How to get foot into the door

Hi & welcome to the forum.
Saving for a deposit is the litmus test for investors.
It tests motivation, patience, determination, money skills, discipline, goal setting, . . . . .
It’s not easy so many fail.
It requires you to adopt the principle of delayed gratification – save now enjoy later.
Sounds like you’ve reached a fork in the road.
I wish you success.
cheers
thecrest

And sorry in answer to your question- I saved approx $30k to purchase my first property. I also used the $14k first home owners grant to put towards the deposit and claimed the stamp duty expemtion for first home buyers. I am now living in a rented unit and have rented this apartment out to a nice tenant who pays her rent on time.

Luke.

I know it can seem a bit daunting to try and save enough for a deposit. I believe you should ideally try and save 20% of a deposit, one reason to avoid lenders insurance, and also because by doing so you should have enough equity in the property for future investments.

But with the median house price possibly around $400,000 in most areas, it is not likely to have $80k just lying around, not to mention all the costs associated with buying a property, such as solictor fees, stamp duty, mortgage fees etc etc. Nobody is really expected to have this sort of money just lying around.

If you are really desperate to get your foot in the door in terms of investment properties, there is no reason why you can’t go out into the country areas for investment oppurtunities, although the capital gains is typically not as high as city areas, the rental yields are quite often a lot higher, and it is typical to achieve a round 9-10% gross yield, and once all expenses are taken out you may be lucky and find it is positively geared.

The other benefit with country property is the entry level is a lot lower, it is not hard to find decent properties in smaller town centres for around the $100,000 mark. Then you only need to save up around $20k. It may not be as glamarous as going into a nice 3 bedroom penthouse apartment in the city, but it is definitely one way of entering the property market when you have next to nothing to start off with.

i have been saving for a few years now with a deposit of 20-30k….
i used the first home savers account and will use the FHOG to help me out. I'll buy a PPOR with it and then convert it to an IP – you could do this as well.

Good luck!

Welcome to capitalism. When some company makes enough money, there is a job for an employee.
Work hard, build reserves, you’ll get there.
Good luck
cheers
thecrest

I am in the same position, but i take the view that while i save i can investigate, read , learn and ask so that when i have the hard cash to put down im not taking a gamble.

depending on your entry level, personal loans, private lenders or credit may be an option.. it will factor heavily against long term profitability but will allow the building of equity that otherwise you may have been locked out of.. but with that goes a higher inherent risk if things go sour.

A deal like that is better for what's known as flipping… put down a deposit, negotiate long settlement and arrange early access to property for rennovations in the contract… have a team you trust ready to go and improve the place as fast as you can in a cost effective / value adding manner.. then while all this is going on line up a buyer .. it is risky, takes skill and planning but from what i read it can rapidly get you into the game.

Another option may be to go for good land at a lower purchase price, have plans drawn up and approved, do a deal with a builder and then sell to a buyer based on the plan..  again needs alot of research into the "how to"  and maybe some official legal advice…
 

Hi Wannagetthere.
Obviously there are a number of ways and means of “getting there”, ranging from possible to certain, but I suggest you put the main one into action because it’s guaranteed to work – save for a deposit. The proven method obviously is to cut expenses, increase income, build reserves, increase education in real estate, educate yourself exhaustively on a geographical area you will target. Aim for say 3 years, document all your efforts ready to impress a lender, and it will become a certainty. I guess you could ask yourself if it would’ve been worth it if you’d put a plan into action 3 years ago and own a property now – so where would you like to be 3 years from now ? Where you are now, or owning your first property?
Wish I’d started very young. The above info from me is very hypocritical, because I didn’t do it until my forties, it’s what I know now.
Just get started, use this forum and all the help from the finance and real estate investing experts here who’ve been so very helpful to me, and the results will be yours.
Cheers
thecrest

there's different kinds of vendor finance…

I've seen alot of deposit finance deals, however, very few vendors will vendor finance the entire price of the property – and if they do, they charge a high interest rate

Hi Richard.
That’s interesting about NT Govt – howzabout NSW Govt doing anything to help, or is that a really dumb question to ask about this greedy oppressive NSW mob ?
Cheers
thecrest