Hi everyoneThis is my first post, I have been on the forum a little while now just reading and reading, trying to educate myself. I have been watching lots of Youtube videos on property investment also. I haven't read any books yet, but plan to soon.I am currently 23 and still living at home, not paying any rent or board and have never had any loans. I have a savings of around $1500-1550 a fortnight. I currently have a first home saver account which I cannot use until July 2013 for my first home to live in, I currently have 10k in there and have 10k in another account which I am saving to use for an investment property. I plan to continue putting money in the first home saver, but because I cannot use this until July 2013 I'm planning to buy an investment property or two while I still live at home to get a bit of a head start.Now I was thinking I could get an interest only loan for the investment property and cover most of the repayments with rent payments, while I continue to put as much as I can into my first home saver.orI could only put minimal amounts in my first home saver and focus paying off the investment property which wouldn't be too hard to do living at home and with the amount I could put in each fortnight.The other thing is I don't have to use to home saver account right away, I can stay and am happy to stay at home a little longer then July 2013.What does everyone think?I'm thinking probably continue saving for a home to live in but it's good to hear what other people think is the best strategy for my position.Cheers
I also have a FHSA – it can only be used on your first ever home purchase. If you buy an IP before it matures, you'll have to leave it for super.
Let it mature – buy an IP with it, move in for 6 mths, move back with your folks, then NG the place. That is the only way you can use a FHSA to end up with an IP.
Or, alternatively, if you have seperate savings, use the FHS account to buy a PPOR then combine the equity on it and your other savings to leverage an IP. Then, after you have lived in the PPOR for 6mths, you have the option of having 2 IPs.
I was originally going to do this but I would have to wait till July 2013 before I could do it.
I just had a look at my ME Banks FAQ's for the FHSA and is says: "If you have never lived in the property you purchased as an investment, then you are eligible for a First Home Saver Account." I believe this is the same for the first home owners grant. So I guess as long as I don't live in the property, I should be able to do this without losing my FHSA into super.
I just feel this is a better option to get into property investment now rather then wait another few years for my FHSA to mature. So I could get an IP or two while I continue to put all my savings into my FHSA
Hi Haydos
Welcome to the forum.
Your logic makes sense and I personally feel, in general, that now is a great time to buy (major markets accross the country are either flat or in decline). This might scare people off but I see it as an opportunity.
Once you have that first investment under your belt, you would probably be better served not paying down any of the investment loan if you’re planning on purchase your own home at some point. Ideally you want to preserve your current deductible debt while minimizing non-dedutbile (ie ppor debt).
Best of luck with the investing.
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]
Gday Hados
Congratulations mate on the forward planning and saving so well. I think you have things sorted regarding the accounts and prerequisites regarding both FHSA and the FHOG. I've had experience buying my first residence when I already owned investment properties and was eligible. Check all the details as they pertain to the situation now though.
If you have the deposit funds and can keep the LVR as low as possible, then no problem buying an investment property now. Buy well (area, price, future prospects), buy what you can afford and move forward. Agreed, no need to pay more than required on an investment property so interest only loan and if you've bought well, then the tenants will pay your mortgage and holding costs.
Keep saving and in 2 years reassess your situation. You should be in a position to then buy a principle place of residence, receive the FHOG, have a sizeable deposit to reduce your interest payments as much as possible and rent out the other rooms to friends to help pay your mortgage. Your investment property should also be a positive income producing one by now if it wasnt right from the start.
The key is to keep earning and to increase that (wage) as much as you can and to save while you are young to give yourself the leverage you need to start with.
Best of luck with it – you are certainly doing things right so far.
Ian
http://theblockblog.com
Free Property Investment Information, Tools & Resources for Investors with a Sense of Humour.Seems I stand corrected on this – you can have an IP and a FHSA. You can now also add the FHSA money to a PPOR (when the account matures) if you buy a PPOR before the account matures. You can not add the money to an IP loan, however. It's the FHBs grant (7k or whatever it is now) that can not be used if you own or have owned any residential property.
Good luck on your investment but be sure that you know more about Investment Property especially when you are just a beginner though you can approach a friend or a colleague to get advice, cause it really involves a lot of risk when it comes to financing a property.
Education is a very important aspect of investing. its important to really sit down and learn as much as you can from every angle, then kind of going with what seems to work with people and what seems to be a good deal.
'The more you leave to chance, the more likely it will go wrong'
your spending your lifes earnings in this game, you may as well spend a little on educating yourself, whether thats time or money, to prevent a lot of hurt down the track. and starting younger will serve you alot better later. I, myself, am 19. but im spending my time to learn as much as i can before i consider anything.Those strategies are fair tried and tested ones, but you may find some way to save that little bit more interest, or make that little more money from your property
When it comes to buying a real estate investment property, the first deal is the hardest. I know this from personal experience. I kept talking about buying a rental property for several years until my husband finally took the initiative, found a property, and made me buy it. From a hotel room in Texas, where I was staying on business, I nervously signed a contract and committed myself to buying a “bread and butter” house in Florida. Thanks to rising real estate values, the house has appreciated substantially…leaving me to wish I had bought ten more!
The best deals for you are always in your own backyard. Most of the money lost in first-time real estate deals is lost in somebody else’s backyard. You know your town, your area, what’s going on there, and the good streets from the bad. You’re far less apt to lose money when you know your way around. Property especially when you are just a beginner though you can approach a friend or a colleague to get advice
Hi Haydos
Just wanna give you some insight .When buying investment properties, there are several important factors you need to consider. The challenge in purchasing an investment property is choosing the right type of property to put your money in. More often than not, when you choose the inappropriate type of investment property, it ends in an unhealthy financial risk. Thus, if you want to find and buy investment properties in the most appropriate way, you might need to consider the some guidelines.
All the best
Elea
educatingpropertyinvestors.com
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