Forum Replies Created
I drive a 2003 Subaru Impreza RS and my husband has a 1995 Honda Accord. my compromise is not spending the extra cash on the wrx but still having a functional car that I enjoy every time I am in it.
I would love to see next to everybody’s cars details of net worth – or even how the value of the cars when purchased is as a % of annual income. In a lot of cases of driving cars that are really old I would guess these people are just finding their feet in investment. I can’t see why else anybody with any decent money behind them would drive cars that compromise their safety. I see our investment in cars as standard for our net worth. We will be turning the Honda over in the next 12 months for something maybe 12 months old because it’s passed it’s 10 years of life and at that point I think safety in cars accelerates so far that we should update.
often people with old beat up cars spend a lot of money maintaining them. My car is still under factory warranty and basically costs me servicing. I do take it to a non-dealer servicer for handbook services as it saves me a lot of money however my car gives me a great drive (I travel a fair distance to work), suits my lifestyle (AWD is great at the snow) and has the space I need for my life along with airbags, ABS and all that comes with something newer.
I am suprised not to see a few more cars in the $50k+ category. I think anyone with a combined family income of $200k is crazy if they’re not enjoying some of the fruits of their efforts now if they can afford it. after all – you never know when your time is up. Maybe the people with the big income just aren’t showing their face here and watching from a distance because they may get scrutinised.
great topic though – I understand where people are coming from with not outlaying huge amounts on cars, and I think it’s great to put it out there that often the BMW’s are getting driven by people who will owe the bank money well into retirement. I would be lying if I didn’t say I know a few ‘Jones’s’.
Just to clear a few things up:
$246k was not a low ball offer for the area. The asking price was $240k+. A lowball offer would be in the $230’s.
The offer I put in was on the day that the section 32 was released. The vendor would not have been receiving offers before this.
The price the house sold for was $251k. This does make my original offer of $246k a reasonable initial one. As an investor I would be costing myself money to not start around this mark. I have not known anyone who’s first offer is also their last other than in set by sales.
The point of my post was part whinging on the experience I had, but also demonstrating the way in which real estate agents act.
My biggest issue with this whole scenario is the fact that the agent has chosen to act in their own interest above anyone elses. If I was the vendor I would be extremely unhappy with the agents actions, especially since he now knows he could’ve got more.
I played the cards the way I chose, I tried to rectify it by contacting the vendor in an attempt to seal the deal, but hey I didn’t win this one.
There will be another around the corner.
ah yes, forgot to mention where I am.
In Melbourne.
Bill Johnson, unfortunately I am in the market of buying a property at a market price, not putting the highest possible offer forward first. Had the agent told me that under no circumstances would there be negotiations I probably would have put an offer in of $260k, even though my limit was 265-267k. However, the agent did not tell me this.
There are only 2 reasons I can see for this particular instance happening:
1. the agent acted in their interest and to be honest didn’t even really try to drive the price up in getting first offers
2. the agent has done a personal deal which probably means cash directly in their pocket to get a deal for a ‘regular’ client. The agent has then pressured a vendor who doesn’t really know how this all works and has got the deal through
I would love to think number 2 scenario doesn’t happen, but unfortunately it’s the only other reason I can see for this occurrence and there’s no way I can prove it anyway.
I am likely to even avoid looking at property for sale through this particular agent again.
Well I did in fact ring the vendor to tell them if they hadn’t signed anything i would be willing to give them $10k more than the offer they’d accepted. But the vendor said the deal had already been signed. I told them that I never got a call back to negotiate and the vendor was a bit confused as to why, but at the same time I think the agent turned up at his place, put the offers in front of him and put pressure on him just to take the highest one. means the agents fee gets paid.
I will have to move on to loking for the next property now. I will never be using this particular agent to sell a house becasue i know they would put presure on me tojust accept what comes in and not work for their fees.
Great advice Ray. Just goes to show that agents are not always acting in your interest. I had a bad experience with an agent today so reading your story doesn’t suprise me at all.
Sounds like you ended up with a great deal – no agent fees at all and more rent than any of them thought they could get! Good job.
Propery Passion, i can relate to exactly the same circumstance.
we are currently looking to buy and subdivide, so this will be our first development. We are pretty switched on and have been researching etc and also have people around us that have done this sort of thing before. So, with some hard work we’ll be on our way to more developments in the future. However I have had the same thing happen like advice to just buy an investment, put a tenant in it and let it sit. to me, this is pointless and adds no value and no real challenge. the whole point of my project is to add value to a property as well as build a new one at cost.
there are a couple of reasons I see this happening:
1. they don’t want to see anything bad happen and see that there is risk involved with what we are trying to achieve
2. they are jealous that they don’t have the willingness to pursue such a project, and probably not the finance either
these are the only 2 reasons i really see.
how to overcome it – i don’t know. i’m still working through that, though i think the best way is if speaking to these type of people about the topic of your project, you speak to them like it’s happening regardless of what they say. they will be less likely to offer negative feedback.
on the other hand, we also have people (though fewer) who fully support what we are doing and can see where we are trying to get to. and i must say, those people tend to be more financially secure and managed risks well in the past.
I am 24 and bought my first property with my partner when we were 22. We spent the first year renting it out to save money for a renovation and lived with parents. We then kicked the tenants out and moved in and have fully renovated the inside which is now a fantastic property to live in which we never could have afforded to buy renovated at the time.
With the equity we now have as well as reducing our mortgage we are now shopping for an investment property to do up and create further value.
People will always say the market is too expensive, it will drop, it’s not the right time. People were saying that when we bought, and since then we have added value through a renovation as well as had growth of over 30% in the suburb we live in. That’s a lot of money we have saved by getting in earlier rather than later.
Somebody once told me property will never be as cheap as it is today!! And it’s true. there will be ups and downs but the general trend is always up. Inflation causes incomes to rise over the long term hence allowing property prices to rise also.
i have worked very hard at creating a career that enables me to earn extremely good money for my age and this has helped enable me to pay down my property as well as look at investing further. anybody out there can do it.
if you haven’t invested before this may be a bit over the top in terms of budget.
even if you bought the land for $500k, to add 2 units would cost another $500k. that’s $1m in finance. to support even interest only repayments would cost you over $1k a week.
to get the finance you would probably need income of $150-200k p.a.
the only alternative would be to get outside financers who are willing to put up some security.
i’m back – have been on holidays.
the lender came through with the discount finally. I didn’t want them to know I am planning on extending my lendings as I wanted them to give me the discount regardless of that.
i’ve started to look at some of the professional packages around. meeting with a few of the banks to consider what’s available. when we bought our first property a simple loan suited us but we have since increased our earnings which enables us to do a lot more.
I would have thought that since I have already made LMI on the $253000 purchase to 95% I am able to refinance this to 95% less payments on the mortgage that I would have to have made.
On the $320,000 valuation I would have thought I could borrow 80% of $320 less 253k. so 80% of $67k is $53k.
Is my theory stupid from a banks’ perspective?
this is a tough one. It’s good that you know the direction you want to go and now you just need to figure out how to get there.
The easier and what would seem like the faster option is to forget uni for a while and try and progress the property thing and work somewehre, long hours, maybe two jobs to get some sort of deposit together. thing with this option is that you’re working so hard earning money that’s not great to pay deposits, or keep up income to be able to keep on borrowing that it’s hard to find time to even think about property investing.
the other option is to keep on the education path for a while, keep a part time job on the side and then try get some money together for property. this is possible, particularly if you are studying in the commerce or business area as the commitment at uni is low level. finishing the degree makes you much more employable too. i did this and studied full time for the first two years, went to work for a year, then finished my course part time. i bought my first property at 21 and now live in it and am looking to buy another this year. though I have learnt a lot from steve’s way of working, i am following the renovation / capital growth path in metropolitan melbourne. not saying positive cash flow won’t work, but i’m happy to spend a while in the workforce and keep property as a side thing because ther’s also a lot to learn about project management and general management while your young int he workforce. i don’t know anyone my age who earns anywhere near the sort of money i earn who hasn’t completed a degree. in fact, most of them earn 1/3 to 1/2 of what i earn. that makes a big difference when it comes to being able to talk to lenders. so don’t discount getting a proper job for a while, because it will enable you to have a better lifestyle and afford more property.
from the first option you will earn average money and will struggle to live the lifestyle you are probably imagining because you will need over 80 properties to make it happen.
from the second option, you can do the property thing on the side of a full time job and have a guaranteed income whilst also generating money outside of work.
i’m not saying either option is right or wrong, I’m just saying in general if you want to generate cash and save some money first option 2 is the better way to go to build wealth.
You should have told her maybe if she didn’t waste her time reading such a newspaper you would have grounds to pay her more
[biggrin]
I don’t exactly fit your spend profile of first home buyer because I have actually prucahsed my first home below the 350k you mentioned.
I went to Steve’s book launch in Melbourne and one of the comments he made that has stuck in my head is about instant gratification. These words explain our society to a tee. That is why this is happening – but your question is about how.
Yes there are people not thinking, they are getting credit too easily and I can see that this is going to become a huge problem in the future.
But I will tell you how I did it and still live a comfortable life. we purchased our first property for jsut over $250k last january in the eastern suburbs. instead of spending 300k straight up we bought something to fix up and have since spent about $25k renovating. we spent 12 months saving the renovation funds after we purchased and have nearly finished a lot of the changes. doing this has enabled us to build a nice amount of equity in our home now as we contrinuted our own cash for the renovation as well as seeing growth in the area in values and via the improvements. we have all the bobs and whistles. over 20 squares of living, new everything, billiard table, swimming pool, stainless steel fridge, dishwasher etc, basically we have everything we want – that’s the instant gratification part of me. i want it all now, i don’t want to struggle to create wealth like my parents had to when they were young.
we still lead a very social and relaxed lifestyle, go out a lot, holiday a lot, drive cars that we are happy with and we still save a reasonable amount each week. how do we do this – we budget big time. if the entertainment and food budget runs out, then there’s no going out for the rest of the week we just find something else to do. but how do we have the money at the age of 23 to live the life we want? we went to university and are willing to work hard. we are not planning to have children in the near future and the mortgage should be gone not long after we turn 30.
i think the answer to living the life you are talking about is budgeting and prioritising to know exactly what you want out of life.
I agree with you that there are a lot of people i see that are going in way over their heads. but you only hear about those ones, you don’t hear about the people doing it, living a great life in melbourne and being able to pay for it all. i get fed up every time a first home buyer says to me that it’s so expensive. if they chose to prioritise and buy into property instead of buying the new car, going on a european holiday or whatever they are doing with their money they would be able to do it – it’s just that their priorities are elsewhere.
So in answer to your queries – i don’t know how first home buyers are spending $400k without at least a 100k deposit or more but i do know you can still have a great place for less than that as a first home buyer.
you say you are building with your girlfriend and then you reference yoru partner as a he!!!
i want to own 15 properties outright with a minimum value of $200k each.
i want a total income of at least $100k before taxes etc.
this is in todays dollars!
how can you pay yourself first without knowing what it costs to live.
i have friends who are deluded in terms of what it costs to live and they think they are saving heaps of money but in fact then the car registration and insurance come in and $1500 goes out the door right there. because they haven’t budgeted all year for these costs their bank account dwindles fast.
even with kids and co i think a budget is very important. it enables me to reach certain goals. without it i wouldn’t be able to make confident decisions.
if you only have $13k now and are relying on the FHOG to be able to get all the funds together I am assuming you intend to live in the property. You will need to think about the cost of setting up house if you haven’t done so. the ongoing costs are rates, utilities, bills and upkeep that often add up over teh course of a year whilst still paying the mortgage.
you may want to ask some people here about these things and budgets for expenses.
They can only tell you what they can find on a tenant.
for example, I had a tenant who was a major problem – never paid on time, took weeks of small payments to be fully paid up and by that time it would be the next months rent due. In the end after giving them 2 or 3 months notice, whatever was required, we had to get a warrant for the cops to get them out. They left before the cops had to go knocking on the door, but the house stunk of animals and smoking, I still get mail to all the people that ahd been living there (there was only meant to be 2 adults and a kid) and if it wasn’t for teh fact I was ripping out all flooring and redoing inside I would’ve sued them for probably all they were worth (all $50 they had!!). anyway, I think you get the jist of the problems I was having.
BUT, I did not register an issue on the system that agents use because I just want to get them out of my house and make them someone elses problem. I don’t care if they go live in a drain or what, I just want them out. And once they were out, what was the point of me lodging a complaint. if these tenants found out i lodged a complaint then who knows what they would be capable of! so, the agents can only tell you what they find. there are hundreds of stories like mine that ahppen and never get lodged in the system.
nope, no chance. the FHOG is a policy driven by enabling people into the property market, but also to drive the property market here.
If you’re only going to sweden for 6 months why not just buy here before you go and rent it out. it will be much easier to manage too.
swedish prices are not cheap.
