Hi everyone,
I've recently inherited just over $100,000 and am unsure of the best way to invest it. I've placed it in a high interest account for now & am considering putting it in a term deposit for 3-6 months, while I consider my options.
I would like to invest in property, but I'm single and only earn $35k a year. So, the bank will not loan me more than $150k. Furthermore, I'm planning to take a year off work to study full-time next year. Leaving it in the bank seems like a wise (although boring) move at this stage especially with the interest rate rises.
What would you do in my situation? Any advice would be greatly appreciated
.Alotti
There are loans called No Doc loans whereby you do not need to declare an income. You just need 30% deposit. with $100,000, you could buy up to $400,000 worth of property. Whether this is a good idea or not will depend on your situation.
Do you currently have a home loan on your main residence? If so putting the money against that loan may be a good idea. You can then reborrow it for investments later.
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
If you do what most lottery winners do – you will be happy for afew months, but by the end of the year, you'll be back where you started.
If you didn't know how to 'do money" before your inheritance" you better become financiall fluent before you spend this money.
If you educate your self, you've got a great chance of makng ue of these funds.
Please check out this article by clicking here – it could help you.
Hi alloti
Nice nest egg… believe it or not $100K cash is a good position to be in at the moment.
100K properties are out there I bought 2 in N.S.W in the last 6 mnths and will return you about $150 per week.
Better then a term deposit when you compare.. capital depreciation and the amount of tax payable on the gain , against the possible increase in house prices and the income you will receive if you buy an investment property now, not to mention that 80% (LVR )of the equity will available to put towards another investment property in the future.
keep it in the high yield bank account for now , but start looking for an investment property and get a big head start on making some wealth out of property investing. even if you take a year off to study( great move) and gain the benefit of a higher income after wards, the property will be there producing an income and increasing in value and it will be ready to use to buy more properties later down the track. Just save all the income to pay your holding costs Rates insurance etc and the balance save for the next deposit. if you do your laughing.
$100K house.. no loan… just income …its a positively geared investment … that's the way to get a big head start !
good luck !
.thank you for your advice guys!
nucopia, i love your idea! i was assuming that 100k would just be a deposit & i'd have to get a mortgage, i didn't consider buying a 100k property outright. i just had a look at realestate.com & there are plenty of properties in that price range with a good return. i don't know about the potential for growth as i don't know too much about country nsw, but i'm sure the return will make it more than worthwhile & it'll give me a chance to get my foot in the property market.
thanks again, that's definitely something to consider
.Hey alotti,
Good on you. Michael's comments ring out oh so true. It is terrific that you are keen to invest (rather than spend) some of the money on your future. I must agree with the comments on some of the chepaer properties. So many people feel yo have to have a $400k or more property to be an 'investment'…….many of these people are the guys hurting bad now – very heavily neg geared, and going backwards. That said, there is nothing wrong with that if you have done the research, and are geeting great capital growth. The cheaper stuff is good too – just make sure you are careful to buy in an area that is not a ghost town or really small regional area. Really though, some of the sub $200k properties are growing a few percent (5-7%) in value annually – slow but steady, and a great option to look at for making whoever left you the money proud of you. All the best.Alotti
You can find ip's now in N.S.W under 100K and with a return of 135<160 weekly . I know I just bought 2 in the last 6 months …
growth may be a little lower in those area's but still good for collateral with the bank later on.
100k i.P even at 8% per annum growth tied in with the positive income over the same time is way better then parking 100k in the bank at 8 % and paying tax on the capital gain..
i.P's give better tax breaks as well … just find a good accountant with experience in property investing.I have my eye on a half dozen places at the moment and all are around or under 100K. I got cash , so I just need to do my home work and decide if its a good time for me as well.
I really can't say this is a good time to go borrowing 300 or 400 k to get into an i.p that may not have the weekly returns to cover the monthly repayments with the bank
So good hunting and let us know how you go with it !
nucopia
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