This is my first post on this website, so perhaps I should introuduce myself. I have been a member of this site since February 2006, and since then, I have actively been reading forum topics and other articles on this website, and learning valuable information from other members. I have watched early-stage hopefuls grow into seasoned investors, and seen seasoned investors turn into gurus. Meanwhile I have not had the “cojónes” to take a step beyond self-education. I now feel the time has come to take action and make some purchases, although the bigger picture has a few issues that need addressing at the same time.
I have been employed as a manager within the petrol industry (yes, those greedy buggers!) since 2000, and have finally had enough of being another “corporate slave”. I’m now considering trading it all in and moving interstate to start a mail contractor business (I know, I’ll theoretically be working for Australia Post, but I’ll be a contractor, so really I’ll be working for myself, and lets face it, if I have to work, I’d prefer to work for myself than someone else). I am currently negotiating with AP, and, so long as all goes to plan, should be commencing in October this year (2007).
I will be moving from Adelaide to Brisbane/Gold Coast area 1st week of October, and my wife and son (will be sons in just a few days time) will remain in Adelaide until I am settled and have found us a decent place to call home. We anticipate having another child in the next few years (hopefully a girl, then we’ll have the 2 boys and 1 girl and call it quits), so we would be looking for a min. 4 bedroom house to comfortably raise the family in. My retired parents also want to move from SA to QLD in the upcoming months, but would need our financial support to be able to do so.
We have just set up separate Hybrid Discretionary Trust structures for the business and for investments. We have a $200+K bank balance with zero debt. No properties or other investments, just earning high rate interest from the bank. We are currently renting in Adelaide for $210 a week, and will continue to do so until the wife and kids come to QLD. I will be renting a room in a share house for approx $100 a week until they come. Now that you have read my autobiography, here come some questions.
1. (Unrelated to property) Do you have any concerns on the Australia Post contract? Have you worked with them and found it to not be worth it?
2. Should we endeavour to purchase our 4br home (limited to $450K) immediately, or pay rents of up to $400 a week for a 3br for the time being, and start with IP’s?
3. To save my $100 a week share house rent, I considered purchasing a holiday apartment outright, living in it until the family comes, then using the equity and future income from it to secure finance for our home and future IP’s, but have found only negative comments about it from previous forum topics, and am now talking myself out of it. Your thoughts?
4. Now I’m thinking about purchasing (either outright or with finance) a cheapish suburban unit or house to live in, then using it as financial security and income for our home and future IP’s. Any suggestions?
5. I want to join the 2008 RESULTS program. I don’t know whether I should start purchasing property (either PPOR or IP) now, and risk making a critical error due to a minor issue I haven’t learnt about yet, or wait until RESULTS start in June, and risk property prices rapidly increasing in value. What would you do?Thanks for getting to know a little about me, and thank you for your help and guidance.
Joeyhaving "been there and done that" recently I throw my 2 cents to you.
my experience is we should have moved here and lived for 6 months or more before buying. to gauge areas, schools, traffic flow (or not) etc as the Gold Coast is very spread out.
we brought the apartment and considered keeping it as an investment. the reality is the cash flow from holiday apartments is very hit and miss. with body corp fees and management fees the purchase of a holiday apartment is generally a lifestyle choice.
and the problems with tenants and managements is a whole other story.your 4th point has merit to me, as this is something i should have done. instead i brought the apartment off the plan before arriving here and it is now for sale. with the money from that i intend to rent, probably somewhere that i could not afford to buy, and use my equity to fund IPs.
the GC market is cruising along at the moment and it may pick up in the future but getting to know the area and knowing what not to buy is going to be more important.
ps like you i have been a member for some years, reading forums etc, and this is my first post. i will be diving in when my aparment sells.
Thanks for the feedback Littlelot.
It's nice to get an opinion from someone who has recently done what you are thinking about doing!
So, if you were to choose to buy a cheapie (but not too cheap…) to live in for the first few months, where would you suggest to buy, and not to buy, keeping in mind that you yourself would be living in it for a couple of months, and assuming that you have the same preferences as I do (I personally don't like Nerang (GC), Palm Beach (GC), or in Inala (Bris.), Woodridge (Bris.) and Waterford (Bris.)). This doesn't mean to say that I wouldn't buy in these areas purely for IP purposes, I just am not comfortable residing in these suburbs!Are there any other forumites that would have any suggestions for me, and anyone in my position, with regards to any of my questions above?
depending on your point of view there is not much cheap on the GC at the moment. your negative suburbs you mention also include areas in Brisbane. are you prepared to commute that far? you will buy more around Brisbane for your money.
most 3bdrm houses/townhouses are over $300k and thats the cheaper areas. for areas you might consider living yourself probably start with the suburbs west of the M1, around Coomera, pacific Pines etc not that these are the best suburbs but there is a lot happening there. closer to the beach and pricier look at Ashmore, Molendinar, crestwood heights for central areas
Hi Joey,
I am also a newbie but somewhat in your situation as per the info you have provided i will think that this will be good option now other experience ppl on the forum will help here is my 2c worth,
As you have mentioned both of this that you will be paying upto 400/ week in rent and also considering to buy a property.
Now here is what i think,
if you will be paying rent based on the exact figure of 400/week you will be paying something $1733/mth in rent (now i guess that will be your suburb of best prefrence to live not sure)
But if you will buy your own property may be a little cheapie you can consider upto 270k as that will equate to 1733/mth intereest only in repayments at 7.75% (used soem online calculators for this) and you will be paying 1750/mth plus any maintenance and council rates or you can reduce few thousands from purchase price to balance it out. you will get these benefits
1. You are not paying someone elses mortgage.2. You can turn this property into IP later and buy your own Dream House with the equity etc.
3. You will get all your Govt grant which you are eligible for as my info is concerned you dont get that once you have a property on your name it may be IP correct me for this please if i am wrong.
4. You will get time to settle there with your family and know GC.
And one more thing i will do is that i will not use all my savings to Purchase the property outright as
you can use say upto 20% deposit to save LMI. get rest of on loan with an offset account and then transfer all your savings into that offset account and that way you will reduce the interest you pay on mortgage and still pay 1733/mth with principal reducing any way and also you got your all the savings on call if you need it for anything and also when you go out to buy your home or may be another IP
And in this way you will save interest on your current property which you can transfer to IP later and also dont have to fork out TAX on your interest which you are earning on your money at the moment.
I hope it helps if you need any clarification please send a PM or post it here will reply back.
Cheers,
Bharat.Thanks for the comments my newly found friends!
Littlelot, as my occupation would require me to be travelling around greater SEQ on a daily basis, my personal residential preference would be anywhere from Bribie Island in the north to Robina(ish) in the South (don't want to go too far west though), although the more central to Brisbane the better, GC would be a lifestyle choice, and I'd have to take the extra commute as a small sacrifice for a little pleasure. Have you (or anyone else reading) any comments (neg. or pos.) on Greater Brisbane areas?
Bsgupta, your opinion is exactly the same as what I was thinking of doing (nice to see someone else thinks the same way I do)! My dilemma is whether to buy a PPOR now (with the minimal deposit possible to avoid LMI) and then go for the IP's later, or start with the IP's first, and sacrifice on the family home for a while.
The bigger picture (provided in my autobiography in the original post above) provides the problems (or in some respects, blessings!) I have, and a couple of solutions that I have come up with. Just imagine yourself in the position I am in, with unlimited choices, I just know that there is ALWAYS a better way to do things, the hardest part is finding them.
Comments from newbies like myself, to veterans of this industry are welcome, as fresh new ideas are just as good as the old tried and tested!
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