hey all,
if i was to get my folks to help me with my first property… say borrow 15 – 20k. how should i approach them with it? i.e 20% of the CG after tax or something?
also – what would i expect rent to be in a clsoe to CBD area like ivanhoe? for a 2 bedroom place (me living in 1 bedroom and renting the other one out)?
Would appreciate any advice.
Cheers
Joel
Hi Joel,
Are you thinking of having them as partners or as lenders? Would they be happy to lend you the money or will they want a decent return from their investment? Also in which state is Ivanhoe? Do a quick check on realestate.com for rents in that area.
C2
ahh looked it up on realestate so simple!
I just feel i should offer them soemthing i mean they are retiring in about 3 years and need everything they can get. otherwise the money they give me woudl be earning interest elsewhere… partners or lenders… id say minor partners? hmm.
i could survive doing it on my own but id only JUST survive…. then when my gf finished uni ill buy a hosue with her and keep the apartment. im stoked i just got the buyer beware pack giong to give it a read 2night and check out this apartment on saturday. ill be annoyed if there are lots of buyers!
thanks for your reply c2
Dont mean to offend but you sound like you are living in dream land-you havent been able to save up enough money for a depost so you are going to have to borrow from your parents, you arnt earning enough to pay for the mortgage so have to rent out the spare room yet you think in a couple of years you are going to have so much money that not only will you be able to afford this appartment but somehow you will have saved up enough money for ANOTHER deposit on a house, pay its mortgage AND still keep the apartment?? Ahh to be young and niave again….
Alternative to asking them is take out a 100% + loan and do it yourself.
Richard Taylor | Australia's leading private lender
blogs wrote:Dont mean to offend but you sound like you are living in dream land-you havent been able to save up enough money for a depost so you are going to have to borrow from your parents, you arnt earning enough to pay for the mortgage so have to rent out the spare room yet you think in a couple of years you are going to have so much money that not only will you be able to afford this appartment but somehow you will have saved up enough money for ANOTHER deposit on a house, pay its mortgage AND still keep the apartment?? Ahh to be young and niave again….hey blogs – none taken. i am getting a 100% loan. and its all approved with essential advice from my financial advisor!
If you reread what i have written above…I never said i could not afford the repayments on my own. i said i would just survive – which is fine as im keen to get started. i am on a really good wage upon finishing university (at least 10k above all my mates who got first jobs)I am also running on the assumption that in 3 + years i get at least some equity in the first apartment and that i get a pay rise at the end of this year which is gaurenteed (the pay rise). unless i totally stuff up at work of course…which wont happen.whilst im young yes, i am not niave.
dj_siek wrote:[
hey blogs – none taken. i am getting a 100% loan. and its all approved with essential advice from my financial advisor!
If you reread what i have written above…I never said i could not afford the repayments on my own. i said i would just survive – which is fine as im keen to get started. i am on a really good wage upon finishing university (at least 10k above all my mates who got first jobs)I am also running on the assumption that in 3 + years i get at least some equity in the first apartment and that i get a pay rise at the end of this year which is gaurenteed (the pay rise). unless i totally stuff up at work of course…which wont happen.whilst im young yes, i am not niave.
o.k mate lets crunch some numbers-Im guessing your loan is probably around $300-$350k at least? Repayments would be around $550 a week, you are (in your words) struggling to meet these repayments as you are. These repayments would be mostly interest, after 3 years you will probably have paid off around $15k of the residual. As far as payrises, even if you get a $10k pay rise the mooloah in your pocket that will be available to put int he loan would probably be only $7000. So im guessing you are living at home with the folks at the mo? Just also take into account other expenses such as utilities, insurance etc. So after 3 years if you have managed to somehow scrape together $40k for a deposit you will have done extremely well, not saying it is impossible, but will be very hard..
nah the loan wil be 250k. repayments at around 1450 a month.
I have also taking into account utilities etc
what do u think?
Well that sounds a lot better-you think you will be able to find a 2 bedder in Ivanhoe for $250k though? Actually your potential property price will be less than $250k after you factor in fees/stamp duty etc seeing you are borrowing the full amount?
Hi Joel,
Your plan is good aslong as the numbers stack up. Make sure you factoring in rate rises or if property values goes down. Has your advisor pointed you in the right directions towards trusts etc. If your GF is also part of the big plan then 2 wages will make it easier but make sure you both have the same goals. Are you both prepared to get financial freedom through properties whilst going without some of the luxuries of life.
Blogs,
Would his numbers look better if he has an IO loan and his GF is also part of the big picture. Just because he is borrowing from his parents doesn't necessarily make him young and naive. I remember borrowing 2K from my father a few years back to pick up a property worth 72K because I was short of cash. Still got that property today and its worth over 300K. Maybe he was living in dream land before but has now seen the light and is making changes towards his future.C2
C2 wrote:Blogs,
Would his numbers look better if he has an IO loan and his GF is also part of the big picture. Just because he is borrowing from his parents doesn't necessarily make him young and naive. I remember borrowing 2K from my father a few years back to pick up a property worth 72K because I was short of cash. Still got that property today and its worth over 300K. Maybe he was living in dream land before but has now seen the light and is making changes towards his future.C2
No not at all-what I was aluding to (rather abruptly albeit) was that many young people these days have the idea that property prices will just keep going up and up. They also seem to lack the foresight to tack into account interest rate rises, increase in cost of living etc. So on the face of it I was trying to point out that he may be overly optermistic in thinking in three years he would be in a position to but another house aswell as keep the one he is looking at buying. And its great that you (like every tom, dick and harry) have had sucess in property over the last ten years, the next ten however are going to be a completely different story…
Hi Blogs,
Sometimes it good to be abrupt and point out negatives aslong as you also provide constructive critism and positive suggestions
I Totally agree with you about many young and not so young people have the idea property prices will just keep going up and up.
Thus the reason I mentioned to Joel about interest rates going up and property values going down.BTW that 2K was borowed back in 86 when IR started to sky rocket upwards and the government capped loans at 13.5% and just before house prices slumped a few years later 89-90.
Most of my friends were advising me not to buy but I took the attitude it's now or never.
2K became 72K which became 150K which became 300K and then 900K and now stands around 1,600K worth of properties from that inititial 2K short fall.
I've been lucky to have been able to ride out the ups and downs of interest rates and property prices and haven't been like every Tom Dick and Harry making money only over the last 10 years. The hardest part of all of it was going back to uni as a mature age student and working 3 PT jobs to keep it all together.C2
hey ,
my gf has nothign to do with it at the moment really. if we're still together later on then we'll do something for sure. (im hoping we will be of course!)
i understand blogs point however.
cheers
Joel
You must be logged in to reply to this topic. If you don't have an account, you can register here.
