Hey, I just finished reading “From 0 to 130 properties in 3.5 years” and have to say it was extremely interesting. I just joined this forum and have noticed that many of you are already deep into the world of positive geared property investment.
I would appreciate some advice from anyone with more experience than me (which is basically any
) or just with an opinion to share.First of all, my situation; I am 18 years old and am commencing my tertiary studies this year. – Psychology/Commerce: Accounting double degree. I am very ambitious though and have begun a new savings plan wherein I invest 50% of any money/income I aquire into a savings maximiser account (5% variable interest pa) and do not touch the money under any circumstances. I hope to eventually use this money as investment capital but realise I probably have a long way to go yet. In 3 months I have saved app. $1,300 and am earning a minimum of $200 per week ($100 of which is immediately saved). I am only able to do this as I am still primarily financially obligation free (living with parents), and the living/lifestyle expenses I am responsible for can be easily covered by half of my income.
My problem is that my only investment to date was based on a supposedly reliable tip in the telecommunications industry. I rushed into it and invested all of my savings at the time ($2,500) into the company via the stockmarket. In a matter of a month the value of my shares halved and trading was suspended until June 2005. This has made me particularly sceptical towards any further risk-related investments.
I have secured the interest of 2 of my friends in forming a partnership in the future for positive geared property investment. One of them is beginning work as a real estate agent, another starting an accounting cadetship at PWC. I believe I am fairly familiar with the 5 types of property investment now, so would be grateful if someone could answer some questions which I have after reading the book.
1.) With the benefit of experience/hindsight, what do you think is the best jumping off point to begin creating a property empire (strategy such as wrap etc)?
2.) When do you think we should begin investing (in terms of time, knowledge, job security and financial position)? This mainly relates to the difficulty of obtaining a loan from the bank.
3.) Any other information, tips and/or feedback which may relate to me?
Thanks a lot in advance!
(and sorry again about the length of this post).yes. its good that you have started early and learnt the benefits of real estate investing. You have time on your side. Do it right so you dont get sick of it and never do it again.
Do you really think now is a good time to invest in real estate? do you really want to have properties miles away from home and have the management responsibilities of those.
Finish your education. Thats what will allow you to generate your income. its also something to fall back on. Have meetings with your friends and discuss property investing. But do not OVER commit.
Find a mentor. There are many people out there happy to help. Your main focus should be your education then property investment.
Yeah and dont forget to have some fun, have a few drinks and do a bit of travelling. Your so young
Hi Rezix
congratulations on having started on your way towards financial freedom. I absolutely agree with saving as much as possible, and living with Mum and Dad as long as possible (I’ve come back home in the last 18 months, and I’m 29 in a matter of days[
]).The best thing that you can do is keep saving as you are. If you are looking at buying jointly with your friends, encourage them to set targets for what they also will save, and occasionally check up on each other, and encourage.
The best advice is to keep saving until you have enough for a 20% deposit and costs – and don’t rush out to buy any old property just cos you want to get started. Start doing research, and number crunching, and keep learning. Soon your practised eye will be able to spot a bargain a mile off. Then when you have enough cash to embark on the first one, start your crunching in earnest.
And don’t forget to keep asking questions on this (and other) forums. There are so many people who will answer you willingly with different experiences and ideas, and what’s more it’s free. You might also get some useful contacts to form your team (accountant, solicitor etc.)
Good luck[^]
Cheers
MelHaha thanks for the replies yack and mel, and sorry to bump a dead topic but I have a hard decision to make now.
To pay HECS upfront or to continue saving, if I pay my HECS upfront, I receive a 25% discount, meaning every dollar I put towards it will save me 33c later. My accumulated HECS debt would also be indexed annually according to the CPI (Inflation).
I’m really just wondering whether I could make 33c (on top of inflation) to the dollar investing my money elsewhere before my HECS has to be repayed out of my income, or whether it would be in my best long term interest to pay it now. My savings account has grown from $1300 – $1700 since my last post but my first semester HECS is $1860~ due 31st of march (if I pay upfront – if I defer it becomes $2480 and starts inflating).
Whatchy’all think? Thanks in advance again for any input!
Let’s handball this one to STILL IN SCHOOL [
]REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Get rid of any debt you can before it accumulates! How long did it take to save your $1300 (now $1700)? Your $1860 will grow to $2480 immediately and continue to grow……However, Can you find a property that will generate the income to pay for your education? How much do you save per week now? You could find a property that gives a positive cashflow of “X” dollars. Out in the country areas there are still properties that are selling below $50k and returning up to $130 pw. You just have to set your mind to it and look. We have 3 settling in the next month or so. One is $55k with $120 rent, one at $38k with $120 rent, and a major reno for $40k with about $20k of work to return about $200 pw. One of these could pay for your eduaction. You have a good savings history already so use it to your advantage. The house at $38k above could be bought with a 5% deposit of $1900. It’s a one acre block suitable for subdivision in to 2 half acre blocks. The second block will sell at up to $20k, but even if you only got $10k for it, your education is paid for and you will still have the rental income!!!! which will be poitive anyway. Good Luck!
I think the best way to start is use other people equity to buy your first ip if you don’t have any deposit. Ohter people equity like your parent, uncle, aunty….or may be joint venture wher you find a property and the other party put down the deposit.
Good luck with your journey…
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]I understand I theoretically could make more money from PI but I have very little time to do this (15-20 hours average per week in my casual job, 48 hours contact/study time for uni, social life with girlfriend, sleep etc doesn’t leave much time to find a juicy house to invest in
I was just thinking a one time GUARANTEED, NO EFFORT REQUIRED return of 33% + inflation may be more suitable until I complete my education, start working full time, and have weekends/nights free.
Originally posted by Rezix:I was just thinking a one time GUARANTEED, NO EFFORT REQUIRED return of 33% + inflation may be more suitable until I complete my education, start working full time, and have weekends/nights free.
Where would you get a return like that especially Guaranteed..No effort required ( essentially no risk, high reward, high growth )..The *ding-ding-ding* noise is not the Bus..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Originally posted by redwing:Where would you get a return like that especially Guaranteed..No effort required ( essentially no risk, high reward, high growth )..The *ding-ding-ding* noise is not the Bus..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Yeah I think I best take this offer up while I can, HECS up-front it is! Thanks again for everyone’s input though, property can wait till I have time and a good credit rating [
]Rezix, reading through these posts again, I’ll admit I did think, pay your HECS, no, maybe you could get a house, and back to pay your HECS again.
Especially with your time constraints at present, you are probably better off paying the HECS upfront. Especially as if you leave the money in the bank – expenses will always ‘suddenly’ come up that will require that money. Enjoy life at Uni, and as soon as you do get time to look for property, start looking. You never know, we might be somewhere else in the cycle then, and there could be great buying options. Always look – doesn’t mean you have to buy, but you’ll be educating yourself on the numbers.
Cheers
Mel
) or just with an opinion to share.
]).
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
