hi all!
i want to thank steve for such a great book first of all and i was pumped up after i read it!but what now?!!
im in syney now and i live with my mum and i want to do so until im about 23 or so, so i have another 5 years to start investing before i buy my own house but i cant seem to find any pos cashflow proerty around sydney…
i want to look for something that is between 50-100k anywhere up to a 7 hour radiu drive from sydney but it seems like the only places are in broken hill or some place i have never heard of.
my questions today are…
1. should i aim to look for property between 50-100 or should i stretch it a little?
2. should i maybe look for property in another state
3. do you think it is wise to invest in a pos cashflow property that only produces $10-20 extra or should we aim higher
and
4. i can get a loan for 200 000, should i aim for more property in a cheaper suburb or a more expensive one and wait for capital gain?and finally i am actually going to invest with 2 other partners we three can get the first homeowners grant… does that mean we can get 21k all together from that grant or can only one person get it! and is it true you must live in the property for 1 year before you can rent it out if your taking the grant!!?!?!
they seem like stupid questions but im actually a bit puzzled so if anyone could help me then i would be most grateful!
thank you
-aumeow
Hi aumeow
I am new at all this too and being in Sydney makes it hard to answer most of your questions (I am in Qld) but there are some people with a great knowledge base on this forum so give it a chance and see what they say.
I can tell you that First Home owners grant is only for owner occupied and you can only get it once per property ie if you all buy the same house you will only get $7000 in total. That also assumes that none of the others have ever received it. Obviously this also means if you bought three properties in each individual name (ie one each)then each of you may qualify for the grant for each property.
Yes you do have to live in it for a year but I believe individual states may vary slightly. My nephew got the grant last January but had a job transfer last month. He checked and was told that it was okay.
Check this with the Office of Stete Revenue in NSW
Good Hunting
m
The period is six months that you need to reside in the house. This must start within the first 12 months of ownership.
Be careful purchasing together – there are a few issues to consider:
1. If you take the FHOG then all three will be deemed to have owned a home and the other two will never get the FHOG.
2. If you share the mortgage three ways then your assets will be a third of the home and your income will be of a third of the rent. The liability will be the whole loan as you are each jointly responsible for the entire loan. This can make subsequent borrowing difficult.
3. Many people will describe the problems that might be encountered with entering into a partnership where you may have different goals and your lives will take different paths. You need to consider exactly what you all want from the investment plus a clearly agreed on exit strategy.
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
3 year fixed – 6.57%Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I too would be wary of entering into a partnership. Do it on your own if you can.
You should probably plan your strategy for a while before you sstart. maybe start somewhere near home. buy a house, live in it, get the FHOG, and then move out. If you live in it first, ylu can still claim it as your main residence and it will be CGT exempt for up to 6 years after moving out – it you ever sell.
I personally would not buy anything outback, in small towns, unless there was strong prospects of capital growth. $10-$20 pw is nothing if there is not growth.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thanks for all your help..
i think the main reason i want to go into a partnership is because it sounds easier and we both have different skills..but i still have to look into it coz i can see how it can be a problem..with the FHOG , mortgagehunter, you said you must live in it for the first 6 monnths,
so my understanding is you can leave it for months and get 7000…. and the next 6 months get rent money…coz there not really going to CHECK if your living IN it are they, they just dont want you to rent it out….
but what this means is you can also rent it out PRIVATLY rite?
so in other words… you’ll be getting 1 year rent, + 7000 grant…..
is this legal.. or more importantly… is it possible?
-aumeow
Hi aumeow
No it’s not “legal” and yes they MAY check. Obviously there are a lot of problems for you if they do check. If u r living there and some people pay you board, that is a different scenario and you should be fine. I say again though, check with State Revenue.
The other thing is if you don’t claim FHOG and it is an investment property, (and if they don’t change the grant guidelines), you can still get it when you do buy your first home and live in it. Just depends if the scheme keeps going.
happy hunting
m
Hi aumeow,
I’m just starting in Sydney.
Very difficult to find cashflow positive in Sydney. My current place was 165k (studio apartment) and currently renting for 185/week. This is good for Sydney market, although obviously it’s quite cash negative.
I did some digging and discovered a studio apartment for 90k in Auburn, similar units rent for 130 per week. Still short of the 11 second rule but may end up OK. I didn’t visit it or anything.
If you were pumped after reading Steve’s book, might I also suggest Wealth Magic by Peter Spann. His techniques are largely different, and his book covers more general aspects of wealth whereas Steve’s book is very specific. If only because it’s always good to hear a wide range of opinions.
I wouldn’t invest with others; firstly because I don’t want to be responsible to the others in the group, I don’t want to be confined by their risk adverseness or their foolhardiness. Furthermore I don’t want to sign over my investment to others, especially not professionals. People are really good at spending other people’s money!
I’d definitely encourage “networking” with other people interested in invesetment and stuff to hear different ideas and gain encouragement, however.
Good luck!
good luck and happy hunting ai!! cheers for that but so far i got no luck…
the best i have found is in casion… around 85k and rent out at 150…can anyone show me something nice around sydney…. within 3 hours from sydney coz i really want to get motivated…(well at least know that it is possible to find a deal)
andy you said you find one in auburn for 90K??
thats CHEAP !!!
-aumeow
Originally posted by aumeow:can anyone show me something nice around sydney…. within 3 hours from sydney coz i really want to get motivated…(well at least know that it is possible to find a deal)
andy you said you find one in auburn for 90K??
thats CHEAP !!!
-aumeow
Yeah, you just need to do your homework! Like I said, I haven’t seen the place so it could be a complete hole, but I just did a search on Domain (www.domain.com.au) for places in Sydney under 150k (I think that’s what I did). Anyway, the list price has gone down to 85k now…
http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2004625431
Web searching is probably a good place to start because it’s very time efficient, but I expect that there are more avenues that will get better deals that don’t make it to the web sites. I don’t know what these are though…
Good luck, it’s all about research!
Tony, it seems to me you have no focus. [blink] I did a search on your previous posts and every one had a different tangent, thrust, idea, goal. Obviously you are keen but I can tell you from one who has lacked focus for years, that you need to FIND FOCUS. Okay, you want to invest in property, great. But one minute you’re at home with your mum and planning to stay there another 3 years, next minute it’s a coffee shop partnership, next minute you’re planning a shift to Melbourne, another moment it’s help with a vacate notice…you don’t sound very focused to me.
My thoughts would be to encourage you to “settle, petal”…and read, read, read. Sit down with a calculator and work out a budget…and stick to it. Get out of your current financial problems before you start planning to spend borrowed money.
Yes property can be very good financially, but what are you going to do when a pipe in an IP bursts, or a tenant doesn’t pay rent…you will need “sleep money” as Jan Somers calls it, money put aside to cover those unforeseen problems that do, eventually, crop up! If you can’t manage your own life you certainly won’t be able to manage a property portfolio.
So settle down, you’re miles in front of lots of people simply because you’re young…plenty of time to learn, and get the basics under control. Don’t go racing into investment without the basics secure and strong.
If you’re anything like I was at 20, you will ignore this post and keep charging away with various ideas but getting nowhere, and not bothering to budget. It took me years to smarten up. It’s an ongoing process![biggrin]
Redhaven.
with the FHOG , mortgagehunter, you said you must live in it for the first 6 monnths,
NO
I said you must live in it for 6 months starting sometime within the first 12 months.
This seems a hard concept to grasp…….maybe I explain it poorly?
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Actually you can still access FHOG if you buy an investment property. Look on the ATO website the rules have changed, as long as you do not live in the property you can access the grant when you go to buy your new home. Alas you do miss out on the stamp duty concesions though……………
Mu hubby and I put off buying property for years because we hadn’t bought our own home yet, still haven’t, but decided to bite the bullet and start investing as we pay minimal rent and are happy with where we are renting. After doing research discovered that we will still be eligible for FHOG after all!!! This rule changed in 2004 I think.
Have fun allcollie
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