Forum Replies Created
- Serena61 wrote:Its not about the 15 dollar profit now, its about what it can become, in five years time that properties income will fuel another and probably double what you pay today. I wished I had the money to do it at 19. Because at 19 I had the foresight you had, i even knew where I wanted to buy if i had the money, but commitments like school / uni etc, but with no money – it was a ball breaker. Today I looked back, had I done so, I can retire before i even hit 30. Sadly I had to start at 24. and now retirement age seems another 10 years further.
I used to study a subject that talks about what money is worth tomorrow. Simple really, a dollar today is worth more than a dollar tomorrow. Start early…
Yeah, I think my commitments will get in the way too. Uni takes a lot of time, so I can’t work full-time. Although I could afford mortgage payments, it’ll probably take me a while to get all the money I need for the deposit and added costs. Plus I’m planning on investing in a managed fund soon ($1,500) and going on a trip to Vietnam in December ($4,500). So getting the few thousand for the home loan seems a while off. The sad thing is, by the time I’m in a place to save the money, more commitments will come up and it will be pushed back even further. I wish there was a way I could get started and pay the costs off in installments with the mortgage. It seems like I’ll never be able to get there.
Jamie M wrote:Hi NaledgeYou generally have to provide 5% genuine savings over at least a 3 month period. There are other costs involved in purchasing as well such as stamp duty (which there's often concessions for first home buyers), legal fees, govt. taxes, etc.
So, roughly, purchasing a unit on a 70,000 home loan, what do you think the other costs would total, without the deposit?
joehann wrote:naledge – Only if you live in it for 6mnths in the first 12mnths from settlement.Have a read of the forum and if you've got a questions particular use the search feature.
Will do, thanks.
JacM wrote:To get the homebuyers grant, you have to live in the property for a bit before you rent it. 6months I believe.Back to the matter of getting financially independant… forget about this business of living off the rent in the first year of ownership. Think more like this:
– Hold onto the asset until you've paid it off, at which point the rent can supplement your income, or be an addition to your superannuation
or
– Hold onto the asset for a few years till it has gone up in value, ask the bank to revalue it, and the amount by which it has gone up in value (known as "equity" can be used to buy a second property. This is where your personal wealth starts to get really interesting. You repeat this process a few times, and then in 10 or 20 years you sell a couple of houses, pay down all the other debt, and bam. You are debt free and the proud owner of a bunch of houses that pay you rent as an income. Yay!Oh right, I read a few different articles saying that you could defer the deposit payment, get the homebuyers grant and then pay the deposit with that. I guess that’s impossible though, I doubt a bank would want to wait six months for you to pay the deposit.
I didn’t want to live off of the rent. I study full-time and work part-time. I can live off of that, and when I finish my degree my income will be even higher. What I want is for the rent to completely cover the mortgage payments.
I earn enough that I would be able to cover mortgage payments if I need to (if there is no tenant to pay it for me with their rent). But to save up $7000 for a deposit would take at least a year, probably closer to two. Is there any other way?
I have another quick question. If I was to get a home loan, instead of paying the deposit upfront, could I use the First Home Buyer’s Grant to cover the deposit?
Jamie M wrote:Hi naledgeWelcome to the forum.
Age is only a number.
The bank doesn't care that you're 19. They care that you have a) A deposit to put towards the deal b) That you can pay the loan
Your right about that $15 p.w profit not being worth it. It would be a waste of time. However, what if that $70k unit was worth $140k in 10 years time? Is it now worth it? That's generally what investors are after, the long-term capital growth that property can offer.
Imagine having a few of these units, all appreciating in value while the tenant and tax man help you make the repayments?
Read up, do lots of research and save some cash. When the time is right, you'll be clued up and ready to enter the world of property investing. There's a heap of good books – if you do a search on the forum you'll find some recommendations. Grab them from your local library. Free resources like this forum are priceless – pardon the pun.
Starting young is great – and I'm all for it! But make sure you balance it out with living as well – you're only 19 once!
Cheers
Jamie
Thanks for the great reply. I’m really in it for a long term profit, but it’d be nice to be earning a little bit off of the rent. The main issue I have is if nobody rents it right away or if the tenants leave, then there’ll be a period of time where I’ll have to make all the mortgage payments myself and that might get a bit hard when adding in all my own living expenses. I’d like for there to be a way to make around $50 per week profit from the rent that I could put away for times when there are no tenants.
I thought I might as well add; the reason I’m doing this is because I need financial security. I grew up in a low income household. I don’t want that anymore. I want to be financially stable in the future, I want assets, investments that I can rely on. I want to have a comfortable life and a comfortable retirement, not living from one pay cheque to the next with just enough money to live on. This seems like the best way to go, correct me if I’m wrong though, I know there’s a lot of hassle and a decent amount of risk.
