This has been put into a different forum, however I thought I'd put it in here as well to broaden the responses. I did, however, receive a very helpful response from 888Abundance.
Hello all out there, my topic has been hashed over in different forums to some extent however my particular situation hasn't quite been catered for. What better way than to create my own thread?!
I jointly own a unit with my Fiancee (PPoR) in Newcastle with about $80k equity (310k value). I am looking to start in this property game without risking too much of the equity in our unit. My partner and I are on modest incomes so are unable to be exposed to too much gearing.
There are a number of options available including purchasing a house to renovate and sell on, creating a CF +ve property (not many of those in my area), purchasing a small unit in order to more easily service the shortfall on the mortgage, or going all out and purchasing a house on a large block with a view to putting several townhouses on it.
With interest rates rising and property prices seeming to be fairly stagnant, I am not sure if this is a good time to get into the game, or whether it might be best to look into a managed fund or something similar for the next few years. Unfortunately our limited income means we would not be able to afford the holding costs on any decent sized mortgage.
Does anybody have any advice on the most appropriate method of making money on an initial twelve to twenty four month timeframe? I am leaning towards purchasing a house to renovate then rent or sell, however I don't know if there are many buyers in the market around that price range at the moment.
Thanks for your help!
Al
Hi, you might want to investigate 5 year bonds, especially when interest rates go up. We've had a few rate rises so bonds should be around the 8-9% mark. I don't know the exact rate, because I'm geared up in property & have not investigated cash rates.
It's just that in the last couple of weeks, the thought of bonds has randomly popped up & floated off. It's the sub-conscious little voice coming into the radar range.
Anyone with similar vibes or anyone with knowledge or experience with cash markets care to comment? will value any opinions.
Incidentally, I have a lot of faith in the little voice. It's been mostly right.
The drawback with bonds obviously is that your yield is only on the amount of cash you can stash away. One variation that I'd use would be to leverage my IP & PPOR & lock away the funding proceeds in a fixed rate bond paying high interest in a DIY super fund.
Then the next step would be to peg away at my mortgages – paying down as much as I can from my salary. It's mostly an accelerated savings program. I'm thinking it might not be a bad idea to have more cash reserve.
Excuse me talking to myself. Just playing with ideas.
KY
You can get a FREE getting started eBook at http://www.apin.com.au and lots of other FREE eBooks as well …
You must be logged in to reply to this topic. If you don't have an account, you can register here.
