Hi everyone, i’ve taken this directly from a reply to another post, as I thought I might be better off giving it some more visibility in here. Should still make sense
Wow, some really emotive stuff in here. Interesting to see how strongly some people feel about this. I guess this is a perfect opportunity for me to piggyback some questions that I cannot seem to answer, probably because I am part of Gen Y and haven’t had this same education that the Baby Boomers had. Anyway, to put my situation in context:1. I am 24, live in Bris, earning approx $65k (fairly good wage)
2. In my 3 years work since uni i’ve saved approx $40k
3. I get taxed ridiculous amounts each year and need to minimize.
4. My partner and I cracked and bought a $25k car on a a 8% loan a year ago, but we are keeping well ahead of minimum repayments and should have this paid off in a year.I went to see a financial planner 2 years ago, who gave me plenty of theory but nothing that i could use. Well, that is unless I bought into a managed fund through his bank [strum]
I have been reading reading reading for so long, but I just cannot decide what to do. I seem to start one thing after another but nothing ever seems like it will work. I am certain that if I buy a good investment property I will get over this hump, but my problem is, I can’t find a consistent definition of a good investment property.
Problem 1: How do I know which of the 1000s of Financial Planners in this city will be any good? I don’t just want good, I need the best, otherwise I will always be doubtful (and from earlier posts in this thread, rightfully so)
Problem 2: How do I get any consistency on a definition of a good property? +ve cashflow, high capital growth, mix of both, units, apartments, townhouses, proximity to cbd, historical growth, etc, have all been sold to me as indicators to consider when buying an investment, but all they do is confuse (and worry) me rather than give me confidence in making a decision. Everyone says, the most important thing is, do your research. Well I believe I have, but its not getting me anywhere.
Problem 3: How do I ensure that I don’t jeapordise my short term quality of life? I work very hard and want to buy my partner and I the best possible home, best possible wedding, best possible creature comforts. Otherwise I ask, what do I gain out of working? If I can’t see how my investing efforts are rapidly moving me to this goal or enabling me to continue obtaining these, I am not sure I can be sold on it..
I am sure that I just need to meet the right person or be told the right thing for all this to click. Unfortunately at this stage I watch time tick by and feel more and more paralyzed by my inability to just “get it”
I really hope someone on here can help!
There seems to be a common theme in a lot of the posts – how do I start?
The first step is always to plan – you can’t have a successful business without a plan – and it should be no different in the investment field.
A good financial planner should help to identify the client’s goals – the purchase of the first home – when is a good time to have children – how do you fund their education etc. – what steps to take to protect those significant people in your life.
As for quality of life – I would think that is dependant on the ability to budget – to allow you to pay yourself first, your commitments and still have something for the occasional doodads.
As for a definition of a good investment property – this is relative to your goals – and what you want to achieve by owning property. Growth was very important to us when we were younger – but as we are getting older – we are looking to ways to replace our salary so we also have cashflow so we can look forward to a self funded retirement.
May be it is time just to do it – make some mistakes – learn from the mistakes and move on.Hi
Getting started is hard and scary. Sometimes its just easier to do something than do nothing. Destiny Financial Services, a franchise group, owned by Margaret Lomas is very good. WE are dealing with them in Adelaide. http://www.destiny.net.au They do charge a set fee depending on what you want but set up a long term plan dependent on your current position and where you want to be in 5/10/15 years etc. Mostly property related and positive cash flow properties where possible.
At the end of the day, if you stay in a buy and hold scenario it is very difficult to loose.Problem 1: How do I know which of the 1000s of Financial Planners in this city will be any good?Look for someone that has experience in property and is also a financail planner such as Richard Taylor, known on this forum as “Qlds007”
As for “Problem 2 & 3” a lot of your concerns come down to needing a solid plan.
There is no Get-Rich-Pill you can take, but you will need a strong desire to succeed. To be successful in property you really do need a good system in place, so my advice would be to follow our 7 step process.
Step 1 Set your financial goals
Step 2 Prepare a budget
Step 3 Set an investment strategy
Step 4 Build your team
Step 5 Start researching
Step 6 Prepare a Feasibility study
Step 7 Negotiate the deal and repeat!As children we’re often raised to fear failure and as a result we never try anything new. You are going to make mistakes it’s inevitable. Take the opportunity to learn from them.
AmandaBS
http://www.propertydivas.com.au
FREE online Property Resources“It is better to be inconspicuously wealthy, than to be ostentatiously poor…”
Hi, talk about paralysis! I feel it comes from information overload.
I only found this forum after I ‘retired’ and Christmas 2005, my sister gave me a dire warning about my ‘over-exposure’ to the property market.
If I had taken the time to gather the info, I’m not sure that I’d have bought anything at all.
Not knowing anything and like a complete idiot, I just bought, and bought and bought.
And like a double idiot, I just sold and sold and sold.
However, to put some perspective on my situation, after the 1st house which was a bit of a disaster, my LVR was never more than 67%.
2 weeks ago, I saw 2 blocks of land @ $80000 each. With a 3BR 1 bathroom + carport for $100000 and $30000 for stuff like variations, services etc, a new house will cost around $200000, certainly no more than $220000 at most. It will rent for $230 -250 p.w.
You can work out the numbers for yourself. It is neutral gearing with little cash down, +ve cashflow with $30000 in an offset account. Every dollar paid into the offset account earns close to 8% tax sheltered.
If there’s a lower risk, higher return investment, I can’t find it anywhere else.
The highest yield I’ve ever achieved was in the forex markets but during Sept 11, I sat glued to my computer until 3 am!
A last note: from experience, any property that’s close to neutral gearing quickly delivers capital gain. The one I describe above has $50000 worth of equity from the start.
Good luck ,
Kum Yin
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