Hi all,
Im looking for some direction and mentoring on where i should be headed on reaching my goal of being a property investor. Where do i start??
A little about me!
Im looking to purchase my first house and renting it out asap as opposed to living it. I currently have 150k for a deposit and im saving 10k a month and paying huge amounts of tax through my job. I live for free and have no expenses at all. (definately not spoilt).
My goal is to have a few decent houses by the time im 30 i have just turned 23.
Im looking to buy in Newcastle NSW so any advice on that would be appreciated as well. Also if anyone can recommend me a good property accountant in newcastle would also good!
So basically im looking for any tips, strategies and advice people can me to help me in my situation or what would you guys do in my situation??
Thanks heaps (:
Sit down with your broker or banker and nut out what your finance structure will need to look like.
You will need to determine whether you use the entire deposit, some of it or the minimum amount so you don't hit the 'deposit' wall. By the sounds of it you should not have any issues with servicing.
If you are going to go hard and do a 95% LVR lend then its generally better to do it sooner than later in the purchase cycle.
Newcastle is a good place to buy right now but not a lot of stock. I would consider purchasing a property which can be renovated or developed into a 2 dwelling block (could be on same title or separate depending on the strategy).
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
I agree site down with a good broker because frankly if you have $150,000 saved and are saving $10,000 a month you are clearly on a good salary. So what you should be doing is buying property with strong capital growth. My feeling is you could buy in a better area than Newcastle.
You also need to consider what sort of strategy you want to do. For instance do you have the time to renovate or develop a site. These are the things you need to consider carefully. Once you have worked through those things you can then look at where you are going to buy.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Consider structure set up too.
Future deductibility, savings, CGT etc. It may be posisble to set it up so that the first proeprty could be CGT free by simply living in it briefly.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
As Shahin mentioned, it all depends on how aggressive you want to be with your saved funds. Depending on your risk tolerance, you might want to use it on the one property, or could have the option of using some funds on a second IP if using higher LVR's.
Also need to factor in what plans you have for any future PPOR's to consider funding structures.
Cheers
Tom
Hi Desertfox
Welcome aboard.
Before jumping into anything, I'd spend some time educating yourself. There's a sticky thread on here with some good recommended reading. There's also a couple of excellent property forums like this one that are fee and full of updated information.
$150k is a good start – and you can do quite a lot with it.
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 too am starting to think Newcastle is a good option. For me, it is strong CG I'm after. Shahin, would you consider the inner east, specifically The Hill district a good option for strong growth over the next 5 years or so? As a feel I'm referring to 2 bed units in small complexes, with the option of renovation at some point. Or for the same buy in (around the 300-350k mark) would it be more likely that say Parramatta, inner west would make a stronger gain in this time?
And would the "profitability comparison" be likely to change between the two after 5 years so say 10 – 15 years, as in as time goes on would it be likely that one or the other could pull away substantially in regards to CG due to scarcity or market trends.
Interested to hear your thoughts…
Hi there,
Your finances definitely allow you to find and seize great investment opportunities. As a first investment, I recommend looking for high and also safe capital gains. You should take the gross rental yields and vacancy rates into account, as these indicators can give you more details about the area your are looking to invest in. For a smart investment, you should look for rental yields higher than 5.5% and vacancy rates lower than 2.5%. You could probably benefit from more research regarding Newcastle, I myself have noticed that the current trend is not that optimistic with prices falling by 4% in the last 12 months, according to APM. For higher income potential, I recommend the Northern Territory or even some areas of Queensland.
New units developed by important builders can guarantee quality finishes, an important element on the long run for capital gains. Also look at the economic drivers the area has to offer, like gas projects, mining, tourism, defence, and at the population growth, because if you identify a hot spot then your investment is indeed safe and profitable.
Cheers,
Emil
Hi Desert Fox
Was down in Newcastle only last week looking at a property in Merewether so i can fully understand why you would want to look to invest in the City.Lovely beaches and the wife was born and bred there.
I have quite a few forum clients in the Hunter who are on good incomes due to the industry based their and when i sit down with them i say the same thing.
When i work with a client the property selection is not the first point of consideration but the structure and goals going forward are. Seen too may new investors get swept up and make poor finance and investment decisions where a sit down with a Professional can be worth the weight in gold (or in my case coffee).
There are many ways to reduce your Tax liability especially on the sort of money you are earning and even at 23 years of age looking at Tax effect structures such as SMSF are definitely worth thing about.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I am not a buyers agent or hunter expert but I know its a very stable and steady market. I would look at houses which I can manufacture CG – if you can get your hands on land which you can develop then you have done well. I am not familiar with the council but I have heard the zoning is not overly friendly.
$300k will not get you far in Parramatta unless its a unit (and an old unit with high strata).
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Careful with Newcastle. There has been a lot of hype and excitement built up by media and so called property experts but we have already seen significant rises in property prises over the past 6 months and I believe things will start to flatten out..employment market is not as strong, mining has slowed down, looks like T4 won't go ahead, etc.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
