Greetings, I am a 23 year old university student, in my first year of PhD research.
I have studied up on property investing, reading a few books, and scouring through various forums and topics, and am very keen to break into the property market.
However, I am unsure whether it is the right time to begin aqcuiring assets, or it would be dangerous for me to do so in my current position.As I am a university student, I have very little income other than the scholarship I am currently on. This is enough to cover my living expenses, and put away about $500 per month in savings.
I do not have any prior savings, therefore do not have any starting capital to begin investing on my own terms, meaning I would have to borrow 100-110% of the sale price of a house, attracting mortgage insurance and a 'high risk' label.With the interest rate low, I am keen to invest in an initial property, which will provide a positive cashflow, or at least positive equity building. In fact, it is uninportant for me at this stage to be earning profits from anything I invest in, but I would rather build up my equity and asset collection for when I do get full time employment after completing my doctorate in 2 1/2 years.
Generally, is there any advice on my position? Is it worth looking into the property market, or too high risk for me?
I do enjoy a challenge, and I am a fast learner who is willing to put in the hours to manage such an investment, and really dont want to wait until I am 30 to invest.. the earlier I start building my portfolio, the better!Please help!
Thankyou,
JarrodSounds like it will be hard.
the 110% loans are gone, and the 100% loans are almost gone too. There is one (maybe more??) still left, but you will need a good work history and income to qualify.
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Have you looked at FHOG?
You may want to consider the bottom end of the market somewhere 1 or 2 br units under the 100K mark.
Save for the next 6 months and you have 3K. Do your studies allow you enough time to find pt work to add to the 3K.
2.5 years later could have paid off at least 15K.
Other options could be borrowing from a family member to put a deposit down or even going joint partners.Hi Jarod,
When we bought our first home (3bd townhouse for $85K), my other half was also doing a PhD and on a scholarship. i would strongly suggest that without the additional support of an income that you continue with your research and continue to save. Try not to put yourself in the position where you need to supplement your scholarship and as a consequence do less on your PhD. Trust me, I have seen many who take on extra paid work only to see their PhD timeframes blow out. Personally, I believe the quicker you get it done and then secure full time work the better position you will be in to buy property.
Now that said, there is no reason why you cant be creative without being the owner. Lets say you were able to rent a property suitable for student accomodation with say 4 or 5 bedrooms. Pick up a some second hand beds and desks and then rent out to students by the room. You would always maintain control as it is your living space as well. If you look into it you may be able to subsdise you living expenses and save faster.
Worth a thought
Mick
Thankyou for your thoughts and advice so far…
I am definitely keen to finish my PhD within the shortest time frame. Comprimising my studies by working part time is really not an option. I am legally allowed to work part time for a total of 8 hours per week around my research, but have been advised not to, on the account that this would take time away from my research, and possibly prolong my course by an extra year.
A partnership is definitely an option, whereby a partner provides the initial deposit, and under a tight contract, receives a higher percentage of any cashflow, until the initial deposit is payed back. I have interested parties, and some time outside of university to manage either renovations or a rental property.
Another option considered would definitely be using my partners savings to place a deposit on a three bedroom house or unit, and covering the loan repayments with tenants for the 2nd and 3rd bedrooms. This would allow for security with a full time income (partners), and the accumulation of the asset/equity (owned property – loan), whilst the cost of living for myself would only change slightly over the next few years, until I could contribute – once my course has been completed and a full time job found.
Any further advice would be much appreciated…
Thankyou
JarrodHi Jarrod
My Partner and I are both 21 years old and have recently brought a block of land valued at $135,000 and are planning to build early next year.
The main thing you have to aim for is the dollars that have to come out of you pocket. First things first the bank will only loan you 95% of the total price needed, so you will have to save the 5%, also you have to have enough borrowing power before they will touch you and hopefully that is enough for what you need.
Also out of your pocket is the stamp duty, transfer title fees and the mortgage fees. The costs of these all change whether you are buying established or planning to build.
But make sure you also can afford the reapyments because interest rates are coming down at the moment but after that the only way is up and it would not be very nice if you lost you property.Overall the think its an excellent idea to buy as young as you can afford it because its only going to get harder. But also remember there are always hidden costs involved so do you research.
Hope I helped
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