hi guys,
Im 21 years old, and am looking for a property for an investment, with tenants preferably. i have about 10k saved in my bank account, because i have been spending money like crazy since i started earning it! i have just recieved a pay rise and i currently earn about 65 k p.a, and i would like to know where do i go from here? how much do u guys think i can borrow? do i wait till ive saved some more money? which area do i but in? apartment? house or townhouse/unit?
Hey there,
The questions you are asking are the $64,000 questions asked by all start-out investors.In regards to them, I personally recommend:
1) Reign in your spending – for someone your age, you are earning fairly good money, so don’t let it “burn a hole in your pocket”. If you are going to buy your first property, you are going to have to get used to making regular payments, so I suggest you set up a savings account and have a set amount direct debited into this every week/fortnight/month. If you’ve already done this, increase the amount you are paying into it. Look at it as “training” for the main event. It is worthwhile saving as much as you can before purchasing as it is less you will have to borrow and pay interest on.
2) See a mortgage broker – many brokers provide free consultation and will save you visiting all the banks themselves. If they get you a loan they earn money from commission from the bank and can often secure you a better deal than the banks will offer themselves. They’ll also give you an indication of how much you can borrow. There are some very helpful ones who contribute to this site.
3) Research properties in your local area to begin with – buying property in an area in which you are not familiar with can be much more dangerous when you are just starting out. Read the local real estate guides, speak to agents, speak to council reps in regard to local conditions, zoning etc. (I know an area in NSW that has a major salinity problem that has caught out many investors, where salt has risen from the soil and physically “eaten” the mortar between the bricks. It is a local problem that could easily have been avoided by these “investors” if they had simply spent 10 minutes with a council representative.)
4) Go for it!!!
From another 21 year old.
Age doesn’t negate effort – you can never be too young or too old.
Read books. Thats what I have been doing since I got interested in property investing(in august 06) and I have read 7 books and half way through my 8th. Crazy stuff!!..
Reading lots of books will help tones, so much info just came to me by jsut reading. I suggest you read rich dad poor dad. Its the ultimate starting book for any property investor to be. I love it and have read the sequel and am reading the 400page se-sequel.
Good Luck.Christopher.
I have no job at the moment but I recently visited my bank’s loan manager and asked how much I would need to earn from a future job to be able to borrow $300,000 . The loan manager worked it out for me and gave me a printout. As Steve’s masterclass DVD suggests ask the bank while you do not need it and also keep in mind that the bank makes its money from lending out money.
If you’re going to read a book that will give you a very simple, yet effective explanation of the basics of wealth creation, you can’t go past “The Richest Man In Babylon” by George S. Clason.
The Rich Dad, Poor Dad series is excellent, but I would personally recommend The Richest Man In Babylon as a starting point. It will give you the initial motivation to stop spending money as fast as you earn it.
Age doesn’t negate effort – you can never be too young or too old.
Thanx 4 the help guys! ive been really good with my savings lately since i realised i need to stop spending money on cars, and start investing to make more money to afford better cars later! haha.
What do u guys think of fully furnished homes? does anyone have experiance i that? is it a money maker?
Originally posted by Spanky:If you’re going to read a book that will give you a very simple, yet effective explanation of the basics of wealth creation, you can’t go past “The Richest Man In Babylon” by George S. Clason.
I agree. The best investment you can make is $14 at your local bookshop and buy this classic.
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[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.
If your in a relationship I recommend Linda Gough’s Couples Guide To Money. It is great for couples in organising finances and discussing them so you can stop those dam financial related arguments, and instead you can argue about which property you are going to buy this week, and then the next, and so on.
Christopher.
Hi Ivan,
Check out my website and look at the information on my reports page. This will give you a good grounding in market research and property cycles. You should be able to find some other information there that will help you. [biggrin]
Regards
Todd Burns
http://www.freepropertyhelp.com.auhey Ivan,
I’m in a similar circumstance (early 20s and same income) and have just signed contracts on 2 properties. Everyone’s strategy is different, but what I’ve done is bought 2 cheap 3 bedroom properties,1 was $110,000 and 1 was $102,000.
Both have good rentals ($150p/week each) and tennanted till mid next year.
Both properties have potential to do minor improvements to them and add plenty of equity.
To get into one of these cost me about $10,000 (deposit+fees/charges).
I’m going to spend about $5,000 on each and then extract the equity and go buy another one or 2 hopefully.
Good Luck Ivan,
Joshua
Investor Finance
[email protected]Hi, Ivan
Definitely start reading investment books and magazines. The first step to investment starts with changing the way you look at money, assets and liabilities.
With your current income, you should not have a problem with saving $20k of your after -tax income (With a downscale in your lifestyle).
Since you are only 21 years old, you can more than afford to take a few months to a year (before plugging in) to learn about property investing and other forms of invesments. There are many other vehicles to building your wealth.
All the best.
Regards
Daniel [specs]Daniels right.
a few months of solid educating yourself and saving could save yourself from making some crucial mistakes and could save you a lot of money and headaches.
Josh
Investor Finance
[email protected]
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