!)

Why wait until are 75 and you have all this wealth due to RE investing if you want to live well now? You can have a balance- live well and spend *some* on RE and some on yourself- for now- not as deferred satisfaction.

kay henry

LuckyPhil,

I write this in the hope I will not get shot down. I am responding to a question to be polite, but if readers feel the need to slam me about it, then it’s a pity.

I took a decision not to invest in shares some time ago. In doing that, I also had to think over my reasons around the ethics of RE. I feel like I am not *justifying* my decision to purchase in RE, but have a consistency in my approach to it which neither harms vendors nor sellers. I am happy to discuss offline ([email protected]) my feelings about these things if anyone is interested- but certainly not so people can take the opportunity to think me naiive, idealistic, or stupid… I stand by my beliefs and my “ideal world” is the one I’ve created. Anyone who dealt with me in either purchase or sale would, I hope, feel that i have been fair in my dealings.

I choose not to engage in shares for a number of reasons. If I buy into most companies, I am aware that they often make profit by making others unemployed- redundancies lead to my profits. I can’t live off OPM (other people’s misery). If I buy into many companies, they make their profit off 3rd world labor. For a range of other reasons, I don’t want to make money where other people lose.

I know there are other people who feel differently about these things. As stated, I am responding to a question asked of me. I do hope people will respect that instead of trying to tell me why my ideas are flawed.

These are perspectives that I have thought of for years, and I’m happy with them. I may not become a millionaire, but I feel my decisions in life have integrity and any profit I make in RE is not made at the expense of others.

kay henry