Hey guys,
Just found your forum – And I've been pretty impressed so far, I have basic knowledge of the concepts and ideas that have been put forward, but it's a bit of information overload for me, as I'm only just starting out in this field.
Just to give you a bit of background, I'm a 21 year old guy from Sydney, and have been passively interested in property investing for some time now – But have previously lacked the knowledge and motivation to do so.
So, I thought I'd come to the people who seem to know a bit about what they're talking about, and see if I could get some hints, tips, ideas, suggestions, tools, and whatever else you guys had or used to start you off.
I'm more than happy to share with you whatever I know, but it won't be much, yet!
Thanks in advance, everyone.
-Victor
Hey Victor,
I'll be quick.
1. Set a goal (e.g. "This year i want to buy an investment property. I can spend up to X dollars. I want X dollars rent. By earning x dollars rental income I will still live well and not cut off myself from the world and work overtime everyday".)
2. Gather the information you need to get to your goal (maybe read a few books, ask a 1000 questions, etc)
Thats the best way to start – don't worry about all the little details now…..you learn by doing.
I agree with M_K…
I am new to property investment as well.
Goal setting is the key to any success at all.
Hints on goal setting…
1. write it down and read it regularly. write it in the present tense and make sure you use positive language.
2. you have to feel it, be happy when you read your goal and don't allow scepticism from family and friends stop you in the most important part… BELIEVE IT.
3. be active in pursuing your goal. if you get an idea act on it immediately in some way even if it is small.hope this has helped
Duncan
First thing after starting to aquire knowledge (which is a never-ending quest) is to get the finances in order.
Start to adopt the mindset of a business owner; run budgets for your personal finances, keep records of expenditure.
Banks like to see clients who are in control of their money, have good savings history.
Establish what your likely borrowing capacity might be, start to look at the markets, learning the prices and values, establish what strategy you may want to go with; are you going to be a flipper, a buy and holder etc, and what types of properties you may want to target.
how much do you have saved up?
Thanks guys, all excellent information so far!
I currently have $20k saved. Not much as yet.
Hi Veeedka
begin looking in regional centers that you perceive, have some potential for growth NSW VIC WA ETC
begin with an I.p of 100K or less, that’s already rented or one you can do a cosmetic Reno on. Clean.. Paint and general low cost tidy up… then move in a tenant.
this is just an example:
Lets say you can locate an Ip in a good size regional center at or under 100K less 20% deposit and $2500 for costs
gives you an 80K interest only loan @ 8.07
maybe you have repayments of about < $500 monthly
If rent 130 x 52 = 6,760 less 6,000K yearly interest payments(500 x 12) have an off set account connected to the loan so it reduces the Monthly payments then just save every $ you can for a deposit for your next I.p.
Get a good accountant so you can claim interest and management fee's and other investment expences against your tax and
you may well find that you have a positively geared i.p
As I said this is just an example of 1 strategy to get into the property market …there are probably other more appropriate stratagies that some of the more experienced members of the forum can suggest you look at..cheers Veeedka and welcome to the forum.
Thanks Nucopia!
I've been hearing the term offset account lately, could you please elaborate a bit? What is an offset account, and what is it's purpose?
an off set account
its an account you link to your loan, were you do not receive any interest for money you keep in there.
but the amount kept in the account lowers the total of the loan amount you are charged interest on.
basic example might look like this:
you have an interest only loan of 80K @8.07% and $500 monthly repaymentswith an off set account
you have 10K in your off set account so…. 80K – 10K = 70K @ 8.07 = 470 monthly repayments .. with an offset you lower your interset repayments by $30.Ah fair enough, I get it now. So the more cash you have to put in the offset account, the lower your repayments are, as it's paying off the primary but still keeping the money available. Interesting.
that's correct, I also found out recently that this is also available for interest only loans. So that way you can have money in the bank offsetting your loan when you are only paying interest on it so further reducing your repayments
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