Property Investing for Gen Y

There's plenty of good sources of information. I like the early Jan Somers stuff that teaches the basics of investing. Somewhat outdated, but the messages in the book remain relevant today. Forums like this are also a great source of info.

If you haven't already purchased a property, then I'd make that a priority. The first one is often the hardest.

Jamie

G'day Scotty,

Firstly, I'd just like to say welcome to our community!

This is a great place to discuss any issues regarding property investing. Whether you have questions about investment strategies, finances, or legal aspects – this is the place to be! And I'm sure you'll learn quite a lot simply by browsing the forums, and will enjoy your stay here!

Rather than rushing out to buy a property I suggest that you take some time to think about what it is that you ultimately want to achieve from property investing and to invest in your knowledge first. What is your goal? Can you assign a number to it? When do you want to achieve this by? And WHY do you need to achieve this? By being clear on what you want you will then be able to determine what strategy would be best for you, whether it is renovations, buy and holds strategy etc.. Its better to invest a few hundred dollars in your knowledge and advice, than to lose thousands of dollars later down the track.

If you like Steve's books, then you would probably love the 'MasterClass Starter Pack: How to go from 0 to 5 properties', which goes through all the basics you need to know about property investing, from identifying what real estate strategy is best to achieve your financial goals as soon as possible, to financing & accounting, and understanding what drives property prices and how you can ultimately profit from your knowledge.

If you are interested, I can supply you a copy of the MasterClass Starter Pack in excellent condition at a 70% discount i.e. $150 (Postage and handling included)

Regards,

Kong

Scottdog,

Read read read and then read some more.

Grab a copy of API magazine (Australian Property Investor) when you can and read the stories – focus on the real issues – which are sometimes glossed over.

You will need good advice once you get started – find a good tax accountant and a good conveyancing lawyer – ask around places like this for referrals.

As an accountant myself I would say the following are key:

– be patient – take your time, squirrel away the cash until you are ready
– research – 'luck' in property investment is when knowledge meets opportunity
– cash flow is extremely important – you can have all the capital growth in the world but if you can't pay the bills you are stuffed
– numbers don't like – people do

I hope this helps and provides direction.

Hi Scotty,

I would recommend reading lots of books, magazines and forums, this forum has been great for me and I’ve learned a lot or at least it’s prompted me to do further research. I was only 22 when I got my first IP and it’s been the best decision ever, it’s not easy at a young age to get into property and will take hard work but it’s well worth it.

Cheers
Rudra

Hi Stacey,

I agree with the rationale behind not saving the 20% to simply avoid paying mortgage insurance. Your spot on, it will take years to save the 20% deposit – however, you can get into the market sooner with a much lower deposit (possibly 5%). Yes, you'll have to pay some mortgage insurance (which can often be capitalised onto the loan anyway) but you stand the chance of owning a property that's likely to appreciate in value over the next two years.

Just say, in very simplistic terms, that you purchase something for $200k that increased by 10% p.a – and you took out a 95% loan. In this scenerio, you would have paid about $5k in mortgage insurance (which some banks will allow you to capitalise onto the loan) and your property would have increased to around the $240k mark. By using a smaller deposit, paying some mortgage insurance and getting into the market sooner, you've just made $40k in equity….sure beats spending the two years saving the 20% deposit 

This is a very simplistic explanation – but the point is, mortgage insurance allows you to enter the market sooner rather than later and as a borrowing expense, it is deductable over a 5 year period.

Jamie

Congratulations on taking the first steps into Property Investing, Jamie gives great advise in that taking 2years to save 20% deposit when you could have your property being rented, all the time gaining capatial grownth. Mind you some times very small capatial growth. Depending on where you purchase. A great book someone gave me is Smart Borrowers Handbook by Stuart Wemyss. This little book is great easy reading and it wont advise what structure or positive vs negative just the facts. Then go and read as much as you can like Jan Somers, Margaret Lomas, Australian Property Investor's mag etc…
Im not recomending any of these however you can go along to free seminars run by people like The Investor's Club. Defence Housing and not free Property Women etc.. Just try to stay open minded and absorb as much information as possibable, you will mix with like minded people and its amazing at what that can do for you.

Shelley Veale
http://www.empowerwealth.com.au
42 Howard Streeet, North Melbourne VIC 3051 / 03 9326 8900 / 0409508211

Your welcome. Following on from what Shelley said – Margaret Lomas has some really good books. I enjoyed her "20 must ask questions" book.

In fact, a good way to learn on the cheap is to check out the IP books in your library or have a quick search of Ebay every once and a while.

Jamie