I have been wanting to invest in property for a while now however I am still at university and so currently do not have a stable income. I would love to buy property within the next five years however I do not know if this is possible. Does anyone have any tips of how I can work towards my goal, anything I should read? I would really love to start trying to get ahead of the game, even at a young age!
Hello Skyes
Because your dont have a steady income the best thing you can do is save.. save as much as you can.. start researching areas that you want to invest in.. close to transport, shops ..etc
I started purchasing one bedroom units as they are no so expensive to maintain and there is not much wear and tear.. good rental return .. and so far good tenants ..Magazines that I read are Your Investment Property Magazine as it tells you which areas are preforming well.
Good Luck
It can be done – if you are committed to it.
I have 19 yr old niece who has just put an offer on a block of land in one of Perth's northern suburbs. She has been employed for just over 12 months and is on $35K. Her brother is still at uni and has his own 2bedroom apartment in another suburb closer to Perth.
The nephew got a kick along with the FHOG boost scheme while the neice received a $7K and stamp duty allowance.
Both are hard working industrious types and have been educated and guided by their parents very well indeed. THeir parents are prepared to guarantee/lend some funds to help the two kids get started but it must be said in both cases the kids saved their deposits through hard work and some successful short term investing in property developments.
Makes me look at what we are doing with our two kids.
I’m young too and I research heaps of books about property investing. Join forums as youve done
And talk to people in your area that are experienced. Get to know your area it’s not to early to start looking at houses. Start getting an idea for value for money so when you are ready you know what ya lookin for. Don’t be worried about asking a stupid question Cas one day well be the ones helping young people.Jake
Hi Skyes,
Reading, getting informed, asking questions, all these are all groundwork. These activities are an “investment” in itself. Knowledge is power, they say. And, it’s true.
It doesn’t matter if all you’ve managed to save is $5K, that is still 5% deposit on a $100K property. So, that’s really big. There is no get rich quick formula unfortunately. It is a slow build up, very unromantic.
It is a hard slog, indeed. But if the Bureau of Statistics is to be believed, nearly 50% of all investment properties are owned by people who make $40K a year. That’s telling you something, eh.
There are many people out there who have nest eggs of bricks and mortar who aren’t big earners. In fact, the big earners are mostly just big spenders. I have tenants who make three more in salary than I ever did. Their income, oh, I only dreamed about.
Slog away. Battle on, and research, research, research. Dream, dream, dream. Do, do do.
All things are possible to those who believe.
Angel
although i may be in a different situation to you, buying property while at uni isnt as hard as most people think. i am currently at uni, studying mechanical engineering an commerce and so far I have had ridiculus contact hours compared to many of my friends. I have regularly had 25 ish contact hours compared to the 12 that my friends have. however, as others have stated here, the key to getting yout first house is to save up for a deposit.
i bought my first property in an outer suburb in melbourne in june last year, and had settlement in around november. the house is set to be finished builing in the next month. i already have tennants linned up, and will be getting $100 more than the average rent for the area. although i have been quite fortunate in getting the tennants i got, i am unable to use the first home owners grant, and hope to use it on my next property. the property cost around $330,000, and i expect it to be worth around $390,000 once built. I do not intend on selling it untill the tennant leaves, and the area has had the next stage of developments ie. the shopping centre that is to be built 2 streets away.
anyway, to get a large enough deposit, my thought process was that if i could save $200 a week, i would have saved $10,000 for the year. while i realise you may not be in a position to save that much per week, it would be wise to set a terget for where you wish to be in 5 years, and work your way back from there. ie. if you want to have 25k saved, you need to save 5k per year which is about 100 per week.
also, try to cut back on unneccessary spending, ie buying take out when you could make yourself lunch/dinner. or catch the train to uni instead of driving, or buy second hand text booxs instead of new ones. another thing that i did was keeping a money box. whenever i went out on saturday night and came home with heaps of coins, i would put it in the money box. or if i bought something, and had a few dollars change, id put it in the money box. this stopped me on spending it one something rubbish likc a chocolate bar while i was at work, and when i opened the money box last week, turns out i had a little over $1000 sitting in there…it all addds up.
however, the best piece of advice is to just continue learning. read books and go to free seminars. even borrow books from the library, that way you dont need to pay for them. hopefully it is not long before your on your way to buying your first house.
Thanks Matt,
I'm assuming you bought the house using a loan. How did you qualify if you are still studying and not in a full time job? I would have thought it would have been difficult to get approval as a uni student?
S
Hi Skyes,
Good on you for being proactive. I bought my first property immediately after graduating from uni and before I even started my graduate job so it's definitely achievable. Here are my steps:
1. Worked my bum off during uni to save up a reasonable deposit. Part time jobs, internships, scholarships etc. It's not easy, but it's possible.
2. After finishing uni, found a full-time job with a steady income. You don't necessary need to work there for an extended period of time but you'll need to show the bank your employment contract. The bank needs to get comfortable that you can pay off your mortgage
3. Obtained preapproval – go to a mortgage broker or talk to as many banks as possible. Take advantage of the first home owners grant!
4. Ask you parents / family for a guarantee if possible if you're short on your deposit
5. Search for properties that you can realistically afford. Use a free online property investment calculator to do the maths. Never pay more than you can afford so this is probably the most critical step
6. Spend a lot of time talking to real estate agents for areas that you want to invest in to ensure you're front of mind when they have a new property to sell. Although historical prices are no reflection of future prices, generally speaking, property prices don't inflate as quickly as shares. If you find an area that is affordable, chances are, property will come to market sooner than laterGood luck and let me know if you need a hand.
JaseHey matt are you sure you can get your FHOG on your second house?
Pretty much in the same boat aswell. Im still at uni, but saving what i can from my part-time job, and in the mean time learning as much as i can and doing lots of reading.
Jake H, Matt can still get the FHOG as he hasnt lived in his investment property. This is something i have considered, buying an IP first then buying my own home later. However im still up in the air about it as of yet, as the FHOG aswell as other benefits would be mighty useful.
Skyes,
Yes you are correct, i did find it extremely difficult to get a loan and in the end i was unsuccessful. I was fortunate to have my parents help me out by borrowing against their porperties. However, although the loan is 'theirs' they do not contribute anything to the loan and the onus is on my to pay the house off. While this was not my preferred option, it was better than not buying a house IMO. However, in saying that, I have two friends that have bought houses while at uni, and had no problems sourcing a loan. Although I am unsure of the details of the loan (one of them had his parents guarantee his loan) it goes to show that its not IMPOSSIBLE to source a loan.
Jake H,
Scotty89 is correct in saying that I am still eligible because I haven't lived in it. I have listed this house as an investment property which still means that I am eligible. Obviously there are some risks/negatives associated with this. For example, the government might decide to scrap of lower the FHOG in the comming months, therefore i missed out on X dollars. Another negative is that when I go to sell my property I have to pay capital gains tax, whereas it i could have avoided it if i didnt have another house listed as my PPOR for 5 (is this correct?) years after moving out after my initial 6 months of living in the house.
However, the biggest factor for my not going down that path was affordability. Because I am still a uni student, i am by no means on big money, and moving out of home for 6 months would have meant that i would have to fork out $500 a week to go towards my loan, and then any living expenses on top of that ie. groceries, feul, bills etc. This meant that I would have required at least $800 per week just to get by. further, i would have missed out on my chance to get the above average rent as the tennant would have gone elsewhere and there would have been no chance of me getting anywhere near that rent from someone else. basically you have to weigh up the pros and the cons to how you wish to use your FHOG and remember that ivesting isnt supposed to put a financial strain/burdon on you and your family, instead its supposed to assist with becoming more financially independant.
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