Oh, BTW, I guess we are slightly above average wage earners, with Mrs ummester on 30odd k part time and me on 80odd k (with OT, acting, and promotional bonuses occurring regularly) but even our comfortable income isn't enough to comfortably buy property in Aus ATM.
Ummester are you an actor? Lovely if so.
You would be having a great day on the share market today then? I know I am!
It is all about diversification. Money into property for long term, money into shares for short term, gold to hedge against a meltdown.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeDWolfe wrote:Ummester are you an actor? Lovely if so.<moderator: delete language>
DWolfe wrote:You would be having a great day on the share market today then? I know I am!Can't be bothered today, too hard to concentrate ATM. I am off work and financial tinkering for a while, <moderator: delete language>
DWolfe wrote:It is all about diversification. Money into property for long term, money into shares for short term, gold to hedge against a meltdown.D
Can't argue with that. Seems like a worthy financial plan.
Wow, guess I took acting and promotional the wrong way!
Gee sorry about that.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeHi Wynyard,
You mentioned you're only earning $25k per annum. I'm not surprised you're struggling to service a mortgage.
I wouldn't be afraid of renting for the near future while continuing to invest spare capital in other avenues until your income increases to a level where you can service a home loan. You shouldn't be earning $25k forever. I think most people with a bit of "get up and go" have the capacity to earn at least $50k.
I used to feel the same way as you when I was in a job paying $32k and 24 years old. I'm now 29, in sales and earn between $150k and $200k per year. You sound like an inteligent person, once you finish your degree you'll probably be able to find a job with potential for growth. I know there's a bit of a labour shortage at the moment.
Think long term.
Thanks,
Doogs
Post deleted, misread OP's financial status.
Qlds007 wrote:If you are prepared to give up some of the potential capital growth a shared equity scheme could be an option.Max lvr is 90% so you would to have a deposit but we are starting to see more and more of these loans evolve.
You might take out a 90% lvr and you make repayments on say 70% with 20% being interest and repayment free.
The lender then takes 40% of the capital growth.Either a way of buying what you want and reducing your repayments or being able to set you repayment and affording something in a higher price bracket than you expected.
Hi Richard,
Thanks for your reply, I kind of glossed over over it back when I should have paid more attention. I have become more familiar with some of the lingo, so this sounds interesting. I have $20K deposit, just not a huge income. Who are doing these sort of loans? Any further insight into how it works? Is the bank taking 40% of CG a bit much, or you think ok?
Cheers,
WHi Wynard
Yes lender would look to take 40% of the capital growth.
Personally i would think when you are getting into a property that maybe better than would be if you had to support the total loan then giving up some of the capital gain isnt a bad thing at all.
A percentage of something is a lot better than 100% of nothing.Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Wynyard, the best foot forward onto the property ladder is the first one taken.
Did you know it is STILL possible to purchase property under 100k ?
Did you realise that getting in on something .. is always a start?
Did you realise that you can offset any capital gains as income for the year?
Did you realise that despite difficult finance circumstances its still possible to get workable property solutions that will only cost you under $100 a week to run?so, including Stamp Duty (under 4k on a 100k property) its possible for you to have your money working better .. earning more .. and you getting richer sooner.
the minute you stop feeling inadequate, stop making excuses, and start driving your own property wagon is the moment you will start getting rich.
Thanks to you both, I'm liking this. You are right Richard. If I stay in a decent place I could not have otherwise afforded till I die, and the bank takes 40% of the sold value, who cares! I go through many periods of excitement and thinking I can do this, so far I haven't nailed anything down, but I am keen to.
I have just posted a scenario over here, I wonder if either of you would offer a few thoughts?:
https://www.propertyinvesting.com/forums/property-investing/creative-investing/4335463Hi Wynyard
You have created a very interesting post.
With regards to your future employment, you could look at working remote for your city based employer from home.
If all you will eventually need is a computer and a PC based phone or mobile phone you can relocate to anywhere in Australia and still earn a decent income. And you can save on childcare at the same time.
I live in a rural town and work remotely. It has saved us so much on childcare and it works well for us.
Regards
MarmelWynyard, I tried dropping you a private message but found you were not accepting any of those. I noticed that you wanted to go coastal eventually and from what I understand, you can get a loan of $350K and have around $25K of savings? If this is the case, be very careful about taking the full loan of $350K from the bank, even if they're happy to approve that amount for you. If you buy a house with a loan at this level you would probably also be looking at lender's mortgage insurance, which you wouldn't be able to recoup in the immediate future, at least until you sell the house, I believe. Have you tried looking for a mortgage broker to help with your choice of loans? I have a contact, if you're interested.
I assume you're living in or around Melbourne at the moment and would rather buy than rent? Have you considered any of the suburbs around Geelong? For example, there's North Geelong (median price $273K) and Norlane (median price $189K). In the latter case, there are definitely 3 bedroom houses on the market for under $200K or just a little bit more. Look for something near the train station, so that you can easily catch a train to the city if you're working in that area.
These might not be the prettiest suburbs of coastal Geelong, however they're not all that far from Geelong 'CBD', where you might also be able to find a job. Both suburbs have recorded an average of 10% growth per annum over the last decade, so you wouldn't be buying an absolute dump that doesn't appreciate in price over the years. Of course, to 'escape' from it all, you could always hop back on the train down towards Geelong itself and then have picnics or walks along the beach. If you're the coastal sort of person, this would be very invigorating. I lived in a landlocked suburb myself but thoroughly enjoy driving for more than an hour and a half down to Geelong's waterfront. The sea just makes me feel alive and the atmosphere there is just magnificent. There's also St Helens park and Rippleside Park that you could visit, which are even nearer to Norlane/ North Geelong.
If you borrow say, the full $200K and get a fixed rate of 7% interest-only payments for 3 years (which you can get at ANZ for example), your loan repayments per year would be roughly $14000. Would this level of loan repayments be affordable for your family? Also, when buying any property, leave a buffer of about 6% of the purchase price for other closing costs such as stamp duty, conveyancing, pest/ building inspection etc. The reason why I suggest a fixed loan is because rates are likely to go higher in no time at all, and 7% is not dramatically higher than the 6.88% you were offered by CBA. Bear in mind that you might also quality for first home owner's grant of $7K…not sure if it's any more if you buy existing regional properties but check it out.
Moreover, if you're going to be sensitive to rate rises, better to fix and be able to sleep better at night. The drawback is that you won't have an offset account with a fixed rate and any spare cash you do have left over would then accrue interest that is then taxable.
Another key issue is that a Uni degree is NOT always a plus point for employment. It may open up some avenues for employment but with the major HECS debt, that can be a bit of a setback. Would HECS debt affect how much you can borrow and put added pressure on your loan repayments? People here who work in the trades who do very well and you don't need a Uni degree for that.
On the other hand, there are people like my colleagues who spend 5 years in Uni doing an expensive course (a la veterinary science), wind up with a massive HECS debt, and then start on a wage of less than $40K per annum in a stressful job (with high suicide rates) that doesn't even pay an amount commiserate with the level of skill expected. I'm not encouraging you to drop out of Uni, but if you can find something more lucrative that you enjoy doing, and can get the job without a degree, then just do it.
I congratulate you on taking steps to look for your first home.
PS: And oh, one last thing. Can you find a close, like-minded friend (from Uni or otherwise) who would be interested in buying a similar priced house to yours and live in roughly the same area? Then you each buy a house, and rent out to each other (that is you live in his/ her house and he/ she lives in yours). Each of your rents helps your friend pay off their mortgage. If there's any shortfall against costs of running the house, each of you offsets that against your income to get some tax benefits. Have a think about it.
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