Hello,
I’m a 24 year-old self employed call out computer technician (and have been for the last 3.5 years) and I currently live with my parents and I don’t have a commercial office.
I’m heavily interested in buying a cash-flow positive property for an investment but worry that I will forfit my first home owners and REBA grant if the property is residential.
The LVR ( I hear about 30% deposit needed) on commercial property is going to make it difficult as I currently only have about 3g saved up. I’m able to save about $300 a month by being an extreme tight ass.
If i buy something I have a chance of affording (with the help of the first home owners and REBA grant) its going to be out in the sticks and most of my customers are in the Perth metro area. Therefore travel (during th first 12 months when I have to live there) is going to be a big time/cost issue.
I’ve applied for heaps of jobs and I get the interviews with my qualifications/experience but they don’t give me the job. I had about 9 interviews this year; its very embarassing. I also feel that I have lost a lot of income from the time I spent (invested/wasted?) trying to find a job.
What would you do in my shoes?
Would you go for the grants or just forget them?
More information about the First Home Owner grant is available at http://www.fhog.info.
REBA is only applicable in WA.
Being self-employed will cause you some difficulty getting finance unless you have 20% or more deposit. You will need 2 years full financials showing sufficient income to service the level of debt you will be applying for.
You cannot apply for the FHOG and use rental income to service a debt on an application as it is assumed you will live in the property and have no rental income.
By the way, you only have to live in the property for 6 months starting in the first 12 months. That means you can move in on day 1 or day 365 as long as you stay there for 6 consecutive months.
No-one can tell you how long the FHOG will be available but in your situation, it looks like you will need rental income to help with servicing. I would be looking towards investment properties first.
Alternatively, if your parents could help with equity in their home, it would offer a lot more options and make things a lot easier.
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteTMA,
I will likely just get a low-doc loan so its getting the deposit together which is going to be my task. Perhaps I should consider a regular geared savings plan (http://www.anz.com/aus/fin/investing/gearedFact.asp) then later a margin loan on a property trust?
I believe I can also join the army reserve and get 2g for 45 days training. This is much better than my current rate of saving.
I wouldn’t ask my parents to put up their house/land as equity but they told me that if it gets rezoned R40 they will sell it and buy my brother and I a place. I won’t wait around until that happens though.
I’m thinking that I should perhaps forget about REBA (as it requires 12 months) but go for the first home owners as it only requires 6.
If I somehow manage to get an office in the Perth metro area I can work from there then live in the property for that 6 month period.
I think you need to walk before you can run. Do a lot more reading and research. Why do you need an office if your business is mobile?
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteTMA,
I’ll do more reading and research but I prefer to get more practical experience than purely academic.
Mind you I jumped into self-employment without working out how much I needed to charge and things like that so ending working long and hard for low income.
Office or home based I need a “base” where I can do various things (both technical and admin) that is not far from customers.
I have a 1300 number so I can move that as I please.
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