hi everyone,
I'm very new to all this, and have only recently found this forum. I've learnt alot in such a short space of time! Anyways, my partner and I are in the process of researching about IP and whether we could afford to buy one. if we do buy one, we were looking at maybe making the purchase around end of this year, early next year. However, I have heard that people are saying that property prices will fall within the next few years, because we are at the end of the cycle.
That has made us abit scared to buy soon. We would hate to buy an IP at the peak of the market, only to see the property prices fall straight after. I guess what i'm asking is whether all you experts out there THINK its a good idea to buy now. Or should we try and save more money and buy in a few years time. The only problem is that we are planning on having kids within the next few years, if we decide to buy an IP then, our buying capacity will go down by alot. We are just unsure on what is the best thing to do?
Any advise would be great appreciated.
Thanks in advance.Hi Wonderland,
It might be good that you spend more time learning about property investing, investor concepts and investing psychology. Many of your fears can be answered when you understand more.
Regarding savings, it is good that you are doing so. You also have to remember that not many can save more than the month appreciation in property prices, so on that note, the sooner you buy the better. However, no point rushing out to buy something you do not really understand.
On property prices, there are different parties saying different things. As long as you do not overpay for a property, you should be fine. You will have to consider the economic factors of your local surrounding. Often, there are markets within a city itself. For example, during the FHOB last year, we bough a property for $375K while everything else similar was going for $410K. Even in bubbling markets, it is still possible to find bargains.
There would also be tax structure to consider. Do you purchase in your own names, only to lose part of the negative gearing benefits when you start a family? Do you purchase in a Family Trust and quarantine your negative gearing for future years, only to slow down your buying ability?
Spend a few more months reading intensively, ask yourself and your partner some tough questions, and the answers will come eventually.
Regards,
Daniel Lee
Ditto what Daniel said. Education defeats fear and ignorance every time, so spend a bit of time and money reading like mad and you'll find that when everyone else is ducking for cover, there will always be a few out there smelling the roses
Hi guys, thank you so much for your advice.
Daniel, where do you suggest that i could go to learn about these 'property investing, investor concepts and investing psychology'? Should I read some books? If so, which books do you recommend? I dont know where I should go to learn about all these investing knowhows. Or do you suggest that i seek a financial planner?
I have heard that if you are on maternity leave, you are unable to do negative gearing. Do you know why that is, or can you give me any info to start my research?
thanks again everyone.
Anyone got any suggestions of good books or which website is good for getting more knowledge of the property investment game?
thanksHi Wonderland, you talk about the end of a cycle but I don't see where you wish to buy. Different states are in different stages of "the cycle". Where are you considering?
Agree with getting knowledge. Many people jump in and buy without knowing about why they want to buy property.
If your income is going to be reduced possibly buy something that has a good yield to minimise out of pocket expenses.
Hi Catalyst, thanks for your advice. I am looking to buy in Melbourne. Also, do you know any good books or websites to get more information on property investment? Or should I see a financial planner for information?
cheers.
Hi all,
This is a link to a current thread re books to read https://www.propertyinvesting.com/forums/property-investing/general-property/4333118
Hope this helps.
Andrewitsandrew
Go as far as you can see and you will see further.
margaret Lomas has some good books that offer advice relevant to australia.
now is a great time to buy an investment. There is little competition and the markets are taking a breather, The only better time was just afte the GFC. I was the only one at many auctions making the bidding process quite easy.
I heard that the market is steady at the moment. I'm just worried that if i buy now, and property starts to get cheaper later on in the year, i'll be kicking myself!
Thanks for your advice.
Also, how can i find out what yield the property has? What percentage is considered 'good'?
thanks.you can find the property yield for suburbs in most of the Property Investing magazines like Australian Property Investor. You can also do a calculation yourself on a property you are looking at:
weekly rent x 52 divided by purchase price x 100.
Remember higher yield can mean lower capital growth. You can find very high yields in outer suburbs or regional areas. Personally i stay away from these areas and invest where people want to live -close to work and infrastructure.
Buy what you can afford, when you can afford it and where you can afford it.
One expensive property that has a poor yield may stop you in your tracks.
I believe in balance. That way you can keep buying.Also buying under value is they key. Get it revalued and use the equity to buy the next one. But serviceability is paramount. That's why I love CF+ deals.
Sorry I don't know much about the Melbourne market. Look at http://www.somersoft.com/forums/
Lots of useful info.
Now may be a great time. I bought a year or so ago against what the majority of the population was doing. The crunch didnt happen and i ended up with a positive geared property in cbd location that i am now subdividing. End result will be $100,000 equity and a positive geared IP. As is the property has gained over $50,000. So the gloom patch was good for me. What will happen next? who knows. We may finally get a crash.We may flatline for 5 years. This is up to your risk tolerance and cashflow. If you can ride any crash out and come out the otherside OK then i dont see why a well selected property bought now would not be a good move.
wonderland wrote:I heard that the market is steady at the moment. I'm just worried that if i buy now, and property starts to get cheaper later on in the year, i'll be kicking myself!Thanks for your advice.
Like others have been saying education is number one, you need to know what your buying and why. My piece of advise is that you need to look at property investing as a long term investment not short term, Property will fluctuate from time to time but I don't see it dropping substantially, there is still way to much demand and not enough supply in the right areas provided you do your homework.
My two bobs worth
cheers
reggie5005 wrote:wonderland wrote:I heard that the market is steady at the moment. I'm just worried that if i buy now, and property starts to get cheaper later on in the year, i'll be kicking myself!Thanks for your advice.
Like others have been saying education is number one, you need to know what your buying and why. My piece of advise is that you need to look at property investing as a long term investment not short term, Property will fluctuate from time to time but I don't see it dropping substantially, there is still way to much demand and not enough supply in the right areas provided you do your homework.
My two bobs worth
cheers
Yes. And i also believe it is best to acquire properties not buy and sell. There is just too many hands in your pocket such as CGT stamp duty ect when you buy and sell real estate. Buy and hold for the long term. You not buying the market, but time in the market.
Thanks guys so much for the advice. I aim is to buy and hold long term. I would prefer that to buy and sell, too much tax and headaches.
I am in the position to buy one now if i wanted to, but cant really spend as much money. I would like to preferably buy a house unit as apposed to apartments because I like the thought of land. I would assume that land would have great capital growth, and also i wouldnt have to pay for body corporate each year.
When you say outter suburbs, where do you mean? I live in south eastern suburbs atm, are you saying that its not wise to buy around here. Should i buy closer to city fringe?
Thanks for all your help?
Hi Wonderland,
If when you have your family, there will be less family income, definitely better to buy an IP before then. (Bank may not want to lend.)
6% is often seen as a good return on investment in a capital city. More often found in 'average' areas and at lower prices.
But then again, maybe less capital growth expected. But more affordable when your income drops.Waiting for the ideal time or property leads to never buying. And if you're not in the market, you can't profit from it.
quickchick
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