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Savings in the Bank, Time to Invest

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  • Gladdynook
    replied
    My advice would be to start out small. 2 bed tidy (or you can renovate if you're so inclined) unit in a reasonable area (not a fancy suburb, but by no means the worst). This way you're more likely to get decent tenants, and have good demand for the property.

    Stay away from larger blocks with body corporate and other hidden costs.

    With a smaller unit you are less exposed should the unexpected occur ie vacancy, damage to the property, maintenance will be less, and if and when interest rates rise, you will have less of a change to outgoings.

    The experience gained from a small unit will be invaluable and over time you should look into larger (better returning) properties. But with these comes more work!

    Also, i'd keep a fair portion (say $20K) of your savings back for a rainy day. Better to have it for emergencies than put everything into the property.

    Work out what it will cost to purchase the property too. Builders inspections, valuations (not usually required if purchased at auction but check with bank), legal fees (banks can offer to pay some). Be aware that at settlement you will pay for any portion of rates prepaid by the previous owners. This can be significant especially if they paid their rates for the entire year in advance!

    Then work out all costs associated with owning a property and include these when working out what your exposure is.
    Mortgage repayments (interest only is my recommendation), insurance, council rates, water rates (fixed portion), maintenance, lawns/tree trimming, allow for at least 2 weeks vacancy per year. etc

    Good luck! and well done on saving such a significant amount of deposit! You deserve to do well.

    Leave a comment:


  • eri
    replied
    Originally posted by NomoneyNotalk View Post
    hi Jack,
    But you can never learn enough until you have bought one. So start with small one that you can afford comfortably.
    as above

    while having all the theoretical knowledge is great

    until you actually buy something and go through the process of signing documents and paying for reports, buying furniture, moving in, finding tenants etc you will have no frame of reference to hang that experience upon

    so it will make quite a difference to your learning curve if you only buy 1 expensive property rather than many cheap

    Leave a comment:


  • NomoneyNotalk
    replied
    hi Jack,

    I think to start with, you can look at properties in the market, maybe from trade me and go to some open homes, maybe attend some auction and watch. And then look at the rental on similar properties you have looked at. Compare them with the cost of owning a property such as mortgage payments, insurance, etc.

    But you can never learn enough until you have bought one. So start with small one that you can afford comfortably.

    And along the way you can always ask people in this forum for guidance.

    Leave a comment:


  • flyernzl
    replied
    Originally posted by Jackblack View Post
    Property Investment is something I have always wanted to get into
    Why?
    What specifically are you trying to achieve?

    Once you have formulated your goal, it will be a lot easier to work out how to get there.

    Leave a comment:


  • eri
    replied
    spend an hour reading here everyday

    and use the search function to follow thread leads that seem interesting

    Leave a comment:


  • Jackblack
    replied
    Originally posted by Toasty View Post
    There will be many more replies but I will jump in first.

    Read and understand as far as you can the different type of property ownership structures available. Then get a reputable lawyer and accountant to get the structure right for you before you even buy a place. It saves a lot of confusion to do it up front rather than trying to do it all at once when the perfect property comes along.
    Thanks Toasty great place to start

    Leave a comment:


  • Toasty
    replied
    There will be many more replies but I will jump in first.

    Read and understand as far as you can the different type of property ownership structures available. Then get a reputable lawyer and accountant to get the structure right for you before you even buy a place. It saves a lot of confusion to do it up front rather than trying to do it all at once when the perfect property comes along.

    Leave a comment:


  • Jackblack
    started a topic Savings in the Bank, Time to Invest

    Savings in the Bank, Time to Invest

    Hi all. Just after a few tips in regards to buying my first investment property. Property Investment is something I have always wanted to get into since before I can remember. I have saved between $70K-$80K to put into an investment property, I am in my early 20's and I have saved very hard since the day I left school. Reading on the Internet I seem to get miss lead very easy and I noticed there are a lot of experienced Investors on this Forum.

    Any advice will be great, e.g. Websites to look at, books to read, prime areas to invest at the moment and just general rules of thumb.

    Cheers
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