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just purchased a toyota 86, currently has a two year wait. would be one of the few cars where buying second hand would be more than buying new because people want to jump the queue. was offered 3k more than what i paid for it when i went to pick it up. the investor in me wanted to sell it right then and there! as long as the high demand with a limited supply continues, i will have a pretty good re-sale value
also, just to add a little more, the cut in stamp duty is rather pointless IMO. for a purchase of $300k, it is a saving of $2274 at 20% and $5685 at 50%. however, you are only entiatled to the state governaments extra $13k if you are building a new dwelling. generally speaking, most first home buyers wouldnt be able to afford buying a $300k block of land and then proceed to build a house on it, which could cost up to $300k. therefore if one buys a block of land for, lets say $150k, then the stamp duty savings are $1137 and $2843 respectively. hardly enough to get someone into the market,
John,
You can breathe a little easier now the time being. At the moment the current plan is to continue with the first home owners bonus of $13k. Of course, on top of that there is the federal governments FHOG of $7k. therefore after june 30 first home buyers will still be able to get access to this money. additionally, the government is introducing cuts in stamp duty. for the first year it will be a 20% cut in stamp duty and will progressively go up until if gets to a 50% cut in september 2014. I too was somewhat worried about it going because I am still eligable. while i agree with fword in that it doesnt help with buying your first property greatly, at the end of the day, i get and extra $20k that i wouldnt have otherwise recieved.
further info can be found here here and here
http://zincip.biz/2011/05/05/victorian-budget-good-news-for-home-buyers/
because i have no experience in builing in these rural areas, how much would it cost to get someone to buiild me a house (excluding cost of land). for example, a basic 3-4 bedroom 2 bathroom double story house.
Jamie M wrote:Hi Matt I don't know why your parents would suggest that. You can get the most depreciation out of a new dwelling. Cheers JamieI don't get it either. their theory was that it costs too much to get the house assesed. but if it was to cost $500 to get the report done and i was to get a tax refund of $1000, then im up $500. what they are effectively saying is that if i went up to them and said if if you give me $500, i'll give you $1000 they would turn the offer down. Being a student, I am in the lowest tax bracket, and expect to be until the 2013-14 financial year so i dont anticipate getting a whole heap back, but getting something back is better than getting nothing back. Ill try and knock up some figures to persuade them.
JacM wrote:Something that is important to remember is that you don't have to invest in the major cities if you don't want to. It's not the only way to wealth creation. Don't let anyone tell you any differently. As you point out, if you can't afford to make up the difference between the rent and the mortgage, the plan ain't going to work anyway.
I will however encourage you to read up on "depreciation schedules" if you haven't already. Basically the building, carpets etc depreciate over time, and a quantity surveyor can produce a depreciation schedule to give to your accountant that will result in tax refunds for the next bunch of years, which often converts a property that is "bleeding money" into a property that is NOT bleeding money. Generally you'd be after something as new as possible, as the depreciation benefits are higher.
All that said, there is infrastructure coming Ballarat's way (I believe a new train line so the Ballarat folk commuting to Melbourne do not have to share a line with the Melbourne Metro trains….. check on this, it's something I've heard on the grapevine). And it is always to invest by means of leveraging new infrastructure that makes an area more convenient to live in. It is also intended that Ballarat will become a satellite city, since as the Melbourne population explodes, sooner or later it will not be possible to ferry everyone into Melbourne each day for work. So some people will be ferried to Ballarat and Geelong, which will have major employment centres.
I'm all over Geelong at the moment, leveraging new freeways, train services, and the forthcoming upgrade of Avalon Airport to become an international airport. Ballarat is next on my list. I'm thinking 2 bedders close to the hospital and unis, so that rentability will always be there.
Without trying to hijcak this thread, i have just built a house, and was going to see if i could get a depreciation schedule organised. as my parents have had a bit to do with the loan, they have some sort of interest in the property too. i suggested getting a depreciation schedule, and they waffled on about it not being worth it because i wouldnt have much to depreciate. out of curiosity, how much could i be looking at getting back in each of the first five years, the cost of building the house (townhouse) was 230,000 (ie, land is not included).
as for the original post, ballarat isn't a bad place to invest. what you must do first is develop an investment strategy and see if buying a house in ballarat will be in line with your strategy. one positive with ballarat is that it is not reliant on one industry like many mining towns are. therefore if one of the industries goes bottom up, there is less of a risk of the town turning into a ghost town.
just another quick one, as i currently own an investment property that was built in the last 12 months. when the tennant does deicide to move out at some point in the next year or so, am i then able to claim the FHOG if i then live in the house for a 6 month period, despite the fact that the state government's grant is no longer available?
ALF1 wrote:G'day Matt.
Knowledge on its own is NOT power. Gain the knowledge and do nothing with it is meaningless. Knowledge + Action = Power!
May I suggest you start buying Australian Property Investor magazine from your local newsagent – HUGE levels of KNOWLEDGE. Also, checkout the Investment tab at our website and see if this is further knowledge you can use."Apply yourself. Get all the education you can but then, by God, do something! Don't just stand there, make it happen!" Lee Iacocca CEO Ford Motor Co.
sound like something out of how to think and grow rich
as for the API mags, im already subscribed, have been for a year!
so the general consensus is to read up as much as i can and get my networking started!
Skyes,
Yes you are correct, i did find it extremely difficult to get a loan and in the end i was unsuccessful. I was fortunate to have my parents help me out by borrowing against their porperties. However, although the loan is 'theirs' they do not contribute anything to the loan and the onus is on my to pay the house off. While this was not my preferred option, it was better than not buying a house IMO. However, in saying that, I have two friends that have bought houses while at uni, and had no problems sourcing a loan. Although I am unsure of the details of the loan (one of them had his parents guarantee his loan) it goes to show that its not IMPOSSIBLE to source a loan.
Jake H,
Scotty89 is correct in saying that I am still eligible because I haven't lived in it. I have listed this house as an investment property which still means that I am eligible. Obviously there are some risks/negatives associated with this. For example, the government might decide to scrap of lower the FHOG in the comming months, therefore i missed out on X dollars. Another negative is that when I go to sell my property I have to pay capital gains tax, whereas it i could have avoided it if i didnt have another house listed as my PPOR for 5 (is this correct?) years after moving out after my initial 6 months of living in the house.
However, the biggest factor for my not going down that path was affordability. Because I am still a uni student, i am by no means on big money, and moving out of home for 6 months would have meant that i would have to fork out $500 a week to go towards my loan, and then any living expenses on top of that ie. groceries, feul, bills etc. This meant that I would have required at least $800 per week just to get by. further, i would have missed out on my chance to get the above average rent as the tennant would have gone elsewhere and there would have been no chance of me getting anywhere near that rent from someone else. basically you have to weigh up the pros and the cons to how you wish to use your FHOG and remember that ivesting isnt supposed to put a financial strain/burdon on you and your family, instead its supposed to assist with becoming more financially independant.
although i may be in a different situation to you, buying property while at uni isnt as hard as most people think. i am currently at uni, studying mechanical engineering an commerce and so far I have had ridiculus contact hours compared to many of my friends. I have regularly had 25 ish contact hours compared to the 12 that my friends have. however, as others have stated here, the key to getting yout first house is to save up for a deposit.
i bought my first property in an outer suburb in melbourne in june last year, and had settlement in around november. the house is set to be finished builing in the next month. i already have tennants linned up, and will be getting $100 more than the average rent for the area. although i have been quite fortunate in getting the tennants i got, i am unable to use the first home owners grant, and hope to use it on my next property. the property cost around $330,000, and i expect it to be worth around $390,000 once built. I do not intend on selling it untill the tennant leaves, and the area has had the next stage of developments ie. the shopping centre that is to be built 2 streets away.
anyway, to get a large enough deposit, my thought process was that if i could save $200 a week, i would have saved $10,000 for the year. while i realise you may not be in a position to save that much per week, it would be wise to set a terget for where you wish to be in 5 years, and work your way back from there. ie. if you want to have 25k saved, you need to save 5k per year which is about 100 per week.
also, try to cut back on unneccessary spending, ie buying take out when you could make yourself lunch/dinner. or catch the train to uni instead of driving, or buy second hand text booxs instead of new ones. another thing that i did was keeping a money box. whenever i went out on saturday night and came home with heaps of coins, i would put it in the money box. or if i bought something, and had a few dollars change, id put it in the money box. this stopped me on spending it one something rubbish likc a chocolate bar while i was at work, and when i opened the money box last week, turns out i had a little over $1000 sitting in there…it all addds up.
however, the best piece of advice is to just continue learning. read books and go to free seminars. even borrow books from the library, that way you dont need to pay for them. hopefully it is not long before your on your way to buying your first house.
kong71286 wrote:Hi Matt,I would like to commend you for thinking about investing so early on in your life, and am glad to hear you have so much support available in your family – you are already off to a very good start, and the fact that you have already saved up $25,000 despite only being 20 years old, shows something about your character. Most people your age only care about 'instant gratification' and having fun now, without thinking about the impact their lavish lifestyle will have on their financial future. Once, again I commend you for being different from the crowd…
Thanks for your words of wisdom there guys.
Kong, while I am flattered with what you have said about my ability to save, I must admitt, I do tend to also splurge a lot on various things. I recently bought myself a jet ski, have spent way too much on my cars stereo and i have a girlfriend who i tend to shout a lot of things for, and every chance I have to go away i jump on. However I think its my dicipline that allows me to do such things as when i set out to buy something I make sure that i save up for it eg. If i have 20k in the bank and i wanted to buy my jetski worth 8k I make sure I dont buy it until I have 28k in the bank. Also once uni starts I cut back as i begin to earn less, thus i only spend within what i can afford (unless its necessary like text books).
anyhow, enough about saving! ouchiemama, my greatest hesitation about buying property overseas was exactly that, not being close enough to be able to properly be in control of the property.
At the moment I most of my money in a term deposit which expires in november and I am hoping to have a total savings of around 30k at years end (although i may fall short of this target). Lets say this is the case, if i happen to find a cheaper house that is CF+ around the 100k mark, would it be a good idea to possibly purchase it, or am i best to hold off to a later date (ie. once graduated).
one final question for the night, if i were to hold off till after i graduate, should i look to buy shares so that my money could potentially rise, or should i just let it sit in a high interest bank account/term deposit. I personally think shares are the way to go, but I am hesitant due to my limited knowledge of the market, and becasue at the moment no family members have taken the plunge to invest in shares so they are try to push me away from going down that path.
regards
Matt
sorry, just to add some further information. May father, uncle and granfather are sub-contracted truct drivers (grandfather is retired now) so they have their own company. Is it possible for me to use it as a way to borrow more money, maybe set up my own company and have their company own mine (not sure if i want to be part of their company)?
