HeyI have read plenty of books on property investing and enjoyed all learnt.
Unfortunately, I find myself today on a disability pension…..which means no money. I will be unable to work for quite some time but know that I would be able to get into this game now……if it were possible.
I have found ways but they seem too risky for a beginner. Does anybody here know of a way I can get started with a property in my circumstances? Any books that would be useful?
I would be forever greatful for any advice….
Nothings Impossible
I would focus my attention on ways of generating income before looking to buy property while on a disability pension. There are numerous opportunities to make money through the interent for example. You would definately need to at least secure a deposit of 20% plus any fees unless you are entitle to the first home owner benefits and you are going to live in the property for 6 months.
It is very important to be able to service any debt on a property you buy with other than rental income for some time as tenants are not a certainty and you may find yourself in trouble very quickly if the property sits vacant.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
Thankyou for your reply…
I am eligable for the FHO grant and can live in that property for 6 months….get renters in to cover repayments, carry out simple, inexpensive cosmetic home improvements and so on. Unfortunately then I am not able to access the tax benefits!
I live in Perth and it is never a problem to get renters in………still, no bank would give me a loan. I could buy a property under what it is valued at, have a long settlement with access to increase property value and so on. Still, I don’t think it would work.
Hmmmm………[glum2]
Nothings Impossible
Hi,
Like your nick says: nothings impossible. The first step always (not only being the hardest) should be for a plan.Write it down (actually do it, I mean actually actually do it).
Base your plan on:
You budget (write one down).
Once you know how much you have you can figure out how much you need and what the gap is. Then plan to fill that gap. I’m assuming your disability pension is due to physical injury, not mental. It’s your brain that earns you your money, not your body (what do you think controls your body?)
Plan out what you are going to do to fill the gaps you have identified.
eg: you need 20% deposit. You are looking at a 2 bedroom place you would need at least say $200,000 * 20% = $40,000 – FHOG = $33,000 + legals
You can then figure out how long you want to spend saving eg: 24 months so you’d need $1,375 / month. You did your budget so you know how much you can save each month and now you know how much you need to save. Every dollar counts so start looking for savings you can make plus money you can earn.
If it’s going to be years before you are physically able to go back to your old job, why not start skilling up on some other job that you can do.Just sliding on by in life is fairly easy and can be done with just enough effort. If you want to make enough money to be independant you need to work for it. That work includes learning more, planning more, talking more, asking more questions and looking at things in every direction. That’s why its hard to be rich, not because not everyone can do it, but not everyone is willing to put in the effort. Heck, I know I need to put more effort into what I do to reach the goals I want, but every day I try harder.
If nothing else, you can plan out an investment strategy, write up all the budget, research all the deals, negotiate bargains and put it all down in a big business plan and look for investors. People pay for others to do that sort of work.
Surrey.
I don’t think there is any point to obtaining tax deductions on a pension as there is no tax to deduct.
Regarding planning this strategy out, I don’t know of any lenders who will lend money to someone without an income (other than just a pension) so I don’t see the point if your plan does not include obtaining income from working or starting your own business.
You will need a high deposit for a no doc loan so the lender will see your bank statements so it is assumed you cannot hide the fact you receive the pension as the deposits will be seen.
However, I have heard of various Government schemes besides the FHOG that help people in your situation. I will try and find some information for you.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
I think this link will be of great assistance to you. I was very impressed:
http://www.housing.wa.gov.au/key/access.htm
Please let us know how you get on.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
Hey Nothings Impossible,
Good on you for thinking so positive when you’re in such a difficult life situation.
Do you know anyone who might be interested in partnering up with you? If they have an income that will gain the bank’s thumbs up, and you do all the hard yards of finding a property, you have a perfect match. (However, this will make you ineligable for the FHOG if you purchase as an investment… unless your partner is okay with you both living in it for a time while it gains equity).
The other option is to look for the cheapest housing in Australia that might be more affordable for you (whereby you can put down a large deposit, reducing the risk to the banks). For example, you can buy a $30,000 house in Broken Hill. Rental returns are meant to be quite good, so it should even be cf+…
Though this is a bit of a drag if you want to use FHOG and you have to relocate there… and capital growth is likely to be crap as it has a declining population.
It is an option, however, that might help you get one foot in the door. My advice would be to look for a partner and/or look for inexpensive cf+ housing (most likely in rural areas).
And of course, if you are able to gain a new income stream (rather than the disability pension) in any way possible, this would seriously help your situation (without knowing anything of your disability it’s a bit hard to make appropriate suggestions in this regard).
Oh – third option is if you have a parent/friend who is willing to go guarentor on your loan. If you can prove to them that you are capable of servicing the debt (including if interest rates rise, etc), and they are in a financially stable position then the bank will base the loan on their income/equity rather than yours. (Do be aware that this is a big ask of someone, as they are risking their home/money to your benefit).
Thankyou to all offering their advice.
I have had my own business in the past and intend on starting another, much simpler one in just a couple of months. It will take me off the pension completely. Was told that I could not work but this is hardly work. Interesting what you can think up even in the hardest circumstances if you really want something!
So, I will get there eventually. For now I will continue my education and keep reading all the posts here. I can only become better prepared.
Nothings Impossible
I hope you followed the link I provided. You don’t seem content with what you saw. I was very impressed with it.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
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