- Hi all.
This forum has already been a wealth of information for me and now I would be really grateful for your opinions on my situation. I will be seeking professional advice in the near future, but would like to go in armed with as much of my own knowledge and ideas as possible.I will be receiving an inheritance in the near future of around $230k and currently have growing savings of $20k. This amount of money could really set up my future so I want to make it work for me the best I can. I am a 24 year old first home buyer, single, still living with parents, and would like to purchase a PPOR. My annual income is a smidge over $50k meaning I can service a loan of around $165K. My primary aim is to own my own home, but to also begin to slowly build up an investment portfolio. Unfortunately I can't really draw on family experiences as they have been not so savvy in the road to retirement which is why I want to use this money wisely to begin with.
With my limited knowledge, I think that I have two viable options.
1. Purchase PPOR for under $400k. IO loan with 100% offset (paying what would be the principle payments into here) with view to make this an IP in future.
2. Purchase same PPOR, but with view to keep this as PPOR for a number of years and purchase a new IP in future.As my loan will be relatively small due to putting the inheritance towards it to begin with, should I be aiming for #2 in a few years as this would be a larger loan for tax benefits? If so, should I still structure the PPOR loan in the same way?
Please feel free to point out an option number 3, 4 or 5 for me too
Thanks in advance.
Why do you want your own home (PPOR), guessing at age 24 you want independance?
3. Stay at home & purchase IP with IO loan with 100% offset
(save on rent if you don't pay it, also interest on IP is tax deductable, once you get inheritance put into offset and then your IP should be positive cashflow. Could purchase another IP?)
4. Rent a house & purchase IP with IO loan with 100% offset
(Pay rent, might not be able to get IP loan until inheritence due to paying alot of rent, interest on IP is tax deductable though)
5. Rent with friends or rent room & purchase IP with IO loan with 100% offset
(Pay small amount of rent, should be able to get IP loan, interest on IP is tax deductable though, part freedom)
6. Purchase PPOR with first home owners grant IO loan with 100% offset. No stamp duty!
(Live in for 6 months then turn into IP)
(Live in and rent rooms out)
(Live in then purchase a IP)With PPOR the interest is not tax deductable except if you rent out rooms which is part deductable I believe? (Check ATO website)
If you have a PPOR and IP put all your money into the 100% offset account of your PPOR and you will then be able to claim more interest on your IP while paying less interest on your PPOR.Don't jump into anything if your not 100% sure or if someone tells you to. Your not in a rush so research research research!
I'd suggest educating yourself first, then you will have the confidence to make an informed decision by yourself. If you are interested in doing some courses, check out what people have to say on these forums. Steve has just launched his new Apprenticeship which is a cert IV course and will give you a good grounding. I've done a few courses and can say don't be in a rush to part with your cash, you may regret it very soon after!
Educate yourself, as you'll have that for life, but choose courses that are appropriate to you and what you want to achieve. Above all, beware taking advice from anyone without qualifications or experience, or who stands to profit from the idea they are suggesting to you! Family are lovely, but you've mentioned they don't have much experience in investing so I'd suggest surrounding yourself with people who are savvy and will help you. Forums are nice, but I'd suggest finding someone to help you in the long run. From the courses I've done, I'd suggest RESULTS for the one on one support and mentoring, otherwise if you just want education without personal guidance, look into the property apprenticeship from this site – I'm not sure if it's closed now so call the office perhaps?Best wishes for you and your decisions ahead.
CanberraClaire | Capital Buyers Agency
http://www.capitalbuyersagency.com.au
Email Me | Phone MeExclusively for property buyers
naisy, as a regular investor and multiple property owner .. what if i told you there was no correct answer?
Except there is.
As an inheritance .. it'll be your money. That means you can spend it all on golfing equipment .. pornstar escorts and fancy sportscars if you wanted to. You realise .. as far as you are concerned .. that you want it to being doing more for you. And thats a hell of a start towards thinking right for yourself. Coming from a background where apparently no-one else has done this .. is a hell of an achievement.
As listed above with Pazza .. the primer is a solid education. I can tell you 100 ways to invest .. and have things working for you. Without a proper primer in both managing .. negotiating .. and buying and selling .. your chances of carrying the investment to success remain minimal. Thats the real key. Not the investing .. any fool can toss money at an enterprise. Its knowing what to do AFTER you've tossed the money .. that will make you rich.
Books .. property magazines … and getting an idea of how things work. Thats your starter kit. Go to open houses .. ask questions .. go to tiling and bathroom places … get the knowledge .. grab your expertise.
HI Naisy.
I totally agree with Pazza & Xdrew – education first.
Spend little or nothing until you have a sound strategy.
Search this forum for lists of essential reading and usually you’ll find people suggesting starting with a book like Rich Dad Poor Dad.
And continue to haunt the forum as you have, and you will learn fast.
Good luck on your journey.
Cheers
thecrestthecrest | Tony Neale - Statewide Motel Brokers
http://www.statewidemotelbrokers.com.au
Email Me | Phone Meselling motels in NSW
Chuck it all in a fixed term deposit for 6/12 months and then spend the time learning as much as you possibly can about the options available to you.
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