- So we've finally decided to take the plunge and invest in residential property. How hard can it be? Find a house, get a tenant, and you're up and running! Yep, we thought it was that easy, and maybe it is, but now we've arrived at crunch time, the "what-ifs" are kicking in big time. Perhaps all is not as easy as it seems!We come from a world where it's important to buy a house that has it all….an extra bathroom or two, lots of living space, a double garage with a carport and space for the family boat, ducted heating, cooling, etc…..you get the ideal…the ideal family home. We've found several houses that "look great", but as family homes, not necessarily as investment properties. And on the flip-side, we've found what we think are great investment properties…the head says yes, but the heart says "whoa, slow down there…., that's not the house for you." Of course the reality is, our investment property is not for our family to live in, it's for our family to benefit from, but drawing that distinction when faced with a "life-changing" decision is proving a little difficult.Being first time investments, I suspect there is an element of fear and unknown attached to the first property purchase for most people. What do we need to watch out for? What are the mistakes that "first-timers" often make? It's true that you do learn from your mistakes, but not sure we are prepared to fork out our life savings in search of a good lesson. So, to help alleviate all the fears, and the what-ifs, should we bite the bullet and go with a Buyers Service? We are certainly not too lazy to do our own leg work in search of a property, but with no investing experience, would using a Buyers Service potentially help us avoid some costly errors?We'd love to hear from others about their first time purchases? Do it all go well? Would you do things very differently next time? Do you think a Buyers Service would have helped, or made things easier?Look forward to any feedback/advice. Cheers
Hi There,
Sounds to me like you are investing without being really sure what it is you want to achieve?
My husband and i just bought our first investment in a 'not so nice' area which pays itself off and we dont have to put a cent into it. Its our first Ip and it has not caused us one bit of stress because we have reached out goal of having a IP that pays itself off. Thats all we wanted for our first attempt and we got it. Yes it took us 6 months to jump in and do it but that is because we researched until we couldnt research anymore and we went over our monthly internet usage allowance. Sounds to me like you may also be a little worried about reputation and if you are asked at a dinner party where your investment property is, you want to be able to rattle off blue chip suburbs…. i have been asked many times why i invested in Mt Druitt and simply explain to people that my investing goals are for my properties to pay themselves off and i will eventually live off the income… my goals are not to buy a property in the place i want to retire in, which is Port Macquarie. Yes it would be lovely to say i own a beach front property in port macquarie but i dont want to own a property in a town where vacancy rates are still a little high for my liking and it will cost me a fortune to maintain.
It is important to be happy with your own house and this is the one you should be proud of that has all your mod cons. I have the same… a 4 bedder, 2 bathroom, spa, pool, big block etc. But my investment property and subsequent properties are a wealth creation tool not a thing to gloat about at a dinner party..
Hope i have helped.
Amanda
P.S Read Margaret Lomas' book – 20 must ask questions for a property investor. I used this book to purchase my first property. You do not need to spend thousands on a buyers agency when this book cost $20…..
P.P.S: just do it!
Thanks Amanda, certainly appreciate the feedback. The dinner party scenario is no issue for us. Our only goal is to secure our future, but to not make too many "big" mistakes along the way, so just looking to hear experiences from other first time investors. All our research tells us to go exactly the same way you have, and that is the direction we'll be going. I guess our main question at this point is whether to go it alone, or jump in with a Buyer service. Thanks again., WarrenDon't be afraid! I reckon you need to be more afraid of NOT investing. If you retire on your superannuation as your only source of income, you could be in for a rude shock. Best to take control of at least a portion of your retirement income.
Where are you located? People might be able to help point you to some suitable suburbs or dwelling types to help you get started with your hunt.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
A few factors to consider:
- the house/units that you buy are not necessarily the ones that you would like to live in (don't go for one with all the whistles and bells because you would like to have them, they are maintenance issues)
- the property should have all the locational factors that are considered important – ie position position position etc (close to shops, schools, unis, hospitals, govt services, transport, employment, roads etc)
- there are just as many types of owner-occupiers as there are tenants (probably a few more types of tenants) however it comes down to tenant selection as to whether they will match the property that they rent (regardless of whether it is a high or low budget property)
- don't get emotionally involved in the property selection (easier said than done) – for novices it may pay for you to use or at least talk to a buyer's agent and run through the issues like 'how do I know what I should buy?'
goldies wrote:P.S Read Margaret Lomas' book – 20 must ask questions for a property investor. I used this book to purchase my first property. You do not need to spend thousands on a buyers agency when this book cost $20…..P.P.S: just do it!
I agree with Amanda. Grab that book…and a few others. Keep reading/learning (books and forums like this are a great place). Also, get some professionals on your side that understand your goals and property investing – accountant, broker, ect.
I also agree with the "just do it" quote – please don't sue me nike. While it's important to build up your knowledge – it's useless if you don't act upon it. There will come a time when you just have to make the plunge. It gets much easier after the first.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hello again wblack <moderator: delete advertising>. There are lots of positives and a couple of concerns when buying an IP. The positives always out weigh the concerns, but just get the concerns answered. The biggest concern is 'will I rent the property out'? Yes you will even if it I below what you want, the property is rent-able Regards
Finally….today we took the plunge and signed up to our first investment property! Thanks to everyone for their feedback on this discussion and other discussions we've posted, and for the forum overall…..the advice has been invaluable just to get us this far…
Woo hoo!!!!!! Well done! You are on the ladder and now you shall prosper
Don't discuss it with those not interested in investing. They'll say all sorts of things to make you doubt yourself. Remember how much research you have done to assure yourself that it is a good idea, and talk to such folk about other topics such as cinema. Don't let them mess with your confident investing mind Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
wblack wrote:Finally….today we took the plunge and signed up to our first investment property! Thanks to everyone for their feedback on this discussion and other discussions we've posted, and for the forum overall…..the advice has been invaluable just to get us this far…Congratulations.
OK do tell. How did you overcome your fears? Did you use a buyers agent? I'd love to hear your processes that helped you decide this was the one.
Before you said you'd bought I was going to say look at the numbers. That's what counts with IP's. Friends say "I wouldn't buy anything I wouldn't live in myself" which is why they own nothing.
wblack wrote:Finally….today we took the plunge and signed up to our first investment property! Thanks to everyone for their feedback on this discussion and other discussions we've posted, and for the forum overall…..the advice has been invaluable just to get us this far…Congrats and all the best! It’s always good to see people acting upon the info/knowledge they develop. Good on you!
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Catalyst wrote:OK do tell. How did you overcome your fears? Did you use a buyers agent? I'd love to hear your processes that helped you decide this was the one.Before you said you'd bought I was going to say look at the numbers. That's what counts with IP's. Friends say "I wouldn't buy anything I wouldn't live in myself" which is why they own nothing.
We certainly don't consider ourselves to be rocket scientists, so there is an element of "wishful thinking" and "here's hoping" built into our purchase decision.We've read all the books and subscribed to all forums, and while the information in most part has been invaluable, a lot of the information, or maybe more so the format in which it was delivered, was a little overwhelming. We sensed it as case of some very important information, surrounded by a lot of less important information, and in most cases, especially with the books, 200 pages of what could have been said in 100 pages. I think at the end of the day, for us at least, we just wanted the facts. The 200 pages may have worked for others, but for us it was at times all too hard. We're not lazy, just not the smartest kids on the block, not in this industry at least.
Having said all that, I have no doubt that we did miss, overlook, or simply not understand a lot of the information that we needed to take it. Again, we are not rocket scientists, just a couple looking for invest in property and invest wisely. So, how did we arrive at our final decision to jump on the IP bandwagon?
What we did get from all our research were some common threads that seemed to sit well in the scheme of things. They keep appearing over and over, in one form or another. Keeping in mind it has always been our intention to purchase existing residential property, they were:
– Buy a property that won't stress our finances too harshly if things go wrong.
– Look at property with no, or very minimal, immediate and foreseeable maintenance requirements.– Look for a strong demand in the local rental market.– Look for properties that would deliver us an immediate, or sooner rather than laster, positive cash-flow.
– Ideally find somewhere already tenanted.
– Look for good depreciation returns.Initially, we had made the decision not to limit our searching to areas we knew, but as first-time investors, that scenario wasn't sitting well with us as we started to venture outside our comfort zone. In the end we did buy in an area we know, but who's to say that area isn't a prime location…it might just be the next boom town???The property we finally settled on only failed in one of criteria we set. It is currently owner-occupied, but we have no concerns about sourcing a good tenant for it, they will be the easy part.So, that's us done, or should that be just starting out. Our aim is to get this little number under our belt and use it as a spring board to future investments. We are very comfortable with the commitment we've taken on, and looking back to our early days of researching the investment property scene, one of the most overwhelming aspects of it all was the constant suggestion that you needed to own three dozen properties to be financially successful. There may be an element of truth in that, but the biggest truth is you still have to, at some point, buy your first property, and now we've done that. The rest may follow….and we hope it does.
Again, a big big thank you to everyone that has ever contributed to this forum, and in particular those that took the time to address our concerns directly. WOW!P.S. We did our own ground work. Decided against a Buyer's Service for this one……
Are you buying it on an interest only loan with offset account?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
No.
Have a read of this…
https://www.propertyinvesting.com/forums/property-investing/help-needed/4335307
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Don't discuss it with those not interested in investing. They'll say all sorts of things to make you doubt yourself. Remember how much research you have done to assure yourself that it is a good idea, and talk to such folk about other topics such as cinema. Don't let them mess with your confident investing mind 
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