Forum Replies Created
Initially you would give a small blurb outlining the critical information, and if the party is interested you would then be required to hand over the detailed research.
An initial blurb might go something like:
Cash Flow Positive Property
10% rental yield on a 3 bedroom house in a mining town of 10,000 people. Capital growth has been steady over the past five years at a rate of 9% p.a. New industry is planned to commence in the next twelve months, providing more jobs and stability to the area.Detailed research would be expected on the following:
Area Information
Essentially, why is this area promising for investment? You must also reveal potential threats to be completely above board.
Population (and growth)?
Metro or rural area?
Mono-industry, or diversity?
Income level in area?
Medium rent in area? Trends?
Vacancy rate?
Medium house value? Trends?
Infrastructure. Aging? New?
Services?
Unemployment rate?Property specific information
Price
Rental yield (already tenanted? for how long?)
Capital growth liklihood
Development potential
Need for maintenance?
Proximity to schools/shops etc
What makes this property a good investment?As for how much to charge for this information – it will depend on what you and the buyer want. You could do it as a JV, where you both profit from the IP rather than an upfront fee. In this case you would be expected to contribute to management of the property, liability on the mortgage, etc.
You could do it as a %of the property price, or a standard flat fee (more usual). A flat fee is usually about $5,000 – but really, it depends on how much interest you get from buyers, and how much money they stand to make from the deal. http://www.positiverealestate.com.au is a website that lists their finds – you may be able to guage from them some ideas in regard to blurbs and fees.
There will be differences in tenancy and contract laws, tax rebates, and so on. Completely different system – I’d suggest buying some US real estate books that break it all down bit by bit.
They should be able to take into consideration your UK earnings – do you have a UK tax assessment form you can show?
They will want to make sure you can service the loan, so probably a good idea to start working before you approach them – or get loan approval while still in the UK on your current income.
If the IPs are cash flow positive, then servicabilty won’t be such an issue as they will be covering themselves. A big deposit will obviously help maximise cash flow on an IP. You might even want to consider putting the majority into one IP for starters, and then leverage off it to purchase the second IP with less cash down (start off your bank relationship on very solid footing, and then squeeze for more).
Put it in your PPOR to pay off your “bad” debt (non tax deductible), and you can leverage off the equity in your PPOR to get an IP (debt which is tax deductible).
Who is Peter Parsons? Dmichie, you seem overly respectful of any and all articles published (even on the net by an unknown) that support your negative outlook.
Even when they are as wish washy as this is.
The article starts by talking about the world wide trend in property – I presume in a poor attempt to make his further claims appear more legitimate. He then makes generalisations that blur the line about whether he is talking about Australia or the world in general, while being inaccurate about both.
Some countries, such as the UK, have seen a trebling in the asking prices of houses, leading to a situation where first time buyers have effectively been priced out of the market in almost all areas.Australia is one of the few countries in which we believe it is our right to own our own home. This is because white people only settled this country a couple hundred years ago, and they gave land to anyone and everyone (but the indigenous inhabitants). The average person in the UK (and many other countries) does not expect to ‘own’ their own home. In fact, more often than not, if you do ‘buy’ in London, you are not buying the land (which is all owned by the queen, lords or other titles) but a lease on the land, much like Canberra’s situation. The notion of property ownership is very different in England, where for thousands of years land was ‘owned’ only by a handful (think of where the title ‘landlord’ comes from).
Australia’s idea that each individual has a right to own their own home is rather unique. We might find it a concern that first time buyers are priced out of the market, but other countries do not share this concern to the same level we do.
And why is this? Because overseas the rental market is far better developed. It is not unusual to longterm lease a house – and some people may even live the majority of their life in the one rented house. Long term tenants treat the house as if it were their own, and may paint the walls etc as they see fit. They don’t have a huge mortgage living over their head, but they do have a roof over it.
The second group are the long term owners. These are people who regard a house as somewhere to live – not a leveraged investment opportunity.Except that many people who are planning for their retirement are banking on the value of their home. We know that superannuation is a joke, and noone wants to live off the pension – if it’ll still be around in future years – and people often downsize as they get older to use the extra money. If these people have spent years paying off their home mortgage, and then come to retiring to find that their house is only worth $100 – where have all those years of repayments gone? They have poured every spare cent into buying and maintaining their home to end up broke. They have may have a roof over their head, but no money to pay the rates or maintenance. They can downsize, but they won’t get a bulk payment to help see them through retirement. I don’t see how this group is better off.
The third group are the ‘professional landlords’ These ‘buy to let’ specialists make a living from purchasing property and renting it out to cover the mortgage.Finally – we get to that word ‘mortgage’. Can you really tell me how this group of people benefit when they owe the bank hundreds of thousands of dollars on a useless piece of property? If property is suddenly only worth $100, then how many people are going to continue renting for $300 per week? Of course they’ll opt to buy instead, which means pro landlords will have empty worthless properties and huge debt.
With no income they can’t make mortgage repayments, the bank claims the property – but can’t recoop mortgage as the property is worthless. This happens to property all round the country – which suddenly means the banks are billions of dollars out of pocket. Which means the whole economy crashes.
Yeah, I can see people benefiting out of this scenario.
The banks go down, that means so does everyone’s savings – including the “pro landowners” who cashed up by selling their property prior to the downturn.
Your employer also has no money, as we all use banks. If your employer can’t pay you, you are completely broke and can’t put food on the table.
Everyone is in the same situation… unless you live in a self sufficient agricultural area that at least has crops growing nearby.
So maybe we should all run out and buy agricultural?
You can gain capital growth outside the major metropolitan areas – just do your research and ensure the area is a goer.
Consider it a long-term investment that will pay off with time, as the growth is not as consistent as major cities. You may get good CG immediately, but expect to wait ten years or so.
If you check out some government websites, you’ll see that they are investing in certain areas to increase industry and community. There’s been a lot of talk about the SE Qld plan, but there are also rural areas in Qld and Australia that have been highlighted by state or federal governments. Some local councils are also very progressive in attracting new industry.
You are also much more likely to find positive cash flow in these areas.
Don’t buy any place you can afford. Pick an area that has shown some population growth, and has solid plans for its future growth and stability(diversifying industry, attracting new industry, close to a major city for commuters, community initiatives, etc). Research properly, and buy low. It’s an investment property, so you can afford to be a tough negotiator – only buy when the numbers add up.
There is more risk outside metro, as we as a nation are becoming more and more centralised with people moving from rural to city. However, some areas are successfully combating that – or at least pick up population as a growing city spreads toward it.
I’ve already answered the other thread but further to your questions:
1. Two 3 bedroom town houses don’t equal a 6 bedroom house.
Each townhouse requires for itself, seperated from the other: a kitchen, an eating area, a living area, a lug plus a 2nd car space, an outdoor area (usually has a balcony and a patio in addition to a courtyard or garden area), three bedrooms, and usually has both an onsuite and a bathroom.
This is much more than one house.
Townhouses are compactly designed. They take up less space, but are generally more efficient with the space they do use. This costs more in design and materials (see other post for some examples).
More added expenses: There is a need for double brick, insulation and fire protection between townhouses (where normal houses often just have timber framed and plasterboard dividing walls). A DLUG is cheaper than two seperate LUGs. Each townhouse needs it’s own connections to water, gas, electricity etc. Each townhouse needs driveway access (rather than one for a house)… the list goes on.
Townhouses only cost more per square metre. As townhouses are generally half the size of a stand alone house this does not make them double the cost. Three townhouses would be cheaper to build than three standard houses (which each take up more square metres).
2. You are unlikely to be able to do this, as there are council regulations regarding how close one dwelling can be next to another, etc.
You seem to overlook the fact that townhouses are of a completely different design to a regular house. Most houses (probably including your 4 bedroom) are not very efficient with their usage of space. You would need twice the land to place two such stand alone residences on a property than if you put two townhouses.
Equally, two stand alone houses would have their windows onlooking each other with no privacy for residents – not a pleasant outlook. Townhouses are designed so that while you live side by side, you never see your neighbours except as you arrive at the front door.
3. If these are your thoughts, then don’t build townhouses. The basic principle of a townhouse is that it is a medium density dwelling rather than a low density dwelling like your four bedroom house.
The 214 sqm that your house takes up could fit two 3 bedroom townhouses, each bringing in a rental return equal to (or nearly) a normal 3 bedroom house. The two houses together are worth more than one 4 bedroom place – so you can expect that it will cost more per square metre to build.
The design is more expensive on a per metre basis, but it also gives you more bang per metre – and you don’t use as many metres.
You would find few constructions costing less per square metre than one built by a bulk house building company. They build to the minimum legal specifications, and don’t really expect the houses to last long in the scheme of things. They also have a cookie cutter approach whereby they use the same few designs over and over – cutting down on design and engineering expenses, and they are able to buy their material in bulk as they build hundreds of these properties each year.
For a new development, you’re starting from scratch. You will need to consult a designer/architect, engineer and hire someone to oversee the project. You don’t have the same economies of scale, even if you are building 4 townhouses (this is a small development as far as suppliers are concerned). Expenses are naturally going to be higher per square meter.
One thing that I imagine your 4 bedroom house has is a lot of big glass windows in every single room. This is cheaper to install than brick wall, which is one of the reason why big builders go overboard with floor-to-ceiling glass windows. Townhouses, on the otherhand, are compact living spaces that exist side by side with other townhouses. Structurally, practically and for privacy there needs to be a greater brick to window ratio.
In my understanding on a town house it is a small house, usually without a backyard. I would have thought a small house would be cheaper, not more expensive.A small townhouse *is* usually cheaper than a large house, just not on a *per square metre* basis. How big were you planning on building these townhouses? Generally they use space very well, so even a three bedroom townhouse can be under 100sqm. This is one of the reasons that good design is essential – to give tenants everything they need in half as much space.
And size of backyard is pretty irrelevant, as this is not part of the square meter cost.
It will depend on where you are building it (costs are different in different states and metro vs rural) as well as the type of materials you use. Double brick is obviously more expensive than weatherboard.
Most insurance companies have calculators to work out rough replacement cost of a building – this may be of some help. http://www.gio.com.au/gio/home_insurance/building_calculator.html
A potential problem is if the area is currently a residential outlook and you want the property as residential, but later down the track a commercial development goes up next door that impacts upon the streetscape. Nobody will want to live next to a McDonalds or busy shopping centre.
Can’t remember where I read it, but there was some research done on tenancies that found that regardless of whether you rent to wealthy high paid people at the top end of the market or poorer people at the bottom, the chances of rental default were the same.
Certainly, in building circles (my partner’s a builder) the clients you have to look out for are the lawyers. They may have plenty of money, but some of them will find any loophole in the book to string you out. It’s a matter of ethics rather than $
I.E. avoiding poorer suburbs doesn’t protect you from bad tennants.
Equally, I don’t think crime rates are a big issue for an IP. If there are more house break ins than usual… it’s not you who’s living there. The tenant has already chosen to live in the area before they find your rental, so the crime rate obviously isn’t of concern to them. And, you can always install a security system.
The second part of the tenancy research did show that renting to the bottom end of the market resulted in a greater chance of property damage. This might be a turn off away from poorer areas, but if proper checks of the tenant are done before selection then this risk should be minimal. Equally, you could choose to buy a higher quality house in the same area, therefor not renting to the very bottom of the market.
Each to their own.
Have you checked out the ato website? http://www.ato.gov.au
Should have all the tax info you want and more.
If you have access to a digital camera, I’d suggest you take photos of all the blemishes in dispute. If you send them a copy (email, on disk, whatever)then maybe you won’t have to go through with another inspection, they’ll see they’re wrong. And if not, at least you have photographic evidence if they do become a problem further down the line. And use a timecode feature on the photos so it’s clearly established that it was in this condition at the beginning of tenancy.
Most likely a case of the agent covering their arse. They didn’t do their job properly – just waltzed through and picked up on the obvious, in an out in 5 minutes – and you doing the report properly highlights their sloppiness. Rental agents are generally the most junior staff in an agency, so they probably prefer to make it look like a ‘problem tennant’ than have their boss think they’re doing a bad job.
I have ammended inspection reports in the past, and my agent didn’t have a problem with it – certainly didn’t have to re-do it. I mean, where is the logic here? You’re a phsycic who knows that during the course of your rental you will end up putting a 5mm blemish exactly on that wall? There is no reason why anyone would include fictional blemishes on the report.
Looks more like an agent wanting to do a new report so that if his/her boss checks it it looks neat, tidy and thorough (by the agent, not the tennant).
You could find out who the PM would be using… but they might not be using someone who is reliable or inexpensive. Living in Sydney like yourself, I noticed that the next door rental had new guttering put in via the real estate agent’s tradepeople. The tradepeople didn’t put a downpipe in! The agent didn’t check the job and get them to fix it. Months later the owner came by and noticed the problem.
Another example – my aunt lives in a block of townhouses and the body corporate had to get some work done. They got a quote from their usual tradespeople, and the bill was huge. My Aunt got some independent quotes, and was able to get someone to do it for a third of the price. Often tradespeople charge what they can get away with, so if they’re ‘in’ with the agent they know there’s no competition.
Generally if you need significant work done, you get three quotes for the job. By meeting the people and seeing what they charge (how they break their costs down) etc you should get a good feel for them. However, if you’re just getting someone in for a small job on an occasional as-needs basis, this obviously isn’t practical.
http://www.bangitup.com.au might be of use – you post details of the job, and it gets sent to tradesmen on the database. They respond if they’re interested, and then you can interrogate them
. Maybe ask for a couple of recent clients who you can call to see if they were happy with the work.I don’t know about the situation in WA, but in most of Australia there is a general shortage of tradesmen. This means that they’re often booked up in advance, so if you have an emergency situation or you want priority then expect to pay a premium (to jump the queue). If you have many properties then you may be able to negotiate a deal on the basis that they’ll get a lot of work from you, so they should prioritise you, but if it’s just one IP you have buckleys.
dmichie, I don’t particularly appreciate you quoting me out of context. Seems you like an argument more than the exchange of knowledge/ideas.
Originally posted by dmichie:Luci, I’m glad that you have 100% faith that house prices never go down.
Never said a house price can’t go down. Do your research, buy well, and be aware of cycles while holding. I clearly outlined in my earlier post as to why saying “Sydney has crashed” is a gross generalisation and misrepresentation of the situation – with personal anecdotal evidence.
Also, this graph is skewed to only count property growth after inflation.Yes, that’s called real growth. That’s hardly “skewed”, its the only sensible way to measure the capital growth of your investment. BTW, a growth rate below inflation is a real decline.
And – as mentioned already – if you had chosen to sell at the right time, you would have made a huge profit in real terms.
And if instead you had kept your money in the bank you would have suffered greater losses in real terms. Inflation in that period was high teens!
Posted by dmichie:Neither of you are posting information that is paticularly helpful or interesting.Fair point. I try not to make accusations or make personal comments but Robert persists with this “alterior motive” thing over and over.[/quote]
Dmichie, this was not my posting you were quoting or refering to – so please don’t answer it after addressing me personally… others not reading the whole comment chain may be mislead.
BTW I don’t believe Robert was accusing you of having an ulterior motive, but merely highlighting that the market responds to positive/negative portrayal of property. As long as people – especially the media – continue to talk down the value of preoperty investing the market will take longer to recover from it’s dip because people are afraid to invest.
Part of the reason we had such a huge property boom in 2002 was because there was was a lot of fear of the stockmarket with the media bagging it out – so people invested in property instead. If we want more moderate growth instead of sharp rises and declines, it would be better for people (such as the media) to be balanced and factual rather than sensationalising the issue with a different headline every day.
You are free to sit on the sidelines and not invest in property, but if that is the case I don’t quite understand why you patronise these property boards so regularly. Slow times can offer as many opportunities as hot times, as it becomes a buyers market when less astute investors leave the scene. An investor has more time to consider their moves, reconsider strategies, and negotiate with the vendor to their benefit.
Negative gearing was a hot trend about 5 years ago, but is now generally looked down on.
In theory, as I understand it:
PPOR is on P&I loan, and Mum wants to pay off debt as fast as possible because all costs are straight out of pocket (and with after tax dollars at that).
IP is on an interest only loan, which is tax deductible. Mum pays minimum repayment each month (channeling all spare funds into her PPOR).
If Mum is earning a reasonable income from her normal day job, then come tax time she can claim her IP losses (including depreciation) to reduce her taxable income and gain a good tax return.
Say it costs mum $40 per week out of pocket to service her IP ($2,080 p.a.) but she can deduct *all* expenses to do with the property, including management fees, interest rate, depreciation, etc from her total income. She may find herself with a tax refund of considerably more (say $6,000 p.a.) come tax time – which is more money than she personally put in over the year.
Mum puts tax return monies into her PPOR to lower her P&I loan. $6,000 is better than $2,000.
If mum had instead split her disposable income equally between her PPOR and IP, she would have gained a smaller tax return. PPOR is never going to offer tax benefits, while IP does, so it makes sense to pay off PPOR before IP.
This is successful negative gearing – providing a)that you have a good enough day-job income to make full use of tax benefits and b) you are using tax benefits to pay off ‘bad’ debt.
It’s a bonus if your IP also increases in capital value – though many investors would argue that this is not ‘negative’ gearing if the property value is gaining ‘positive’ growth. This could be why you are confused about your mother’s situation if hers is a case of +cg, while others are talking about zero cg and negative cf.
So: when people say ‘negative gearing’ they could mean one of several things. It is indeed confusing.
The term ‘negative gearing’ became misused by property developers trying to sell property to green investors. They pointed out tax benefits, listing it as an income source unto itself – and ignored the fact that many of these investors were not in a position to hold onto a hugely cf- property as they waited till tax time, nor did all of them have an income large enough to take full advantage of tax benefits. Negative cashflow often outweighed the true value of tax benefits.
And if they weren’t then using the tax return to pay off a PPOR or ‘bad debt’ then the whole exercise was wasted. You have to pay the money out before you get more back – and what is the point in holding a property that is cf- and has little to no capital growth?
These same developers often also factored in ‘projected capital growth’ to the schedules to make it seem like an amazing opportunity in an attempt to flog overpriced units. They also tended to leave expenses (stamp duty, land tax, etc) out of the equation, and gave 12 month ‘rental gaurentees’ far above market price so the investor was in trouble once they hit the second year.
The ideal is to be positively geared both by cg and cash flow (making money is always good, even if it means paying more tax) – but this is often unrealistic. You generally have to pick whether cf or cg is more important to you, and choose properties that met that strategy.
A property that only ever costs you money is a dud, which is why most people sneer at negative gearing. But if it works for your mum (I take it she has fully investigated the finanial viability of her set up, and found that it does benefit her financially) then enough said.
Where do non-investors get their “general knowledge” on property? The media.
Generally they will just be regurgitating whatever doom and gloom that they’ve heard from a source that needs a new headline every day.
The media is in the business of selling entertainment, not strictly information. Sometimes it’s solid, well researched articles – and other times it’s sensationalist crap or rewording of a press release (which comes from a biased third party).
Most people never scratch beneath the surface to evaluate whether what they’re reading really stands up to the truth test.
Do your own research. If you come back with a whole heap of negatives and no positives, then don’t invest in property. Do you prefer to believe the general newspapers, or a niche business magazine read by many real investors such as Business Review Weekly? (The latter reports that the majority of Australian millionaires/billionaires made the bulk of their money in property).
And if people use the “but they made their money 10 years ago” line, if you read about these people you will find that many of them were told ten years ago that they were crazy for investing in property too.
There’s always a deal to be done – it’s just a matter of whether you can be bothered finding it. Negative friends and family obviously couldn’t be.
Or they may have found another investing strategy that works for them. In which case, try to be positive about their choices even if they’re not for you. In my opinion this includes shares, venture capitalism and even Amway – people have made money out of all of the above even if it’s not the path I choose.
Janetbianka
Only way to have your question really answered (yes or no) is to do your due diligence. If the numbers add up, then ‘yes’, if they don’t, then ‘no’.
E.g If you want +cf and find a cf+ property then the answer is probably yes.
If you want capital growth, then you will probably only get it in the near future if you add it yourself via renovation. Don’t buy at the top of the range or you may stand to lose money.
You need to work out what kind of property suits your needs – long term vs short term, cf vs cg, your personal risk levels, whether you’re using the bank’s money or your own, etc.
Dmichie,
The aging population problem (fewer young people, many baby boomers) is a National problem – not the least exclusive to Sydney. In fact, the problem is more exasperated outside of the major hubs as young people relocate to where there are jobs, while the increase in older people is simply because they have become older (they generally haven’t *migrated*).
I don’t know exactly what the House Price Index measures (or who they gain their stats from) but my Sydney property has not had a decline, merely a reduced growth rate.
Eg. one property was bought at the height of the boom in 2002 – but I got it for a decent bottom-range price of $405,000.
This was a private sale – not through the auctions (looking at auction results will gain skewed info, as a minority of properties sell this way. Additionally, an Auction is only a good idea for vendors when the market *hot*, so declining Auction clearance rates are expected in a slow market like the current one).
We had the property revalued 2 and 1/2 years after purchase – when it was in the middle of renovation. Ie. the house itself had been de-valued since purchase, it was no longer in the habitable state that we bought it in. Despite this physical devaluation, the bank revalued the property *in it’s gutted state* as being $450,000, and to be worth $550,000 once renovations are completed.
This is a *conservative* bank valuation, and the near identical house next door sold just a couple months earlier for $600,000 with the vendor in a must sell asap situation.
We conservatively expect that on the 3 year anniversary of this purchase it will be worth $600k to $630k.
I.e:
Purchase price = $405,000
Renovation cost = $45,000
End price = $600,000+
Equals $150,000+ increase in value over 3 years.Yes, it would be worth more if the *hot* cg rates had continued – but there has not been a loss here. The market has not collapsed. Even if we didn’t renovate (or devalued the house), there would still be growth in the land it sits on.
The area now has a median house price of over $600k – when it was about $450k when we bought in Sept 2002.
BTW the next door neighbour bought his place in 2000 for $300,000, and sold end of 2004 for $600,000 after renovation and in a must-sell situation. This is after it was declared that the Sydney ‘bubble’ had burst, and he made a healthy profit.
Personally, we don’t intend to sell, and have every expectation that we will have good CG in the mid to long term future.
As always – do your due diligence, and if you buy well you should be right – if you pay too much then you’ve lost money before you’ve even started.
Dmichie – your chart of property prices clearly shows that someone buying in 1980 would have had growth in the ten years following. If they made use of the cycle they could have sold their property anytime from mid 87 to mid 89 and made a profit. (Also, this graph is skewed to only count property growth after inflation. If you similarily graphed the returns on $100,000 in the bank during this time, when inflation was incredibly high, your $100,000 would diminish significantly every year and *never ever* recoop).
You are also ignoring rental yields. In those years where property growth fell, rental rates went up. While property was booming in Sydney, rentals were crap. Now they are begining to go up.
If we are in for a ten year stall on capital growth as your predict, the rental returns will rise to make property cf+. Residex has graphed out the cycles to current day (not available online) and it clearly shows that there are cycles, and that when cg declines, rental yield rises.Does this mean that “Sydney” is the best place to invest? One thing you need to remember is that about 1/4 of the population of Australian lives in “Sydney”. One council area within Sydney can have a greater population than a whole city outside of Sydney. To expect all areas of Sydney to behave the same is ridiculous – it’s like saying all of WA is the same regardless of whether you are investing in Perth or some backwater.
Due diligence is always the key, and it will depend on a persons personal investing strategy to determine the best place to invest (in and out of Sydney).
At the moment, I think you can still gain good cg in Sydney if you pick the right areas and buy below asking price. Residex predicts that my area will bounce back to 12% growth p.a. over the next 3 years.
However, for many other factors I am choosing to now invest elsewhere. Because I am more interested in cf+ properties now. Because in addition to the various taxes imposed on purchasing property, NSW has a 2.5% vendor’s tax. Because I think other states have better government spending on utilities and infrastructure, which make for more sustainable communites (and population growth).
On a personal level I am incredibly frustrated with the NSW state government that has now been in power for 10 years and achieved… nothing. It is Sydney centric, which means that rural NSW is dying. Population increase is therefore increased in Sydney as young people flee rural life, but Sydney growth is unsustainable because they have not maintained or invested properly in planning (and implementing) roads and public transport (or health, education, the list goes on).
While I believe CG is a definite part of Sydney’s future, I forsee an increase in social problems because of the government’s refusal to deal with these issues. Probably not something the savy investor has to worry about, but I’d rather move away from the concrete jungle and explore other opportunities where gvt and communities are working together for positive means.
Hi Simon,
If you’re not in Sydney (and therefore are in a rural university town?) it might be a good idea to purchase a slightly run down multi-room house near to uni and town that you can live in for a while (gaining the FHOG) as well as rent out the other rooms to friends/uni students.
I know a guy who did just that to pay off a 4 bedroom house (and he lived in the garage!). If it’s close to uni, then you can offer a by room rent that is higher than usual for the general area, but considerably cheaper than university accomodation. Students are generally happy to live in slightly run-down quarters, so you can purchase a house at the lower end of the market.
Back in my (rural) uni days, there were lots of people who lived on campus for the first year while they got their bearings and made friends, then they moved off-campus in second year. A lot more people would have liked to move off campus, but the ‘effort’ of finding 2 to 3 other responsible people to go on the lease was too much for them.
You can also ‘rejuvenate’ the house bit by bit with help from friends and family – picking uni holidays to do the more serious stuff. Painting, landscaping, and so on. This will increase the capital value of the property to put you in better stead in the future when you decide to invest in a second property.
I would say it’s never too early to invest – the fact that you’re already investing in shares is fantastic. If you are getting good returns there, you may want to keep at it rather than take on a huge property debt – but the choice is yours.
. Maybe ask for a couple of recent clients who you can call to see if they were happy with the work.
