Hi guys,
I'm fairly new to property investing. I'm currently living at my parents house, earning a decent wage and have a fair bit of savings. I plan to move out next year. I live in Adelaide, and want to eventually live within 10 km of the city. Would it be beneficial to buy a place now say 3 bedroom small sized yard etc rent it out for a year then move in? If anyone is from Adelaide, im looking at the good part of Seaton area. Any thoughts?
I am not eligible for the new home owners grant. I would be looking to spend around $300 to $350k. I would anticipate rent to be about $300 – $330 a week based on current rents in the area. I understand the rent will not cover the loan repayments, but am hoping the capital growth will help with this as welkl as the other landlord expenses.
Any advice would be greatly appreciated
Hi Shanshan. Sounds like a plan. There are quite a few on this forum that will be able to give you the guff on Adelaide, but if you can get into the market now, and have rent cover a good chunk of your payments, that is what it is all about. Adelaide does not sound like it is going backwards, in fact long term many feel it is great buying. As for the time to buy, you may have heard the phrase ' The best time to buy is now and 10 years ago……' Gives you something to think about. Don't rush into it, but don't over analyze either. Hey, all the best with your property.
Thanks a lot for your advice. I was a bit over confident in my rent estimate. I think it is more like $275 a week for a property priced in the low 300's.
Anyone in Adelaide who can shed some light on the current market?
Thanks again
Hi Shanshan,
I'm from Sydney so I don't know the market in Adelaide. Itis generally a good idea to just get in the market asap, however, there is a property cycle which occurs usually every 7 to 10 years and sometimes it is better to wait. For example, I bought a house about 2.5 years ago and it hasn't gone anywhere at all, so if I had been aware enough to know the market was flattening out, I would have been better off to just keep saving…..which is exactly what I have done in the meantime (as well as keeping the property) and I am looking at buying again at the end of this year, because the market will have been flat for quite sometime and I expect should start to warm up again so it's a good time to get in. So, try and read up on the market there and find out what stage it is in the cycle, if it's flat or in decline, just keep saving, but if it's hit the bottom and starting to warm up, definitely get in as soon as possible.
As far as your research for prices of property and the rents you can expect, realestate.com can be very useful, just jump into the 'for sale' section to get a good idea of property prices etc (the agent will often mention what rents they would likely achive), but then jump into the 'for rent' section and have a good look through as if you were looking for your own place to rent, and you will soon get a very good idea of whats an appropriate amount of rent for any given property in a suburb.
Good luck with you venture. One more thing I would suggest is reading Rich Dad Poor Dad and not actually moving into your property in a few years time, but rather keeping it an investment property and just renting your own place whereever you want to live. This gives you much greater tax benefits and heaps of flexibility to chose where you want to live in the short term i.e. you can move every 6 months depending upon your life circumstances, like closer to work for example, or even a cheaper place (i.e. if it's just you, perhaps you could live in a cool one bedroom or two bedroom unit closer to the city – do you really need three bedroomms for yourself). If you do your sums, you will see that this is financially much smarter than moving into your own house, it's what I do.
Hope this helps!
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