ah, if I only knew at 17 what I know now…
get into Mortgage Broking, there are plenty of good deals out there but finding the money and knowing how to structure yourself for tax, that is where the money is in my view.
Visit say a National Bank – Ask for all and any loan documents and product info.
You should then learn all the loan product info.
You then need to go over the loan documents to understand why and what banks need. (get 5 copies of loan doc and practice)
Understand a few things – banks like 2- 3 years stability in PLACE OF RESIDENCE – INCOME/JOB/BUSINESS – Always fill in the form completely.
Do not tell every detail of your life eg: If you lived in same area for 3 years but moved to 5 different addresses use last 2 or longest to present an image of stability.
Average total of MONTHLY expenses used by BANKS for people on income is: (including insurance, spendings, debts ,study etc) $800 – $1200 – being say 19 when you go for first BANK loan (maybe without guarantor), you need to explain or show why you may have less expenses eg: good saver, live at home.
OTHER: banks will look to see a saving history – if credit tightens then your history will show bank you did not get a lump sum from a deceased relative or 19th b’day present.
TRICKS: some people get a credit card from the banks to start their credit rating and initiate a partnership. This can be tricky as you need a high amount on the application to get the go ahead (bank fact: biggest bank loses are on CC with balance $500 – $1000)and high bad debt MAY create poor life habits at a young age.
check out loan insurance options as younger lenders will be considered if they are frugal and choose insurance.
GUARANTOR: this is a viable option. NEVER ask or consider placing your parents or friends assets as collateral.
YOU can sign a good will guarantor form and definitely seek some legal advice if you go down this path. It can be a WIN – WIN. The benefit of the later is no one is liable except you and the good will guarantor can help you and the bank come to an agreement if times get tough.PAYMENTS: THIS IS IMPORTANT.
If you ever get into financial trouble the credit system relies on you making a payment.
If your living funds are depleted unexpectedly and you are in a tight spot; keep in full contact with your BANK
Keep any payment at the same or more regularly – WHAT? if you have to repay $500 per week and you only have $10 left – pay the $10 dollars to maintain the habit.
WHY? if you get to a court for the debt and you show a good savings and repayment history the judge may rule in your favour; if you are making every effort to honour your obligation. THIS MAY GIVE YOU TIME TO ACT! (sell or consolidate)These are some tips I have used or heard or have seen. I am a Plumber, I do not have any financial training outside of a Bachelor of Commerce Degree and business experience. I worked in a Bank doing Personal, Student and Home loans for 3 years.
I hope the ideas help you realise that the better info you get or supply to lenders the more confident they will be when deciding your financial future.
I am happy for your current progress.
Thank you to everyone that has taken interest to my situation all your advice has been fantastic ! Im only replying so late because i have been in bali for the past week and a half. I spoke to a plumber today and he wants me 2 work for the next 2 weeks for him, so im hoping that if i work hard enough ill get a job !!!
If anyone wants to contact me personally my email and msn is [email protected]
Does anyone have any other suggestions, that could help.
Any advice would be appreciated
hi wdemirdonder, u asked earlier whether your mum could buy the property first then later transfer it to you so u'll still be entitled to the fhbg. its all smooth sailing until the transfer part, if u did it like that then you would have to pay stamp duty and possible CGT. im still learning too but i think if you initially set up a trust and ur mum took out the loan and use the money so the trust buys the property, you'll enjoy all the benefits as if you bought it under ur name plus u still have ur fhbg plus if u did it through a unit trust then u can claim any negative gearing.
Pat
Your an inspiration wdemirdonder
I'm starting out at 24, and too only have about 15k in savings. I've put money into managed funds before, and I now I rather take an interest and know how of where I invest my money. Too bad, banks & lenders don't take managed funds as equity.
ume, you legend, I read your other post, and it did not occur to me to set up a trust to buy an IP, so you don't have to for go the benefits of first home owners grant. Can you explain, a bit more on setting it up, and how it would work.
I think wdemirdonder, would probably like to know as well.
well i speak from no experience of my own, im 20 and just about to get into this property game, but from what i gathered. say u have 20k of ur own, u set up a trust with u as the trustee and one of the beneficiaries (need another beneficiary if ur to be both trustee and b.) then u put ur 20k into the trust from which the trust then buys the IP with the 20k as a deposit. So in essence, the trust owns the IP but passes the benefits to u, eg rental income or negative gearing since ur one of the beneficiaries, also the IP is protected from lawsuits through the trust structure. But check with someone professional as to which trust structure best suits ur needs and goals as theres no one fits all trust type.
Hello
While I have no knowledge in this area I have read several posts on this forum which say that you don't loose the FHOG if you buy an IP first. It's simple to confirm. Just ring the SRO (state revenue office) in your state and ask or look at their web site.
While much of umes' post above is correct, a normal discretionary trusts cannot distribute losses (your negative gearing comment ume). These are trapped within the trust and are later used to offset profits for income tax purposes. There is one sort of DT called a hybrid DT which is/was able to overcome this problem but there is currently a problem with the ATO regarding some of these sort of trusts.
There is plenty of information on the forum on both these subjects so if you do a search you should be able to find it.Great to see you all starting so young.
Good luck
ElkaThanks to everyone for the help and time answering my questions.
This month my mind has gone crazy i have been reading as many forums as possible as well as realestate.com.au/realestate newsletter, Domain.com, and ninemsn news section for information on the property market.
i am also currently reading "How to create an income for life" by margaret lomas.
Im finishing year 12 in 5 months and im pleased to say i have an appreticship lined up with a plumber up the road. Once i start work im going to save and much as possible and work and study hard so i can acheive my goal of purchasing a property in Melbourn by 2010.
Ok this is the advise i give my sons……." don't get a girlfriend till you're thirty" Seriously tho girls shouldn't expect boys to shout them anymore. And getting tied to a relationship and living in your own home is not a good recipe. I know logic hasn't a chance against testosterone. but do try to select a gf who has similar goals.
I didn't get into property investing till I was late 30s, widowed with 4 kids. Im steering my kids towards trades (preferably different ones all in the building industry). I am a teacher by trade but my boys understand that I could never really get ahead on wages. It is through property that i have found teh financial freedome to spend time with my kids.
If you have financial freedom you work only because you want to. Aim for that. Go to uni then and become a sculptor or wotever you want to be.
Hey, i dont mean to hijack this thread but i find myself in a similar situation (in terms of age and getting a loan) and wish to ask a couple of my own questions. hope no one minds
My situation:
Im a 19 y.o uni student (2nd year architecture/construction management) living at home – and im interested in investing in property.i, like the thread starter have also read a bit (rich dad poor dad, etc) but have never had the balls to take the plunge and go out and invest.. or even shop around to.
As other uni students may know, the work load can be demanding, making jobs (even part time) a struggle to keep up with, and also keeping up with the uni social life like getting smashed on the weekends or going out with friends takes funding.
Im currently working for a building company and bring home around $300- a week, (after tax but before my spending..)
and ive also saved a bit (10k praps?)could someone in my position comfortably keep up with repayments? Will a bank even approve someone with such a low weekly income? Will i have to sacrifice jager bombs on the weekends?
Hope to hear from y'all soon.
-Peace.Some tips:
– get a part-time job now, build up some history and then go full time immediately after finishing school – you may be able to qualify for the loan straight away if your income is sufficient.
– get a cheap place to start off. COnsider getting the FHOG and living in it 6 months, then moving out and renting it while you live at home. It can still be CT exempt while allowing you to claim expenses etc
– get a IO loan with a 100% offset. never pay down the loan.
– Consider getting a job where you can learn about property. Finance is good as without loans you cannot progress very far. Do you job for a few years and then move on to another area and build up your knowledge. Building knowledge is great.
– Don't bother going to Uni, but Study for a Law degree on weekends. Will come in very handy. http://www.usyd.edu.au/lec/BTW, you won't be able to get a loan until you are 18.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hey wdemirdonder
Mate well done for thinking ahead. I was 19 when I first invested in property and I can tell you that since then I have matured a lot quicker than my friends and as a property investor.
My suggestions would probably be fairly similar to the majority of members who posted here, but in a nutshell I'd recommend:
1. You keep saving for at least another year or so;
2. Meanwhile keep reading any media related to property, particularly around where to invest now, where the market is heading and why, so as to position yourself;
3. Seek ways to obtain finance, perhaps through your parents as a guarantee. However I strongly make the point that banks need to ensure that you are capable of making repayments. If you feel this may not be possible immediately then I'd suggest staying low for awhile as you do not want to start your young career with a bleep on your credit history;
4. Attend property seminars to network with like-minded individuals, who will motivate you and assist you in achieving your property aspirations. I am part of a network called PKG, which has boosted my knowledge and network in the property game ten-fold. Refer to my earlier posts if you're keen to attend the next seminar in Sydney which is on the 30th April 2008 at 6:30pm.
Hope that helps mate.
I really apperciate all your comments and advice.
After reading all your comments ive come to the conclusion of starting a plumbing trade at the end of this year 2008, ive already been offered an appertiship and i will begin that after completing my HSC. I will work hard that year and save everything i make, ensuring that i will have a good deposit as well as good saving history for the bank.
After my second year i will begin to search for my first IP, and get a Line Of Credit (LOC) loan…… Is this a good idea ?
All advice would be appreciated
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