Hello group.
I am 22 years old. I graduated with an Arts Degree last year and this year I complete my Law degree. I have no HECS debt.
I am currently living at home, but wish to move out once my studies are done. I need a place to live, but renting is a waste of money. My plan is to acquire several properties and use the positive cash flow to fund my lifestyle. I still want to travel.
I have enough saved for a down payment. I have a perfect credit history. and I am elegable for the First Home Owners Grant (FHOG.)
What the best ways to take advantage of the FHOG with regards to acquiring properties for positive cash flow?
Hmmm, this may not interest you, but this is what I would do……
1. Stay at home until you really have to move out (boring I know).
2. Use your money saved for a deposit on an investment propery to make it positive cash flow and put your pos cash flow towards more pos inv properties!
3. When you are really ready to move out – buy a home that needs a little bit of renovating and put your FHOG towards fixing up the property and increase the value. Get some tenants/friends to share with you and help pay the mortgage!
4. Buy more properties with your equity!
By the time you are 30 you should be set financially (and probably addicted to investing)!!There are many other strategies you could use and I must admit I do not know the full regulations with using a FHOG as it wasnt around when I bought my first property, so someone else may be able to help with that.
Keep reading books and attending seminars and good luck…
TD
Originally posted by TracyD:By the time you are 30 you should be set financially (and probably addicted to investing)!!
I love that – Collecting Property is like a drug. It is very addictive, and Personally I have to confess I’m an addict!
Oh well there are worse things to be addicted to – Like Consumer items…
Using the FHOG on an I.P.? Heaven Forbid that would be against the rules! I doubt however, you would be the first to do it. I like the aforementioned idea of staying at home and only using the FHOG when you really need it though, all whilst travelling and building up a portfolio of I.P.s. The idea of then using your FHOG to RENOVATE and build more equity in your portfolio to be used for more property acquisitions is another stroke of genius. A sound concept. Overall though it does depend heavily on your strategy, where you wish your property to take you, and how you plan on hitting the end zone?
Everyone has a different goal, or strategy, and this is why everyone looks for different things when purchasing I.P.s.Have you spoken to a Financial Advisor? This may be the best option to at least assist with mapping out for you where you wish to go and how to use property as the vehicle to take you there…
And Remember all my comments above are of a general nature and as I don’t know your personal situation I cannot give personal advice. Consult a professional advisor for that…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055Thanks Stuart for backing me up and clarifying the use of FHOG on IPs.
But to Avenged – a word of caution on approaching a financial adviser…..approach CAREFULLY. This may be a gross generalisation, but they will probably talk you into investing in managed funds and trust (which they receive a healthy commision for).
My general rule is that if you are going to pay for advise from a professional then make sure they have already achieved what YOU are wanting to learn (lead by example) this applies to non paid advise also!!!!!! SO ask the questions if they already own investment properties, how many, how long have they been investing..etc and dont take advise from anyone that hasnt!!TD
Thanks for the replies.
I did some research into the FHOG. It stipulates that the applicant must NOT have “owned a home prior to 1 July 2000.” The grant defines the term “home” as either a “new or established house, home unit, flat or other type of self contained fixed dwelling that lawfully can be used as a place of residence.”
TD, Your 4 step plan sounds good and is what I had in mind. But, my only concern is that investment properties I can purchase with my saving cannot be reidential. If I stay at home and use my savings I would need to invest in commerical property or peoperty that is not used for residence (and I suspect that these properties attract a large price tag.)
However, If I purchase a residential property / “place of residence,” then I am elegabile for the FHOG. I have too live there for 12 months which completly messes with the plan. I need to pay the morgagaue (out of my own pocket) and by law I cannot rent it. I suspect the grant was designed in a way to stop people for using it for investments. This is fine, but I either have to choose to take the money or or leave it.
What are some ways to solve this? Purchase only non residential property?
Here are the options in my mind…
1) Stay at home, use savings and purchase non-residential I.Ps, rent and channel positive cash flow into further IPs. use FHOG to renevate house to live in
2) Use savings + FHOG and purchase residential property. Move out of home (on paper or physically) Pay loan for 12 months, then rent and channel positive cash flow into further IPs.
Stuart, thanks for addressing the FHOG directly. I am sure there are ways around using FHOWG for an residential investment.
“I like the aforementioned idea of staying at home and only using the FHOG when you really need it though, all whilst travelling and building up a portfolio of I.P.s.” This sums up my vison. I am young and have a huge list of things to acomplish. – I dont want to be tied down to a 9-5 job and mortagage. I know there are ways to acomplish this, just gotta find out how.
Not sure why you cant use your savings to buy a residential IP? Who told you this?
Maybe Stuart can answer this being the mortgage man…TD
Originally posted by TracyD:Not sure why you cant use your savings to buy a residential IP? Who told you this?
Maybe Stuart can answer this being the mortgage man…TD
I can buy a residential property, but with the FHOG I have to be “living” there for the first year. In other words, the Government designed it that way so people wouldnt use the FHOG as an investment.
Yet, I suspect there are way to live in the property “on paper” but rent it out anyway.
Unreal…..your going to complete your law degree this year at the age of 22….(a course that normal takes 6 years at uni)….you must be a boy genius.
it surprises me that me that your on this forum looking for advice from a few dreamers and mortgage brokers.
How about looking outside the square….
Have you thought of starting your own Law practice……
maybe at first a small practise, charging about $250/hr….that makes about $2,000 a day….$10k a week….$500k a year.Makes property investment look like petty cash
Then image what could happen if you expanded you practice……..
image all the properties you could buy then…..
maybe you could even specialize in property law…..
Avenged, leave the FHOG to people who really need it…you’ll make a fortune just being a lawyer…
hb
hb
I hope you are referring to yourself when you say this forum is full of ‘dreamers’ and ‘mortgage brokers’
other people contributing on this forum may take offence…TD
Originally posted by hb:Unreal…..your going to complete your law degree this year at the age of 22….(a course that normal takes 6 years at uni)….you must be a boy genius.
it surprises me that me that your on this forum looking for advice from a few dreamers and mortgage brokers.
How about looking outside the square….
Have you thought of starting your own Law practice……
maybe at first a small practise, charging about $250/hr….that makes about $2,000 a day….$10k a week….$500k a year.Makes property investment look like petty cash
Then image what could happen if you expanded you practice……..
image all the properties you could buy then…..
maybe you could even specialize in property law…..
Avenged, leave the FHOG to people who really need it…you’ll make a fortune just being a lawyer…
hb
Im not smart at all, just work my arse off. Its 5.5 years for a double degree. I’ll do it in 5 because I overloaded every year. Im a hustler
Gotta get things done.I came here because I have no real Idea about investment strategies. Sure I have the ground in the legal aspects, but that has no correlation to wealth building.
Starting my own practise is minimum of 3 years away. Once graduated I have to be under supervision for 2 years. In those 2 years wI will be earning $20 hour max. Ive done the research. Gooigle “grad survey.” Your “law practice” idea does not take into account of taxation or overheads, let alone establishing a repuatition that will keep work for clients hour after hour. Anyway, its something for me to think about.
FHOG is free money. You cant get anything like that, bar the Govt superannuation scheme. Ill will be taking advantage of it.
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