Hello,
It’s my first time posting here. I am actually just looking for advice on whether buying my first property is a good idea at the moment.
I’m 25 and employed in my family business with a wage of $26,000 p/a, I have $55,000 in savings and on average have $250 left over from my $500 wage each week. I have been wanting to get into the property market for a while now and feel like this is the right time, my parents are happy to go as guarantors. What I am after is a brick three bedroom which seem to be selling between $260,000 and $280,000 at the moment depending on location, to rent out. Average rent coming in for a property like that is roughly $280 per week in the areas I’m looking.
Should I keep saving longer? Or buy now?
Thanks in advance for any advice or suggestions.Hi Amanda its definitely possible to invest on a low income. Your best bet would be to see a broker who will be able to work out your borrowing power. Corey Batt or Colin Rice from on here would be able to help. From there you can work out a plan moving forward. Are you looking specifically for cash flow or capital growth? You can have both its just a bit trickier. Good luck and let us know how you go? :)
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
Hi Amanda
Yes certainly possible to start your investment portfolio on a fairly low income however understand that just because you believe you can afford the repayment doesn’t necessarily mean a lender will agree.
Most lenders have a pre-set scale of expenses they factor in to your affordability including such items as a living allowance, living at home expense, percentage of your credit card limit etc.
On the income side the percentage of rent as well as the accepted yield will also vary from lender to lender.
Certainly your current savings seem to be sufficient to get started with a useful cash buffer for a rainy day.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hello,It’s my first time posting here. I am actually just looking for advice on whether buying my first property is a good idea at the moment.I’m 25 and employed in my family business with a wage of $26,000 p/a, I have $55,000 in savings and on average have $250 left over from my $500 wage each week. I have been wanting to get into the property market for a while now and feel like this is the right time, my parents are happy to go as guarantors. What I am after is a brick three bedroom which seem to be selling between $260,000 and $280,000 at the moment depending on location, to rent out. Average rent coming in for a property like that is roughly $280 per week in the areas I’m looking.Should I keep saving longer? Or buy now?Thanks in advance for any advice or suggestions.
Hi Amanda,
I’ve just congratulated a 30 y/o on looking at property investing. A 25 y/o looking at it is even more impressive. Respect! :-)
Going only on what you wrote, it seems very likely that you should be able to buy the $260K IP with 80% finance without having your parents guarantee the loan but as Richard said, a more in-depth analysis of your finances will be needed.
Speaking with a Broker is almost always a free service and it doesn’t affect your credit file (unlike actually going to a lender and making an application) so if I were you, I would find a mortgage broker that I’m comfortable with and that I trust their expertise and take it from there. In fact, that’s exactly what I did before I bought my first property :-)
Please let me know if any queries. Always happy to help.
Best wishes,
EthanEthan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Hi Amanda,
Welcome to the forums – great working starting to look at investing. You’re definitely on a low income – but this doesn’t necessarily preclude you from buying an investment property at the level you’ve estimated the purchase to be at. A quick run of the calcs show you should just scrape by and a guarantee wouldn’t be required.
The real story is about where to from there – if you want to purchase further property in the future it would be necessary to increase your income, which will also give you further capacity to grow your savings base.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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