澳洲Australia property Young investors - tell all | Sydney


在澳大利亚 I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo


I would love to hear stories of young people who have started young at investing also would like to hear where they are at now with their portfolio and cash situation.

cheers

adam  

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Welcome to somersoft wallace.
Look up Young Gun's post's, you will find them under his name in the members area, his first post was a similar question----i think.
Enjoy the forum

Ken  

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Not so young!

Hi Wallace

I just wanted to reply to make myself feel better that I am still young, soon I turn the big 30!

My husband and I bought a PPOR in 2003 in outer suburbs of Melbourne for £196K. Last year we decided to go overseas and earn some poundage and see Europe. So we rented out the PPOR at £185 pw. Not enough to cover our interest but OK. This January we came home (to get a visa and visit family) but also decided we might try and get an IP. Out old "home" was worth now around £230K. So we re-financed and bought a small old 70s unit again in outer eastern suburbs for £169K. It is under-rented but we have come to an agreement with the long term tenant to increase rent slowly to market value.

Plans...when we get back we are thinking of a place to live in but also a potential development? We are reading up and chasing ideas at the moment but very keen to have a go at property investment. We would welcome any suggestions or ideas from anyone!

Also while I am here, we would like to thank both Kristine and Rolf S. for their advice and help with refinancing, I would heartily recommend them to anyone. When you know very little, it is such a comfort to have the support of someone who knows ALOT! So thanks to you both. :)

Bye!  

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Welcome, Wallace,
The quick version of my story:

Currently aged 29.

Graduated uni and started work just before I turned 21. Had been saving pocket money, etc prior to that.

Bought my first property in 2000 (age 22) for $169,500 in Brisbane and it's now worth about $285,000. Have averaged 1 property a year since then.

Mixed bag of returns: great results from the earlier Brisbane places (10% pa cg) and the recent Perth house (up 60% in 2 years), but the later Brisbane purchases have been flat. Have one unit where there are lots of water proofing issues, but I bought the place for $165k in 2003 and it was just refinanced at $235k, so I'm not complaining TOO much.

Up until this year (girlfriend currently studying so savings have fallen to about 25% of net) I'd been saving 50% of my after tax income (75% when I lived at home). I've been working overseas in London and Tokyo for the last 5 years at much higher salaries than I could have made in Sydney. Savings therefore has been much higher, too.

Portfolio consists of IPs and shares. Net cashflow is neutral. The portfolio doesn't really have any impact on my day to day lifestyle (since it's all equity and I don't use equity for living expenses), but I feel a LOT more secure knowing that if I got fired tomorrow, I can live for years on my existing kitty. Have taken some long holidays (took 5 months off last year) in part because I can.

Future: plan to go back to Sydney in 2-3 years and look at property opportunities. Plain buy and holds, small developments and maybe commercial and industrial? Also thinking about starting some sort of private fund (financed, e.g. by private investors and super funds, maybe Japanese investors in Qld?) to acquire and develop residential property. Lots of potentially exciting stuff up ahead.
Alex  

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inspirational stuff alex ...  

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Hi Guys

This is my story to date. I'll keep it short as well (and hopefully not boring).

Aged 27 currently. Finished uni at 22. Spent 3 years working in the Banking & Finance industry. Last couple of years working at a couple of Universities here in Melbourne (part-time 6 months of the year).

I started investing in property when I was 24. I had no money as I spent what I earned so I took out a $10k personal loan to get started.

I purchased my first in Mooroopna and bought a couple more in Bendigo to begin with 3 wraps in regional towns in VIC. I refinanced Bendigo to obtain some more cash and headed up north.

I went and purchased 2 properties in SEQ...Banora Point and Tugun. They have gone a nicely so far and I am planning to develop the Tugun property as its zoned as a duplex site. Both of these see water as it normally attracts a premium.

After that, I thought this property stuff was great fun so I went out to buy some more. Friends thought I was mad and the oldies told me to settle down and not get too far ahead of myself.

Bought a 2 bedder flat along the beach in VIC, did a quick reno (and obtained water views as a result) and increased the equity in the property. All of a sudden I realised the potential of property in terms of obtaining financial freedom. I thought "how long has this been going on for????":eek:

I then took a trip to Europe for a few months and didn;t buy anything for 6 months or so. Once I came back I tossed in the job at the Bank and decided to spend more time purchasing property. The last 18 months have been pretty good to me.

I bought and wrapped another 12-15 more houses in regional towns to increase cashflow. The cashflow helps me support my negatively geared properties. Some of these wraps are now in the process of refinancing.

The last 12 months I have been more keen on land. I have 3 developments going on....a 3 unit development, subdiving a block of land into 2 & building 2houses, and splitting another (corner block) for a couple of 2 b/r units.

In the last month, I have purchased 2 houses to wrap, 2 buy & hold's, a block of land and I have have offers on quite a few more (for wraps and duplex sites).

My strategy is to force growth and/or cashflow and not rely on the market to provide this...obviously the growth will come in due course.

I have also built up a share portfoilio for growth (though borrowed funds) which have gone up in value and write covered calls on other shares I own for income. This allows me to support my expenses and reinvest.

Thats about it really....future plans are to do what I am still doing and get to a level of developing done by some of guys here on the forum. You guys are truly inspirational.

Next step is to move out of home. :eek:

Cheers

OC1  

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Dad gave me the Jan Somers book when I was about 18, couldn't put it down it was great! This was for me!

Bought my first investment property at the age of 19 in 2001, a 2 bedroom unit in the Wollongong CBD. Went up in value very quickly as alot of places did at the time. Refinanced and bought a townhouse in Redcliffe, QLD in 2003 at the age of 21.

Total value of the portfolio is about 470k in 2006 and I'm now 23, with a loan of 350k and the total rent per week is $365. I recently pulled out another 30k which I have put into various managed funds to build up a larger deposit for the next investment property, which will hopefully be a house in Sydney in 2007-2010.

I'm in it for the longterm and will keep buying as time and money permits and I'm aiming to retire when I'm 45.

Regards

Luke  

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FrankGrimes said:
Nothing stella really.Click to expand...
On the contrary Luke, you have a 470k portfolio and you're 23 years old. I would hate to hazard a guess at how far ahead of most 23 year olds you are, well done mate. It is a stellar effort so far.

JIM  

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FrankGrimes said:
Nothing stella really. I'm in it for the longterm and will keep buying as time and money permits and I'm aiming to retire when I'm 45.Click to expand...
I agree. Great effort!

What I've found is that you get more and more blase about it as time goes along. I hit $1m in debt last year, and thought, Is that all? I'd always thought it would be more of a milestone.
Alex  

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Congratulations Alex, OC1, Frank and Porps sounds like your doing great!

I'm 23 and purchased my first property early March this year (after accidenatly finding this site and being inspired), it was in need of a cosmetic reno, I got it for $212K. Im currently living in it as my PPOR (FHOG claimed to provide reno funds) for 6 months while I complete reno work, Since purchasing and without any work done to it, its value has already gone up about 280-290K initial rental evaluation was about 160, Once the reno is finished I plan on renting it, hoping around $210-$220 wk, and valued about $320k if the market keeps going. Ill then be drawing down all available funds to purchase a property in Brisbane next and maybe some managed funds thrown in along the way.  

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Well done everyone.

OC1- I am very impressed. I first stumbled upon Somersoft a long time ago when John Burley and wraps were all the rage. I didn't have the guts to do wraps and no money to attend Bootcamp though I did buy the readings/folder.

Bought first property at 23 yo. Made over $200k on buying and selling in the past few years.

Property networth of approx $350k with about another $100k of cash and shares. Car paid with cash and a house full of new furniture and electronics in storage (waste of money). LVR is 65% so I am pretty comfortable with that.

All Ip's are actually positively geared. I always though they were negative.

Goal is to buy a PPOR fully paid off or with a loan of under $100k. Put all our extra $$ into repaying our IP's within 10 to 15 years and be able to buy more IP's. I want to be financially free by 40ish. Ideally would be to own 4 IP's fully paid off and 4 Ip's mortgaged, paid off PPOR and about $250k min in managed funds.

I envisage another 5 or so house & land packages to build and sell and I would have accomplished my short term goals.  

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alexlee said:
I hit $1m in debt last year, and thought, Is that all? I'd always thought it would be more of a milestone.
AlexClick to expand...
it's actually a lovely feeling when you suddenly realise "it's just money". all the stress and worry disappears - as long as your credit rating never suffers ... it's just money.  

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oc1 said:
You guys are truly inspirational.Click to expand...
Are you kidding??!?!?!:eek:

That was one of the most mind blowing posts I've read on here. All that and ONLY 27!!!!

You're the inspirational one OC1!!  

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I don't know if I qualify as a young investor, certainly my better half does :)

I'm 31 she's 26, we started in 2002, so at ages 27 and 22. Late bloomers in comparison to some on here. Let's just say my debaucherous youth held me up a little.

We bought our PPOR that year for 301k, and have since bought IPs in 2003 and 2005.

We have been lucky more than anything, in that we bought all property in Perth which has done really well over this time, and is continuing to do so.

We currently hold ~1.2 Million in property with borrowings ~700k, so net worth of approx 500k.

Both IPs are neg geared to the tune of about $100/week (combined).

We are about to buy into a partnership in a kitchen company so once that settles down, we'll be looking for IP #3 later this year, which we hope to be a future development site sometime down the track.

This should have us near our servicability limits, so will start to look at shares for income and possible renovations for increased yield.

We have a goal of financial independance by (my) 40 through a strategy of buy and hold IPs for growth and shares for income.

It's an evolving beast however, and we're lovin every minute of it!  

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sue78 said:
Well done everyone.

OC1- I am very impressed. I first stumbled upon Somersoft a long time ago when John Burley and wraps were all the rage. I didn't have the guts to do wraps and no money to attend Bootcamp though I did buy the readings/folder.Click to expand...
So did I. I've seen Burley live but I didn't do the Bootcamp. Love this forum!  

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Sultan of Swing said:
Are you kidding??!?!?!:eek:

That was one of the most mind blowing posts I've read on here. All that and ONLY 27!!!!

You're the inspirational one OC1!!Click to expand...
Thanks for the kind words SOS. :eek:  

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A fun little exercise is to run a projection of what your portfolio will look like at age 30, 40 and 50 making some general assumptions. e.g. 2 properties a year at a median of $300,000, yielding 5% and growing at 7.2% a year.

I ran the spreadsheet until age 40 and it says I'll end up owning $40m in property on $16m of debt. All this based on zero cash input by me (105% LVR via refinancing). The first one is the hardest but after a few IPs and a few years of growth you can pretty much buy using equity.

Might not turn out that way, but it's a nice illustration of compounding, starting early and regular buying.
Alex  

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alexlee said:
I ran the spreadsheet until age 40 and it says I'll end up owning $40m in property on $16m of debt. All this based on zero cash input by me (105% LVR via refinancing). The first one is the hardest but after a few IPs and a few years of growth you can pretty much buy using equity.Click to expand...
That's not the case with us. We have plenty of equity but have to buy neutrally geared properties as we can't afford serviceability. We deal direct with Westpac though so we may have to start searching for a good mortgage broker if it come to a stage where Westpac can't do much for us.

To buy neutrally/positively geared properties, we build and when building,bank still needs to see that you can afford to service the loan on the land and the building prior to completion with your income!! they don't look at your savings.

Maybe I am just not as clued up as you guys.  

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sue78 said:
That's not the case with us. We have plenty of equity but have to buy neutrally geared properties as we can't afford serviceability. We deal direct with Westpac though so we may have to start searching for a good mortgage broker if it come to a stage where Westpac can't do much for us.

To buy neutrally/positively geared properties, we build and when building,bank still needs to see that you can afford to service the loan on the land and the building prior to completion with your income!! they don't look at your savings.

Maybe I am just not as clued up as you guys.Click to expand...
My spreadsheet was based on the fact that I'll keep working until 40. Which I hope isn't necessary. Admittedly my salary is quite high, and I hold some high yielding shares which helps my serviceability. So far I haven't had any problems. Of course, the projections and just projections and I'm sure I'll hit serviceability ceilings by that time. Though by then I hope I'll have other sources to finance properties.

Just a fun thing to do to know what you can achieve if you keep doing what you do now. Far better than people who just end up in the poorhouse if they kept doing what THEY'RE doing now.
Alex  

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Alex

does your other 1/2 have similar goals and views on investing? I see this as my biggest issue in my future plans.

Interested in your situation..  

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