All Topics / Help Needed! / Buy own home first or an investment property?

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  • Profile photo of Louise M77Louise M77
    Member
    @louise-m77
    Join Date: 2008
    Post Count: 8
    February 24, 2008 - 10:12 pm

    Hi, I would really appreciate peoples advice about my situation. I have recently become interested in property investing and have been researching a particular market to invest in, however I'm unsure whether I am financially well off enough to invest and also whether it would be better to buy my own home first with my partner and then use the equity in this to buy an IP? I am concerned that if I do wait and buy my own home first I will miss out on this particular market.

    I have minimal savings of $10K, have not debt and am currently renting. Another thing I should factor in are some short term financial goals (2-4years) including a wedding and starting a family.

    Thanks in advance

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674
    February 25, 2008 - 7:10 am

    You need to work out a budget and see how much spare cash you have after paying all your living expenses. Then you need to ask the bank or mortgage broker how much can we borrow like a pre approval . If you go for investment you need to look at an area where you think you can afford and find similiar properties to get an idea what the rent will be. Then take $2000 off this for expenses or make enquires on what the insurance and rates will be for the house. You need this figure to work out how much you can borrow as the banks sometimes use it as additional income. If you want to be safe work on a 12% interest rate scenario to give some breathing space.
    If you want to own a home you need to talk to a bank or mortgage broker to find out how much you can safely borrow as rent will no longer be an expense to the lending bank. You may be eligible to get the first home owners grant.

    This way you have an idea if you can afford to own your own home or an investment property.
    You may need to factor in the loss of your partner's wage due to starting a family.

    I can't give you specific advise but with the discovered financial information you may be able to decide how to go forward.

    Profile photo of Louise M77Louise M77
    Member
    @louise-m77
    Join Date: 2008
    Post Count: 8
    February 25, 2008 - 9:31 pm

    Thanks for your advice Duckster.  I have an appointment with a mortgage broker this week and so far I have been looking at heaps of properties in the area just gettng a feel for what's out there and what you get for the money! I am blown away by how much you need to know and some of the posts on ths site have scared me off investing a bit.

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