Hi Okkamooie
We haven't yet discussed what to do with the land. I have no idea of the details of it and my sister claims not to have either. It's always one of those touchy subjects with the family and when I bring it up they all change the subject as if the mere fact of discussing would have my father turning in his grave as we might be considered "greedy" or something. I tell them he left it to us because he wanted us to have something so it can't be considered greedy.
They all have their own homes and unfortunately I am the only one who doesn't. It will have to be discussed soon and I'll make the suggestions that we sell or build on it to rent. Apparently it's a block between two or three others who use it to store their dumped cars etc on. I have no proof of that as I have never seen it and apparently neither have my siblings. They all say no one would buy it when they can use it for free!
This is such a heavy but interesting journey for me to be on right now and I am planning on documenting my experiences in a blog as I have never read anything that sets out in detail someone's distinct struggle with acquiring a property, IP or otherwise for the first time.
I have about one million books by my bed all waiting for me to read! I am currently reading Anita Bell's "Your Success in Five Years or Less" which is case studies of those who have done it. Some of them very low income earners etc. Of course there's still a lot left unsaid but at least it has given me hope that it is possible.
I have not much time unfortunately so entering into an agreement with another is not really an option right now. I do have a fantastic business idea which I believe would be successful (don't we all) but don't know where to start with that either. Ho hum. More research.
Nina I don’t have any invesment properties as yet so take my advice as you will. In my opinion after reading your situation I would be focussing on purchasing a PPOR. The reason being is that given your stated level of income I doubt you would qualify (nor would it be a good idea) to take out a loan for an investment property at this stage. Any period of vacancy would tip you over edge financially. What you have said though is that you are earning enough money to pay the rent. I would be focussing on finding an area where you could purchase a home for a similar figure to the amount of rent you are currently paying. This of course could mean moving to an area a bit further out. The benefits of this in my opinion include 1)Locking in a property at todays prices. 2) By taking the step of purchasing a property you can begin accumulating that magic thing that appears out of thin air- EQUITY (the difference between what you owe on your mortgage and the value of the property). It may take 5 or 10 years, but as house prices increase and your equity does, you could find yourself with $50,000 or $100,000 worth of equity at some time in the future. Nina by this stage your husbands income may have increased and you can then use this equity to obtain loans to fund further purchases of property or shares.
Nina two years ago I was in a similar position to you. I decided to bite the bullet and purchase a place just to get out of the rat race of renting. I had minimal deposit and even took out a small personal loan to increase the amount of initial deposit I had (generally the higher deposit you have initially the lower the interest rate will be) so that over the life of the loan I am paying a lessor interest rate than those no money down loans (you then pay down the smaller personal loan ASAP as it will have the highest rate of interest). The result? Two years on prices have increased and I now have around $50-60k “equity” which has appeared out of thin air. I would never have been able to save this amount of money over a two year period.
It may take 10 years or so nina for this kind of equity to appear but would you rather be sitting back in 10 years with 100k of equity or nothing?
Given your stated financial position though nina it’s very important you don’t over extend yourself in the current climate of rising interest rates. Be realistic and give yourself a buffer for interest rate rises.
Just my schmuck opinion. If anyone can pick it to pieces then fell free to do so.
Good LuckHi nina10,
For your business idea there is heaps of government help. State Development is set up for this purpose especially.
Good luck on your journey.Skids
Yes, perhaps look into the NEIS scheme (New enterprise investment scheme, or something like that). They can offer you help. I think it is a federal program, not a state one.
Hi Nina
I have to agree with THEHEATH. stop paying 280 a week in rent and start looking for a house you can buy and pay 280 a week on the mortgage with first home owners grants and a tight budget you should be able to find some thing a little further out in the burbs … look its simple… 280 a week rent is dead money. 280 a week on a mortgage is forced savings .
I know its not easy as i am on a pension my self my wife does not work and we have 3 kids my income is 52,000 per year but we have over the last 3 years been able to buy 3 Ip's and with the equity from these are now waiting to settle on 1 more low priced IP.. So a low income is not a hindrance, if your willing to do what it takes to change your situation.We fixed up my mums gararge for my wife and I to live in our 2 girls are in the spare bed room and my son sleeps in my mums sewing room…. we live on what you pay in rent every week (280) and shop at St Vinnie's for 2nd hand clothes shoes and the like but in a few more years the sacrifice will be worth it.
That's what you need to look at …why pay off some one else's morgage when you can pay off your own….
Its your choice to pay 14,500 every year for a place to live and if its some one else's house then good for him and sad for you.
But its your choice if your not happy… change the situation !
if you want some thing bad enough you will do any thing to get it !
start looking for a cheap house to buy and talk to a reputable broker on how to get it..
There is always a solution if your willing to do what it takes to make it happen whats hard is to actually do it.. and not just think about doing it .
Good luck and keep us all posted on your progress !Hi Nina
It is great to see another person who has decided to focus on investing (me too). I agree with Nucopia about the rent you are paying. It is an awful lot of money going into someone else's pocket. If you really want to get ahead, renting a unit for even just a year or three would benefit you greatly. Of course there will be grumbles but which choice will benefit you and your family the most in the long run? Crummy pension and public housing on one hand, own home and improved financial security on the other. Hmmm… easy choice.
The $$$ saved can be placed into a managed fund and this can be automated so it is a no brainer process. Some funds require you to have a specific amount to start with and others do not. Clearview is a fund that lets you start with no money and details can be viewed at http://www.clearview.com.au/products/managed_investments.html. There are probably others (and better ones) but this is one that I have used without any problems. Saving the initial sum of money is the most difficult part. After that it gets easier. Make an automated savings plan your number one priority.
My husband an I have always been low income earners but we own 2/3s of our 2nd PPOR current value and we have just purchased our first IP (major milestone for us). Our first PPOR was a tiny 99 square metre 3 bedder – the smallest house in the street. We added onto it and put lots of elbow grease into the property. The neighbours laughed as we turfed our front mud patch with kikuyu runners after they had paid a couple of thousand $ for their new lawn. 18 months later you couldn't tell the difference between the turfed and runner lawns. We have three kids and have always done it tough. There are now 'spenders' who envy our very modest situation and have some misinformed idea that we are lucky and have more money than them. We have always taught our children about advertising and the branding power so they have never insisted that they can only wear Nike shoes or expensive surf brand clothing.
I don't know what you currently pay now but Optus has a plan that costs $69 per month which includes 2GB broadband and unlimited local, mobile calls to Optus GSM phones and STD calls for that price. Or $89 for 7 GB broadband download. The plan locks you into a 2 year contract.
Where to start?
1. Pay off your bad debt, eg car loans, credit cards, store cards etc.
2. Save for a deposit. If it will be your first home, and you can buy a small home or unit to begin with, you might find you dont have to save that much if the First Home Owners Grant is available to you.
3. Save up for your next property. Use either ING (or something similar) or a managed fund (if you can accept some risk) or put it in the offset of your mortgage.
4. Let us know when you are up to this step. We can discuss the options then.Great topic!!
Why can't you buy a house to live in if you pay $280 per week in rent?
I just jumped on ratebusters (good calculators) and you can pay off a house that costs $180k
1st home buyers grant takes out the deposit problem. Get a house that is run down for $160k. fix it up cheaply. redraw the sweat equity to purchase investment property. repeat.
I have done this whilst working as a casual with 1 kid by myself.You cannot build equity whilst renting.
You said that your husbands travel costs get reimbursed by his work. By moving yourself out of the city and a way how much rent would you save? You shouldn't have any increased expenses for travel and you would be able to save maybe $50 a week. i don't know the rental market in brisbane so i'm just guessing here. This could be an option if you are currently unable to buy something with repayments of $280 a week. if you were to do this for 18 months to 2 years you would be able to save yourself a few thousand dollars. The night shift work sounds like it could work for you as well. if you could work 2 or 3 nights in a week maybe and earn a few hundred dollars a week, added to the rent saved you would be able to save quite a bit of money over 12 months.
Tatts
Nina, I really feel for you…I started out by renting a caravan, nearer to my work. Then I drew up a budget and figured out what i could afford to pay off per week, I then drew a cirlce on a map of where i could live and get to work on time with having 1 hr a day to do renvation stuff. i then purchased a property on the edge of the circle for cheaper than i could afford, used the excess pw to pay for paint, nails, timber.etc. i then did a little project here a little project there, and built the equity of the property to borrow against as a deposit for another property closer to work. My goal is to eventually retire to the first property after buying and renovating enough properties to build a passive income of $100k PA. just do what i did.
All such concerns as petrol and such were well covered by the increase in property value, i even refinanced one year so I could pay the rates and build a picket fence.
You can do it!!
Kenzel said
"Read all the Margaret Lomas books, Noel Whittaker, Jan Somers, Peter Spann, Steve McNight's (later) books for nuts and bolts." – Are you able to recommend any specific titles from these Authors? I'm looking to by my PPOR in 1 year's time (and turn it into an IP) and would lke to better prepare myself knowledge wise.
Margaret Lomas books – "The truth about positive cashflow property" "How to create an income for life" "How to make your money last as long as you do" "How to maximise your property portfolio"
Am currently reading the first mentioned title and is quite good, haven't read the others yet although i have a copy of the 2nd title as well to read once i finish the first one.Have also read 2 of steve mcknights books, "0 to 130 properties in 3.5 years" and "0 to 270 properties in 7 years"
would reccomend both of these although they are both a bit dated now. the 0 to 270 one is alot newer but bot are a good read.Haven't read any books by the other authors as yet so can't comment on those.
The books L.A. aussie mentioned below, i have read these and enjoyed them all.
"For inspiration read Rob Kiyosaki's "Rich Dad" series, The Richest Man in Babylon, Think and Grow Rich."
Especially like Richest man in babylon, only a small book but an awesome book.Tatts
Something else nina,
The plan I mentioned above will have you in your own home by christmas (a fantastic feeling), but also you should be able to get a better place if you go for trashed gardens, and a poor paint job. Both of these are easy to fix for cheap but also massively affect value. I let the garden go wild at my place for 6 months and got the place valued at $110k, i paid $300 to a gardiner to come in and do a total cleanup, ONE MONTH LATER valuation was $135k…I got a $25000 dollar return on a 20 cent phone call and $300 investment!!!!!!!
The place I am working on now with my new wife, we have taken from $115k to $200k just by fixing up some basic image problems. You will never get paid so well part time as working for yourself in property.Hi everyone
I've been away from the computer for a few days but thank you to everyone for your fantastic suggestion. I knew if I put the call out there I'd get some feedback. While what may now seem like a good idea to you all I'm sure it was hard for you too to know where to start. I guess we get caught up in the feeling that it seems impossible and even finding out what is the first step one should take seems incredibly daunting. I am now a whole lot wiser than ever before. I also ask everyone direct questions about their experiences of getting into their own homes.Boshy888
I already teach my children about brand awareness and the lure that clever marketing creates. I don't believe that the most expensive is always the best and nor are any of us driven by the need to have the supposed latest and greatest. I also don't believe that the cheapest is always the best either. I shop for quality and best value for the money I can afford to spend.I've been reading a lot of budget saving books and it seems I'm already savvy in that regard according to the tips offered and in fact seemed to have some that others didn't. I will look into the optus deal though but hate to lock into contracts of any kind and have always said I would never do it again after past experiences.
I agree with you all that paying $280 per week in rent is dead money which is why I am so determined now to change the situation. Where can you buy properties worth $160 000 though. Even in some towns where no one typically wants to live with little infrastructure and few job prospects, no schools and all the usual desirables, it's almost impossible to get anything under $200 000. I'll keep looking but any tips would be very welcome.
My husbands travel expenses are only repaid for the time he spends driving his car at work while for work purposes. I am working on ideas to increase our incomes etc and I am determined to make it work for us. I know I'm starting late but hey…better late than never.
Hi Pendo
You offered to help me with a list of financial planners/advisors in my area. Can you provide me with your email address?Thank you
you may be suprised on what your father's property is worth. check out Realestate.com to compare it.
Hi Nicole
I did. I was surprised! I told my sister and she didn't seem to still think it was worth much. I'm already so much wiser from all the suggestions that have been made on this forum and so glad I found it. I'm well on my way to making decisions about where to go from here.Hi Nina, it's never too late and as you are only in your 40s you have plenty of time. We are way past that, my husband is 60, I'm 52 and we only started investing in IPs last year. Bought our first one 12 months ago and have just settled on our 2nd on Friday this time sharing with our eldest daughter.
Admittedly we did have our own PPOR, but never in a million years thought we could use the equity to get into investing as we are on very low incomes and didn't want to get into debt….. God forbid…. you don't get into debt. We are baby boomers afterall. Well, so we thought!!! Now we know better. We have survived on low incomes for 30+ years and brought up 3 very beautiful children who are well on the way to investing for their future now.
I started out reading all of Margaret Lomas' books, Think & Grow Rich and the Richest Man in Babylon are excellent for getting that mind working overtime, Peter Spann, Michael Yardney's How to become a property Millionaire in your Spare Time is also good. The Australian Investment Property magazine is also a good monthly investment.
Read, read and keep reading. You don't need to go to $2K+ investment seminars as there is a lot gained by going to some freebie startup ones (with the $2K promotion at the end) but you can pick up good tips and this forum and the Somersoft one are excellent too.
All the best.
Jenny
Dear Nina
Good luck in your quest. My suggestions are to:
1. Try to find out more about the Gympie land – where it is located, what it is worth. Approach your brothers and sisters for help in having the estate finalised so that the land can be sold and a distribution made to you. This could be a valuable deposit for you towards property – either an investment or your own PPOR. Approach the solicitor to try to resolve this harmoniously as quickly as possible. If he doesn't have the time to resolve this now for you, perhaps you could ask him to recommend another practicing solicitor. Your father left the land for his children and would have wanted each of you to be successful. Your other brothers and sisters have their own homes, ask for the help you need and you will receive.
2. Consider further ways to increase your/your husband's wage. Check out some of the job websites to see what similar positions are available. If your landlord increases your rent, you need to have a fallback plan to cover a rental increase if this happens.
3. It sounds like you have already considered every avenue to cut down on expenses. Try the simple savings website http://www.simplesavings.com.au/. There are lots of freebies and a lot of useful information.
4. Keep reading. All the books previously recommended are a good starting point.
5. Keep looking for every way to save a deposit.All the best.
LizHi all, I wonder if anyone would be kind enough to tell me where to look for the good properties i.e auctions passed in – I am just starting out and just cant seem to find this info.
Thanks
Caroll
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