澳洲Australia property Thoughts on our situation | 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


Hi everyone, I would be grateful if anyone has any advice on our situation please.

We are a mid twenties couple who currently own no property, have no children and have a combined income of $160,000. My partner is military so we live in a DHA house which we absolutely love, it is in one of most pleasant suburbs of Canberra, right near the city and costs $217 a week (ignore the username, we posted here early this year :)). If I could buy it, I would, I absolutely love living here and don't want to leave.

We have saved $100,000 and have no debt. We share a car worth $5k. We cannot invest in Canberra without loosing our DHA house, in that if we purchase a suitable property in our posting location we are expected to live in it. Suitable to DHA means any type of property at the moment because we dont have any children, so purchasing a unit here would mean having to move into it, which we cant because we have two dogs.

However, if we do buy a house in Canberra and live in it we are eligable for Defence Home Owners Assistance Scheme which is a payment of approximately $280 a month towards our mortgage, going up to $420 in 2012. DOHAS can be accessed through either one of the Defence Credit Unions or the NAB. I think the current fixed interest rate offered is 7.5%. The only condition is that we occupy the house for a minimum of 12 months.

As we have access to a home through DHA for very littler per week, I always thought it would be best to occupy that and buy an investment property outside of our posting location. Does anyone have any advice??

Buy a PPOR here in Canberra and utilise DOHAS payments or use our money to purchase an investment property outside of Canberra and stay living in our cheap house?

Many thanks  

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Hiya

Welcome

Part of your indecision here is that you are perhaps not clear on ur middle or long term goals.

One of those is, where do you see yourself livig in 15 years time and why, and HOW do you see yourself living in 30 years time

Backing up from those to now, may give you some better clarity around where to go

Those grant benefits will be be available to ypu even after you have bought an investment property is my understanding ?

Without knowing what you want to do, is that you can have an each way bet : ) and possibly have both

Buy a decent place somewhere like Brissie with a 10 % deposit, buy your Canberra place with a 10 % deposit plus the grants

ta
rolf  

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We are a mid twenties couple who currently own no property, have no children and have a combined income of $160,000. My partner is military so we live in a DHA house which we absolutely love, it is in one of most pleasant suburbs of Canberra, right near the city and costs $217 a week If I could buy it, I would, I absolutely love living here and don't want to leave.Click to expand...
what would it cost to buy a similar place? 3x your rent, at least i'm guessing. you might love it and not want to leave but your partners occupation means you could be forced to move at any time. don't buy to live in.

We have saved $100,000 and have no debt. We share a car worth $5k. We cannot invest in Canberra without loosing our DHA house, in that if we purchase a suitable property in our posting location we are expected to live in it.Click to expand...
so buy investments property outside the area. lots!

As we have access to a home through DHA for very littler per week, I always thought it would be best to occupy that and buy an investment property outside of our posting location. Does anyone have any advice??Click to expand...
you're correct. buy in a location you're unlikely to be posted to then and perhaps somewhere you might want to live when/if your partner exits the forces.

i'll leave it up to other posters to advise where you should buy ip's. where would you like to buy?  

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Thank you both.

Rolf - your post made me laugh :) I cannot imagine myself in 15 years, I still feel like I have just left school :p. I suppose though, in reality, I would like to be able to stay at home with possible children if we have them. How do you specify what that means? A fully paid off PPOR would be nice!

Ed - we cannot afford to buy into the suburb we are living in. Houses start at $650++. I totally realise I will have to leave here at some stage, par for the course of being in love with a military man.

I think I would like to live in Brisbane. It is also highly likely we will return to Brisbane at some stage during his career but not for the next 2.5 years or so.

I just wonder if we should ever, whilst he is in the ADF, occupy our own house. It seems more logical to my very novice investment brain that there is no point occupying a house that costs you $600 a week whilst someone else can do that and we can live on the cheap and therefore put more money on the mortgage. Am I way off the mark?

With $100k, should I be looking at two $40k deposits on two investments?  

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Two Scenarios:

1.
Buy Canberra house in need of facelift/reno with DOHAS, live in for 12 mths doing as much work as possible yourselves. Get revalued in 12 mths after facelift, locking in cap gains.
Then, buy another Canberra house, move into and facelift, and rent first house to DHA and retain DOHAS benefits.

Canberra median house is 533k. You need to ask yourself how much luxury you are happy to live without and how much facelifting you can do while both working f/t. You could also talk to DHA and find out what type of properties they are looking for in what Canberra suburbs. Keep in mind Canberra rental market is probably tightest in Australia, therefore rent growth should stay competitive.

2.
Buy 2 IPs in another cap city (maybe not Bris) and continue to enjoy your subsidized rent, forgoing DOHAS.


Would help to carefully spreadsheet the scenarios, pre and post tax with all tax advantages included. SHouldn't be too difficult to do if you are both educated and savvy motivated investors.
Relative performance will depend on forecast capital gains and yields.

Keep in mind the market expects interest rates to be 0.5-1.5% higher by 2012. Think about what impact that might have on property prices.  

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I'd steer clear of defence areas. What about newcastle, mining areas, places without military bases, but with strong infastructure. Or find a capital city and make sure any potential IP's are outside the raduis (think it used to be 30kms). You could look into places within 4hrs of where your at, so searching allows you to go check out houses in a day. I'm sure there are many major rural/seaside communities within 4hrs of Canberra that have ripe investments ready for the picking. Its a matter of looking into areas and doing your homework.  

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Being a Military member myself I understand your situation.

Not knowing what rank or job your husband has, I would still imagine you guys will be moving around a lot (if he wants to stay in the military).

If you think the Canberra market is good then definitely look at buying in the Northern suburbs (Bonner etc) and utilise DHOAS as well as the 16k grant you get for buying your own house (forget name).

I would personally be waiting until your husband gets posted to a 'buyers market' eg. Brisbane etc and buying there.

I like the idea of DHOAS but have yet to use it (waiting for my 12 years so I get the full DHOAS payment of $415, or whatever it is). Schwwedy makes a good point, if you buy outside the 30km Defence radius you are entitled to DHOAS, live in it for 12 months and then when you get re-posted back to the location you can utilise DHA service residence or RA.

I am also living in Canberra at the moment and don't see the market for buying IMHO.

Good luck and throw us a message for any further help.

Regards,

Roachy  

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What about buying a DHA house in another military area. Thus it wouldn't be an issue until you were posted into that area (and the property is vacant). This way you have a reasonably new house, long guarenteed lease, and generally in a higher populated area.  

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schweedy said: ↑
What about buying a DHA house in another military area. Thus it wouldn't be an issue until you were posted into that area (and the property is vacant). This way you have a reasonably new house, long guarenteed lease, and generally in a higher populated area.Click to expand...
Schweedy unfortunately you don't get access to DHOAS unless you live in it for 12 months. Also, DHA houses are overpriced.

I heard there was a new clause somewhere about having a house in the same locality you are posted too. And that if it financially disadvantages you, you have the option of a service residence/RA. Has anyone seen this DEFGRAM?  

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Perhaps invest in something other than residential property? Split the $100k between several managed funds/REITs, and or buy some shares direct.  

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G'day Brisbaneite,


You may acknowledge that you are a novice investor, but boy - for a young couple you sure have got your **** together - well done !!


You seem in an ideal situation to attack full on any investment of your choosing. If you are living in a nice house in a nice area for only $ 217 pw, with zero debt, no kids and 100K cash to your name.....that is a magnificent launching pad for something spectacular.


I certainly wouldn't restrict yourself to just housing.....your field of play is open wide, and with your partners likely various posting all over the country, coupled with all of the various hurdles to jump through to qualify for all of the Govt schemes, perhaps investing in something other than housing that can tick along nicely regardless of where you are or what your domestic circumstance is might be more fruitful.


The world is your oyster - go for it. Lovely to read about a young couple with their act together with not a bleat or whinge in sight. Top stuff !!!!  

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Brisbaneite said: ↑
I just wonder if we should ever, whilst he is in the ADF, occupy our own house. It seems more logical to my very novice investment brain that there is no point occupying a house that costs you $600 a week whilst someone else can do that and we can live on the cheap and therefore put more money on the mortgage. Am I way off the mark?Click to expand...
You've pretty much hit the nail on the head. Although you should focus on using money to buy more investments rather than pay off mortgages (at least in acquisition stage).

Also, this:

Dazz said: ↑
You may acknowledge that you are a novice investor, but boy - for a young couple you sure have got your **** together - well done !!Click to expand...
 

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Firstly, thank you all very much.

Roachy said: ↑
Schweedy unfortunately you don't get access to DHOAS unless you live in it for 12 months. Also, DHA houses are overpriced.

I heard there was a new clause somewhere about having a house in the same locality you are posted too. And that if it financially disadvantages you, you have the option of a service residence/RA. Has anyone seen this DEFGRAM?Click to expand...
Hi Roachy, yes I am not keen on purchasing DHA property either. I haven't seen the DEFRGRAM but will look on Tuesday and report back (I'm a nasty civi :p). Schweedy, even if we bought DHA and posted to the location we own it in, we won't get to live in it - it goes to the most suitable family and that might not be us anyway.

VYBerlinaV8 said: ↑
Perhaps invest in something other than residential property? Split the $100k between several managed funds/REITs, and or buy some shares direct.Click to expand...
Thank you VYB8, we intend to see a financial adviser in the next month or so, in the meantime I will look into the above to learn more.

Dazz said: ↑
G'day Brisbaneite,


You may acknowledge that you are a novice investor, but boy - for a young couple you sure have got your **** together - well done !!


You seem in an ideal situation to attack full on any investment of your choosing. If you are living in a nice house in a nice area for only $ 217 pw, with zero debt, no kids and 100K cash to your name.....that is a magnificent launching pad for something spectacular.


I certainly wouldn't restrict yourself to just housing.....your field of play is open wide, and with your partners likely various posting all over the country, coupled with all of the various hurdles to jump through to qualify for all of the Govt schemes, perhaps investing in something other than housing that can tick along nicely regardless of where you are or what your domestic circumstance is might be more fruitful.


The world is your oyster - go for it. Lovely to read about a young couple with their act together with not a bleat or whinge in sight. Top stuff !!!!Click to expand...
That is very kind of you Dazz. I know it all sounds positive but we really no nothing at this stage about investing so we have a very long way to go and lots of learning to do.

Mark Laszczuk said: ↑
You've pretty much hit the nail on the head. Although you should focus on using money to buy more investments rather than pay off mortgages (at least in acquisition stage).

Also, this:Click to expand...
It seems there is a slight consensus to purchase investment property that we will never live in nor could live in (eg. buy 30km min away from any possible bases he could get posted to). I think this will be cleaner that buying something in Brisbane suitable as a PPOR in Brisbane and then having to evict our tenants if we go back there (Roachy - my understanding is that if you get posted to a location where you own suitable housing, you must evict your tenants and occupy, is that correct? I wonder how that works in their lease, it seems pretty unfair for them).

Sorry to carry on even further but it seems so daunting making that first step. I look at R/E.com a lot. How do you nail down what will work for you? I will search the forum for 'getting started' type discussions.  

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Brisbaneite said: ↑
It seems there is a slight consensus to purchase investment property that we will never live in nor could live in (eg. buy 30km min away from any possible bases he could get posted to). I think this will be cleaner that buying something in Brisbane suitable as a PPOR in Brisbane and then having to evict our tenants if we go back there (Roachy - my understanding is that if you get posted to a location where you own suitable housing, you must evict your tenants and occupy, is that correct? I wonder how that works in their lease, it seems pretty unfair for them).Click to expand...
You don't have to evict your tenant, you would just lose your entitlement to a DHA house or RA if it it is within the 30Kms area....  

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I'm positive a DEFGRAM or formal advice came out about this situation. Where if it financially disadvantages you and your family, that you can reside within a service residence/RA. I will try find it in the coming days and provide you a DEFGRAM No. I currently have three properties within Defence locations (two in Brisbane and one in Toowoomba) and thus this is a problem for me in the future.

P.S. Where is your husband working this year? I might know him.  

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