hi Everybody,
I want some thoughts and advise on a property iam thinking to buy for living.its located in narre warren in maramba drive.i want to start into investing in property and build a portfolio and would like to start with a house for myself first(paying rent of 1800 currently for a 2 bedroom apt)and in 1 year or 2 i would like to move near to city as iam working in city.have about 150K in savings and saving 4000 per month.iam on a very high tax bracket almost paying 35~40 in tax.so want to see if i can reduce that with investment in property.iam not after immediate gain.
Below is what i would like to know
1.how good is narre warren for a family.
2.how are the crime rates etc.
3.Schools (have got one 4 yrs old)
4.if i decide to leave the house for rent what could be potential returns?
5.Price range looking is 350~370K.. is this a fair price for 4 bed room 600 Sq block?
6.OR do u think if i should be looking at any other suburb.i want to be on the S.E side though.
Any advice would be really appreciated…
Hi Smartcube
I can't comment on the area but thought I'd comment on the tax bracket issue.
I wouldn't buy a property in an effort to lower your tax bill – it's a flawed concept. It means you need to lose $1 to get back 40 cents.
While the tax benefits associated with property investing are handy – they should be (in my opinion) viewed as a bonus rather than the primary reason for 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]
I have done a lot of work in the South Gippsland area over the years which has involved numerous trips through there and adjacent towns when traveling to/from Melbourne. It has all the hallmarks of an outlying suburb that due to urban sprawls is becoming less of an outlier as time goes by.
If you are going to live in it and then convert it to an investment then I would recommend that you get maximum borrowings on it, interest only and don't pay the loan down.
jamie thanks for your comments.investing in property for is not just to benefit of tax rather would like it to be a bonus given so much goes in tax.my long term goal is to start simple small and learn the tricks of the trade build a portfolio(5~10) properties anywhere in australia in next 2~3 years.i hope its achievable.
Thanks bardon for ur comments.
can you explain me why should get maximum borrowings on it and interest only loan for this first property? and also how long should i hold the property before i can change to IP? is there any min period here?? wat are the benefits/drawbacks of doing so?
Thanks
The reason to maximise and keep your borrowings high are so that when it becomes and investment the interest on that loan is fully tax deductible, this and being I/O will mean that you have a better cash flow on the investment. You should keep as much of your own cash/savings/capital in separate accounts so that you have it on call and when it is a house to live in you can use that cash to offset against your I/O loan.
With respect to timing if you are going for a grant there is a minimum time and I think there may be one with respect to stamp duty but other than that you can convert whenever you are ready to.
As Bardon said, as you are considering in converting to a investment down the track, the loan should be as high a LVR as you feel comfortable with, and it should be IO. In fact all this applies to all properties that are already or will become investments. This maximises your deductible debt.
I will also add if you are disciplined with money to hold your excess funds in an offset account linked to the initial property, which will lessen your interest payments. Then when the time comes to buy your new PPOR, you can use the funds in this offset as the deposit, costs for the new purchase.
A decent broker can help setup the loan structure appropriately for you.
Cheers
Tom
Hi Smartcube,
1. Narre Warren excellent for families we lived there for many years. (In Louisa Crt just off Maramba Dve)
2. Crime rates are not to good, but thats really around the station or Narre south. Maramba I would give it the thumbs up!
3. Primary school within walking distance (don't know much about it)
4.Surprisingly (as I thought it wasn't going to be good at all) we bought ours for $252,500 and sold it 5 years later for $350,000. That said we put in about $20k in renovations.
5.We sold ours in 2010 it had 3 b/rooms 670sq block, so I imagine for that price range you might need to do some work to the place as the houses around the area were built in the mid 1980's
6.We bought in Narre at the time because it was and I believe still is the best bang for your buck so to speak!
Hope that helps
Cheers
Paul
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