Forum Replies Created
i too would be looking at releasing your mum as guarantor. although if shes happy to support your property investment goals and aspirations then your option 3 is probably not a bad strategy. i know that everyone is different, but your mum has obviously been kind enough to help you in the start. maybe now she wants her equity back to do other things herself. i would be paying her off, and with whatever money i have start improving the property to increase value. with the increase in val comes equity to then buy a 2nd property perhaps.
Eric
a property is cashflow positive when the incomings exceed the outgoings (interest cost, maintenance, strata etc.etc.). it really has nothing to do with what level of deposit you have. you make no mention of your current asset situation so if you dont have any equity in a property already you will need to find 20% for a property anyway, unless you you find a lender willing to lend you more (which means you may not need as much a deposit). bear in mind that you will have to pay mortgage insurance if you do go over 80%.
hope this helps.
Eric
techhowse,
let me say that someone of your age who is thinking about property investment, SHOULD NOT BE DISCOURAGED. A big well-done!!!! (I’ve already started talking to my kids about it and theyre only 4 and 5!!)
i think though you need to understand that initially most (and I say most) get into property investment as a part-time or side-line affair. i bought my first property at 18 but did have a considerable amount saved from working throughout my teens selling newspapers etc. you dont mention what your financial capacity is?
anyway, my advice to you would be to take `baby steps’. think about what career you wish to follow. if that means going to university then go. when established in a job, stick to a conservative budget. save like crazy. if you can live with the folks then do so. save more. depending on what your savings look like, the next step that i would do is to speak with a broker. try to find one that is independant and is willing to help you on your way to property investment. i guess this really does fit in with point 2 of your original post. dont be impatient. there will always be opportunities for you to enter the property market. i think right now you need to establish your financial base before you can literally start building on it. i think by following this approach you might even convince your parents that you are serious about property investment and getting ahead in life. best of luck to you.
Eric
how you organise your paperwork is a matter of personal preference. i know some people that take hours if not days to find important documents! personally i have a filing cabinet with suspension files relating to each of my ip’s which are then divided by manila folders for say purchase doc’s, tenancy doc’s, utilities etc.etc. the key to it is organisation. it shouldn’t take you more than a couple of minutes to find important paperwork (especially useful when tax time comes or when your with your broker….)
eric
hi radek
if you can pick up a bargain because of others stigma with the area, then that must be your gain!! do pick in areas that perhaps are not in the middle of the `problem areas’ and then you should do well.
eric
good old nrma now offer landlords insurance. ive always found the nrma to be H E L P ful….
hi veronica,
i own a property in queenstown, tasmania (another mining town). while the returns are ok, you will find that cg will be static or at best very low given the huge reliance on the one industry. sometimes the only employer in the town. when the resouces boom of current starts to go off the boil you will start to see vacancy rates start to increase as residents of these places lose their jobs. do your research carefully i say.
perfectly clear analysis esshole. thanks.
shelley
seems like you have some good responses to your question/s. may i add my 2c worth (or $100k worth as the case may be [smartass]!!!)
if it were my parent/s, with the state of the market as it is (buyers), i’d be suggesting that maybe consolidate bad debts (cc’s, store purchase, loans etc.) by refinancing the ppor. ive personally been in the same `boat’ before and after doing this free’d up alot of cash. was able to avert the costly scenario of selling etc. as i think one of my fellow forumites mentioned, selling for the sake of relinquishing debt is expensive. refinancing the way to go. all the best, eric
ajay
great to see that someone as young as yourself taking the big step into property. well done. however while your questions are perfectly valid, I dont think you will get the kind of information you need to make a valid decision. as you can see from the various forum subjects, there is varying degrees of opinion as to the state of the market. personally i would have thought that the areas that you have selected are good growth areas. probably better that you look at some of the property reports for your area to gain a better insight into price history. as far as whether its the right time, hell ill probably get lynched saying this but now is as good as anytime to buy. some would say to hold out another few months as the effects of interest rate increases start to bite in. but if you have an opportunity to buy a good property on the basis of the numbers then i say go for it. good luck.
absolutely…..right anubis!!!!! its a fact that the catholic church is run like a business. the mafioso that run the church certainly have their fingers in all the pizzas….opps i mean pies.
id have to agree with woodsman. reading books is one thing but im not sure if anyone here will be able to tell you with any degree of accuracy where to start without knowing your own situation. ive always found that a mortgage broker is the best one to speak to first about your investment plans.
ive read that same article by John Edwards, and cant help but be totally confused with all the messages that abound. some say flat or very low growth others like Edwards suggest that, `…the slump was drawing to a close and house prices would be on the move again this year.’ i thought we were just entering the slump?????? anyway if you look in API’s april edition this phenomenon of actual vs perceived growth gives some credence to Edwards statement. [baaa]
simple advice: LANDLORDS INSURANCE!
welcome to the forum solomon. if the challenge is to answer your brief question, its like this.
you need to start small. if you haven’t yet secured a principal place of residence (ppor) then do that first. the idea is to build as much equity that property first. then and only then are you really able to start talking about investment properties. Sure some here will say that you can do it on as small amount of equity as possible but thats just plain risky if you ask me. Why do you have to `…live in it for 6 months…’?? not sure what you mean by this. Good luck, Eric.
dazzling i hear you now. thanks. ofcourse all these things that you mention are things that can happen anyway, anytime. i do happen to be in contact with a very good local tradesperson in the town. and yes i definitely agree with having a buffer in the event of a problem, which i already have. thanks dazzling for your input. and i like your comment hutch about being approachable etc. thanks hutch.
i dont necessarily believe that any question is necessarily stupid as such. however you ask some very broad non-specific questions which i think can be answered very competantly from a book. There are some fantastic ones out there. Ive just finished reading one by Jan Somers and found it very easy to read. You can make a passive income from property, its a matter of finding out how.
i definitely like your idea skippygirl, and infact done this prior to reading your post. thanks anyway.
to Dazzling, im not sure exactly what you mean by extra costs? what extra costs? if anything it will be cheaper wouldnt it?
thanks to all who replied. much appreciated..
Eric
hi Cathnniv
im not sure who you are talking to about your finance, but i suggest that you find yourself a competant and keen broker and detail to he/she what your plans are. i did this a few years ago and to this day still deal with the same broker who somehow manages to find a way of making things work to our advantage. the problem however that i see with your situation is low income. serviceability is more important to most of the mainstream lenders than equity in a property. and as far as how others do it on average incomes ($50000 pa etc) depends on whether the property is + or – geared. if negative then i suspect damn hard. you only need to read the report on negative gearing on this very website to see how badly the numbers come out. if i were you, i wouldnt rush things or be impatient. you should really be looking at ways of increasing your income or reducing your current mortgage so that you dont need to borrow as much for the subsequent propertys that you intend to purchase.
im with jo on this one. what the hell is wrong with buying and holding??????? youre such a pessimist foundation !!! and you needn’t be some smart arse by harping on about economics 101. again what the hell has this got to do with the current forum subject???? get a grip foundation. everyone is entitled to their opinion
