Wow! What a great site! I have decided to take the plunge into property investment – after a friend inspired me. We are self funded retirees – and after years of hard work we own our home. We have $100,000 we set aside to fund our old age – but I can now see that it will not keep up with inflation and by the time we need it – it will not be worth much! So I figure that investing it in property – along with using equity in our home will be better in the long term.
I’m looking at buying property in the $400,000 range – but of course I’m so confused about where. Do I buy in Melbourne or Brisbane in a new high rise – or a suburb – or do I buy a house and avoid strata fees etc. etc… Do I go for a regional area – or my local coastal regional town in NSW. There is so much information out there – often conflicting – I guess based on personal experience.
I’d like to know what others bought for their first investment property. Any advice is most welcome!
Hey Heather,
Welcome to the page, lots of really well versed minds on here.
Firstly I would like to say your maybe not looking at this in the best way, when you say $400,000 and melbz, my town etc. if you could buy a 100 properties for free that had enough money for 10 lifetimes wouldnt that be incredible!
my point is, its the specifics of the deal that yeild a lot of benefit, but yes the town and everything else does come into play.I would be more than happy to have a chat and share any advice I can give.
my details are; Jaxon – 0431376130 (feel free to call or text and to set a time)I would Also like to give you an example of a deal I just did
purchase; $121,000
rents for;$240 Per week
Return on Investment; 10.3%
Pocket after expenses each year;$3000-$3500 in my pocket per year after expenses and after the Principle and Interest loan.There are a lot of options out there, many good, many bad, its knowing what your getting into and really doing due dilligence on the contract/insurances etc that makes a huge difference.
Have a great week.
Kind regards
Jaxon Avery
0431376130Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Hi Heather,
its great to see you are planning for the future…..so many don’t!
Before drilling down for a location, I suggest you define your goals/priorities (rental cash flow, strong capital growth etc). Once you have a plan of what you want to achieve and over what time frame you are looking to invest you can start to look at different property options and locations.
With a budget in the $400s you will still find some great options in Brisbane or Melbourne. I would steer clear of regional areas as if you are already retired any correction in the local market could take many years to recover whereas the capital cities are less exposed to these fluctuations in your price bracket.
I hope this helps?
Creative Investment Coach | Creative Investment Solutions
http://www.creativeinvestmentsolutions.com.au
Email MeCreative Investment Solutions - The First Choice For Property Investors
I agree a lot with NICK/CREATIVEINVESTMENT
but I would say Regional just needs to be studied prior, not avoided but you will be safer(whatever that means haha) staying away from places that have one large driving sector such as mining/farming, a diverse economy that isnt based off Coal prices or etc.
I think the huge thing is, there is a polarised view for a large majority and outplaying that can be a huge benefit Financially.
Kind regards
Jaxon Avery
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Thanks for that info Jaxon and Nick!!! Ohh – so much to learn!! Your example is interesting Jaxon – and Nick – probably more thought needs to go into our goals and priorities.
I will be in touch if I need more detailed advice!
Thanks
Heather
Hi Heather,
Why not use the 100k for retirement? You have your house paid off. If you take out a mortgage, which you will inevitably have to, your home could be lost. Seek independent paid advice from a financial advisor who can advise on the risks and benefits of this. Remember a house that can not be rented out, or sold, is worth little and is always a possibility. I know of a recently renovated property in prime real estate in a beach suburb of Hobart that is currently for sale and rent…for weeks.Hobartchic I was going to just leave this, then it dawned on me you might find this thought useful.
$100,000 for retirement can it be done? sure, of course, but very tightly and with a lot of restrictions.
now lets say your 70 and live till 90 thats 20 years. will 100k last 20 years to survive? rates and insurances will eat that up.
But lets say you bought the property I did above so thats a 20k loan, the repayments are $100 a month, thats $1200 a year if its unrented for a year. but if it was rented thats 240×52 = $12480 – 1200 plus lets take another $2000 for management fees and insurance, thats still over $8000 more, then ontop of that there are a stack of other ways to get some of that money used more effectively.
I adore and love Warren Buffet as a person and he has this great video on why he would rather all the farms in america than all the gold in the world. simple answer is, it produces something.
there are so many more options than sitting money in a bank, and also with sitting money in the bank ask Greece how that went for their retirement.
every other point about seeking advice I agree with but most people know what they have been taught, they don’t look beyond that or even think that matters.
I truly do. and pride myself on such.
If either of you would like to chat my numbers at the top as before, more than happy to help.
Kind regards
Jaxon Avery
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Thanks for your advice hobartchic.
I should have been clearer in my original post. We have a regular income for life. The $100,000 is extra. It has been sitting in the bank – barely keeping up with inflation – that’s why I was wondering if I should use it to invest in property.
Heather
Or you could consider a Mortgage Trust with an income in excess of the standard rental yield and use the surplus funds to pay down any non deductible debt.
With tightening lending standards we are seeing more and more clients follow this route of paying down down in readiness for a market softening and opportunities to rise again.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
HeatherJ and group, i’m on the other end of the beginning cycle.
I’ve spent 9 months creating a full scale working model for a small scale (178 houses) eco-village in the Hervey Bay (Qld) area and trying to find people who will partner with me as an investor to begin the development.
I can pay $500+ to join an angel group (been there) or try these types of groups to find a mentor or investor.
So, where do people who have ideas and plans but insufficient money to take their dreams to maturity?
We have a contract on a nice block and in the process of lodging Council applications. With the right investor it can all happen within a few weeks or months but where do you find the right people?
Any advice would be appreciated.
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