Hi all,
You must all get sick of hearing this question but we really need some advice.
We are a couple from Perth and really want to start getting some wealth and capital behind us but are both totally confused about where to begin. We earn a good wage between us of around $210,000 pa so it's important that we also minimise our tax outlay as it's fairly heafty.
Some info on our situation…I am pretty much debt free, I have one credit card for emergencies which is always paid off should i need to use it before it starts to incur interest. I have one small personal loan that costs me $200 a month which I am planning on paying off in a couple of weeks. It is a legacy of a previous relationship and is for $11,000. My fiance already part owns a house (Tennant in common with a family friend) and has a mortgage of about $70,000 (The house is worth about $600,000) and a minor credit card debt of $2,500. We don't have much in savings though…I will have about $15,000 in a few weeks and my other half has about $10,000.
I have never owned a house so i think i should be able to dodge my way into getting the FHBG and the stamp duty concessions WA offers.
Is investing in property the apppropriate vehicle for us and what in your opinion is the best strategy to go about getting started?
We are currently looking at some house and land packages but unsure if thats a good place to start. We are both pretty handy so a bit of renovation might be OK but we are both professionals and work takes a large portion of time so I'm no sure this is particularly appropriate for us.
Our main aims to re-cap are:
– Generate capital gains
– Generate cash flow (wealth)
– Minimise/reduce our tax paymentsI will also look at investing in some funds/shares as well so as not to put all the eggs in one basket.
Thanks in advance for the help.
Kyle and Cat
I think property is the ideal choice given your current situation and future goals. If your decision is to only invest then you should look more in to eastern states as I dont think Perth has much to offer for investors now….maybe except some individual areas which could be hard to find. So you might be faced with a dilema of either invest or buy a property and use it as PPOR to get the FHBG and free stamp duty then rent it out after a short time. The problem with the second strategy is that if you guys buy in the wrong area, at the wrong time then it could take quite a while before you see some capital growth which could slow down your wealth creation process.
Sometimes you have to let go off the smaller fish to catch the BIG ONE.
If you're interested in purchasing in Perth invest in a suburb that will be rezoned soon. You may need to do more research.
Hi Guys,
A couple of thought I had while reading you post.
1. FHOG – Your eligibility for this may depend on if you fiance has occuipied her property (ie PPOR vs IP), assuming you are living together and intend to purchas in both names. If you are not living togehter and purchasing in your name only then you should be OK – but seek further advice. You will still need to occupy it as PPOR sometime in the firts 12 months though.
2. PPOR – Obviously this would be in Perth. I assume you are renting? Are your intentions to buy a PPOR prior to an IP or the other way around?Is there any reason you would need you IP in Perth? You may find a better yeilding and growth property in other areas including interstate. A bit scary for the first time though, but if you do you homework that scary feeling may give you far better results than the safe in the backyard option. Just a thought.
Work out your budgets and how much you can use a deposit and ongoing repayments. Whilst you have a high income, dont underestimate the value of a budget. A lot money can go in a lot of little places and when there arent any great bills to pay it is easy to kid yourself that it doesnt matter. Track it all down and account for it. No jugements, but your current lack of savings on your salary suggests that you are yet to do this.
You are in a great position with you incomes and lack of debt. Now work on the savings and budget and you will be in the best position. In the meantime, read, research and ask questions. Talk to a few mortage brokers, realestate agents (phones work interstate so research on the web), check out Australian Property Investor, pick an area and research some more. It will all take time and hopefully you will have your budget and savings all sorted ready to hit the ground running.
All the best
Tammy
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