I have just become a member of the site after having read Steve's books. I'm in my second year at uni doing a law commerce double major at UWA. I am eager to get into investing but lack confidence and money. Is it wise to take money from my life savings to invest in property? Is there someone who can talk to me about how they went about acquiring their first few properties?
Please reply if you can help
Regards, Reece
hang back ! Finish the degree as Aus-Study will be affected if you claim negative gearing as the income loss is deemed as income by centrelink. Check with Centre-Link first. You have no guarantee that you will gain employment when you graduate.
Hello Reece,
I owned my own business and all of my money was tied up in it. Being self employed and without a lot of value in my plant and equipment, I had little income to show and little equity. As I couldn't borrow enough to buy a house, I looked at vacant land in the areas next to ones that had already had increases in value. My first property purchase was a vacant block for 27k. I spent about a month doing my homework and looked at dozens of others. About 4 months after settling on my block, the land next to it, a smaller block than mine sold for 45k. I got mine valued and was able to use the equity to buy another block in another area for 30k. (this was 2003) I sold the second block after one year (which halved the capital gains tax), for 70k.This is more speculation than investment but that is not the point here. There are many books written on property investment and many hours have been spent developing streamlined strategies on maximising weath creation and minimising tax. I don't stick to a regimented strategy but gain experience from others and adapt it to my lifestyle. I sold the first block last year for 120k. I pay tax and stamp duty but how else will we have roads, schools , hospitals etc ? Admittedly both of these blocks are worth more now but they served their purpose and I like having some spending money sometimes, cashing in and moving to the next pre boom area.
We used the equity in the blocks to buy a home and have since used the equity in that to buy several investment properties. I have other blocks which have doubled in value over the last two years and will be selling them soon to fund some renovations at home and maybe have a holiday.
I am not saying all vacant land is going to be good buying but it may be a consideration if you want to get a foothold in property and don't need any tax deductions,yet.
You say you lack confidence, this will come with learning, just be careful and do your research well. If a deal seems too good to be true , it probably is.
You must be keen doing a double major and still finding the time to read about property. I hope this helps and keep reading the forums, there is a lot of experience on this site.
All the best,
Jeffthanks for your replies. The idea about buying land as it is a cheaper way to start off is a geat idea! I know some places where there are properties that are being semolished and subdivided. There is vacant land for sale in the area so I think i'll look into that and see how it goes.
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