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  • Hello & Mortgage Question

    Hello all, Ryan and im 21

    I'm getting very interested in starting my adult life... hah!

    Only have about $5k of debt which is all with one bank (which I work for so super low interest, pretty much non existent) and I'm very very keen to get a house sometime this or next year.

    I currently earn $42k a year, and I'm in a very safe position recession/redundancy wise.

    I'm looking for tips and info on what I should be doing, saving is the obvious, but anyone got any ideas on what I want to look more into etc?

    The ideal outcome is to have a place that's around 3-5 bedrooms, pref a house which has a separate downstairs type flat which would be used to help out with repayments or I will be having some rooms rented out, but would look at getting my family started after about 4-6 years of being there... any tips/info would be great, I got a long way to go I know that :P

    Thanks guys!



  • #2
    Pay off the debt first Ryan. That way you save on the interest costs. Then start saving a deposit. You'll need a few 10s of thousands before you can do much.

    All the best of luck.
    Squadly dinky do!

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    • #3
      Hello Davo,

      Thank's for the advice, the interest on that loan is nothing I need to worry about, it's capped and total paid over whatever payment years is at $150.

      And yes having some sum deposit is always the way to start, I however have extra benefit when it comes around to mortgage's and things like that being involved with the insurance/banking industry.

      However i'm interested to know if starting small and growing up big, then adding other smaller places to my list is better then say, buying big and acquiring smaller units later on.

      Or just people's stories of their situations at my age and how they got into it, and pitfalls, thing's like that.

      I will have a read around and see if I can locate anything.

      Thanks

      Comment


      • #4
        Originally posted by ryan_jaffa View Post
        However i'm interested to know if starting small and growing up big, then adding other smaller places to my list is better then say, buying big and acquiring smaller units later on.
        You may not have a lot of say in that one Ryan, as the start-up costs of "buying big" may be (will be) prohibative in this environment.

        Never a bad idea to walk before you can run anyway

        All the best, you have plenty of time
        G
        Premium Villa Holidays in Turkey

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        • #5
          Yes!

          I'm very keen to get my head into the basics of the whole property world, my dad mentioned starting very small, something under say $200k like a student apartment in a CBD or small granny type flat somewhere, and buy it as an investment rather then to live in.

          All pencil idea's at the moment, very new to it all so will keep digging around.

          Time for sleep now hah, night all!

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          • #6
            Although many will, and do, disagree, I maintain that timing is everything in the property market.

            The right time might be getting near re "shoebox" Auckland apartments (ie, the next 12 months).

            Definitely study those ugly Stalinist buildings in the Auckland CBD. They are awful, but most don't leak and you can always get a tenant at the right price.

            The main issue re cashflow is the Body Corp charges.

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            • #7
              Hi ryan
              I started at about your age...yep just 3 years ago....kidding. try 21yrs ago.

              Start small buddy, my first foray was a block of land....in hindsight it was small but not the right idea as it provided no income and I serviced the loan on my own....
              of course it worked out OK as I was on very god income at the time and paid it off in under a year. That made the world of difference when it came time to step into my next investment property.
              Anyway my still unfinished story is somewhere on here.

              Comment


              • #8
                Hi Ryan,

                I'm pretty much in the same situation and age as you, I haven't done much yet due to lack of deposit but have spent the last few weeks digging around. Also watch out for serviceability of your loan - the few banks I have spoken to get nervous after repayments exceed more than 30-50% of your income.

                Familiarise yourself with the tax advantages provided by property - for instance, would you be able to get flatmates into your house (room by room) and get rent and also IRD interest tax deductions from your loan.

                Comment


                • #9
                  Join a Property Investor association or similar to keep motivated and hear those stories about how others have done it. I have heard some great ones since joining, and it does keep the motivation up. Seems to be slow going at the beginning, but once that ball starts rolling........

                  My (short) story

                  I was married, and between us we bought a house. Our first rental property settled the day we broke up. That was interesting, but our lawyer sorted it for us. We ended up with enough between us to each have a house with a large mortgage.

                  I couldn't afford my mortgage (see how crazy the banks were!), so moved into a caravan behind my place & rented it out. In the meantime, the market shot up, so I gained some equity.

                  A couple of years later every bank was wanting to lend money, and I was reading the Herald, bored that day. I wondered if I could buy another place and called off an ad, and the bank said OK over the phone. I was earning $21,000!

                  So I hunted around and found a place to buy & it was done. I had always been interested in property, so I knew areas, prices & rents. Just get out there & pretend you are about to buy. See what is around, pick your area & learn all about it.

                  The market was still going up, so I had great equity, but was getting sick of living in my caravan. I have to admit I wasted about 50k of that having fun which I am not having now! Lesson learnt.

                  So I sold that place & bought another with a back lawn big enough for a minor dwelling. Building that minor dwelling was a nightmare, and I wished I had that money I wasted. I rented the house out as soon as possible, and got an extension on the completion certificate.

                  Back home to live with Mum & Dad for 2 years at 35 years old. Lucky we all get on better as I get older! So 3 rents coming in, and my wages which had risen to 35k. I still hadn't obviously learnt my lesson properly, and although I could pay my mortgage interest, I didn't pay any principal as I felt the gain in value was much higher than I could pay off.

                  At Christmas I decided to move into my house and grow up. Luckily my brokeness (1 less tenant & household bills to pay) was covered by everyone else being in the same position now. Thank goodness the downturn hadn't affected me, still having good tenants & a secure job.

                  I really feel I was so lucky at so many points, and also that Mum & Dad would have me! I would be to scared to do the same again, knowing what I now know.

                  But I am so glad I did. It is amazing what you can survive in ignorance. I now have 30% equity in 1 property & 20% in the other, and that's with me doing most things wrong. Also, I have never put any money into a property, except my initial $10,000. I have fixed my loans at reasonably low rates which allow me to keep living in my place. (Missed the great rates, buggar)

                  So I'm now on hold until property values & my wages increase more. It will probably be a few years, but in the meantime, I'm learning as fast as possible, and have hidden my credit card from myself.

                  Also, I got a job in a good Commercial property management company, so I can learn about that in case I want to go that way. It is good being surrounded by property people who have done it for years. I almost begged for the job! Helps keep me on track.

                  I love listening to the guys at the property investors association, most have stories about doing it really tough at times, but to see them now is really inspiring.

                  It really helps to be young, (I now have time to wait, and you are younger than me when I started) and in your case, to have the bank behind you, and know the ins & outs. I worked at a Credit Union for several years, and have found that knowledge invaluable when having to tell the bank why I qualify, and working my way around potential difficulties. It was there that my boss told me a girl in my position shouldn't be buying property. I thought that a woman her age shouldn't have such a large mortgage & no investments, which I found inspiring.

                  All the best, and keep popping on here, these guys have so many great ideas. Easier to use their experience - it's free.
                  Last edited by Tan; 15-06-2009, 10:16 AM.

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