澳洲Australia property Young investors - tell all #2 | Sydney


在澳大利亚 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 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


Hi All,

Been lurking around for a bit and found this thread and thought it'll make a good 1st post.

I'm 24 and bought OTP in 2009 a 2 level apartment, aprox 100m2 with balconies. The location is A1 (Caulfield South) bought for 480,000 already valued at 600,000 but i think thats a bit keen, I'll be happy with 550,000 :)

Completion expected march 2011, I'm forecasting valuation of 580,000 by then. Pretty excited as this will be my PPOR to meet FHOG conditions and then depending on the market will either sell or turn it in to IP and move on.

Good to see all the other proactive Gen Ys on here, looks like we are not all lazy and spoilt.  

评论
Hi fellow forumites...

Well I've been lurking on these forums for a while now and have learnt a lot from the reading I have done on here. I thought I would stop lurking and add to this thread.
My first purchase was a commercial IP in '07 with a bit of help from the olds. Purchased for $350k. Haven't had a lot of capital growth, but I would think it is valued somewhere around the $400k mark now. If I had my time over again, I would do things slightly different as I am paying P&I on this. The good thing is that the lease covers most of the outgoings with approx $200 coming out of my pocket a month to cover the difference.
I used the equity available in the CIP as a deposit for a resi block in '08, and have since built on that. I am currently living there to meet FHOG conditions, although have recently put this on the market.
I have also had an offer accepted on another resi block, so am in the process of organising finance for the new purchase.
Looking back there are a few of things I would have done differently, but having just turned 27 yesterday, I feel I'm not doing too bad.

As zed_kid mentioned, good to see there are a few of us young 'un's around being pro-active.  

评论
Hi Guys,

I'm 22 and bought my first property at 19 on the Gold Coast for $458K back in 2008 right at the top of the property bubble :( which is my PPOR. Have been vigorously paying it off with godlike resolve. Reduced my Loan down to from my memory i believe is about $115k-$120K.

I settle this month on my second property purchased for $442k, very undervalued from a distressed seller (market value $520k). Is currently rented for $480 a week leaving me about 100 or so out of my pocket a week.

I really struggled early on with a lot of people telling me i couldn't or shouldn't do it.

I'm hoping also to find another property to pick up before this year ends but i really do think i'm nearing the extent of my servicing capabilities so its time to get creative. Just wished i could do more, really bugs me doing nothing or letting the market grow to create wealth. Sitting on my hands is a tactic that i imagine really bothers us all.  

评论
You did good to buy a 458k property at the age of 19 a.cashin! Good work with the 2nd purchase aswell.

I know how bad it feels to sit on your hands and do nothing, thats basically what we are doing at the moment - well until we earn more money and finish our renovations, then we will move out to rent and rent out this place. Hopefully release some money.

At the moment it feels like we are getting no where even though we are constantly doing work to the house. People probably will look at what we have done so far and think that we have overcapitalised and should have left the renovations to a minimum. It's not like we have done anything extreme, we just have plans to make this place a really nice and livable home. At the end of the day, I think I will rather have something that I know has been renovated well and cost a bit more then have left things for later and etc.

On good news, the place we bought is only a 5-10 minute walk out the centre of our local town - the area has 'predictions' to grow to over 250,000 (390%) over the next 25 years compared to Campbelltowns predictions of 59%.

I know this is only a prediction but it does give us good hopes about our properties performance in the future!  

评论
My property life so far

Hello all,

I joined the Army in 2003 straight after school and was on a measly wage of 18k. I decided to go halves with my father in a unit at Kangaroo point at the early age of 17.

Unfortunately we had to sell this unit 12 months later, due to my dad getting divorced to his second wide. We made approximately 15k each which allowed me to live life a little (well as much as you can in Canberra).

I met my soon to be wife in 2004 and we rented in Canberra until I was posted to Brisbane in 2007.

We bought out PPOR in January 2007 at Ferny Hills. We bought it for 332k, which gave us a sturdy 3 bedroom, 2 bathroom brick house which has a lot of potential for a renovation later on. This property has been our best for equity and was recently valued by the bank at 430k.

We decided a year later in mid 2008 to buy an investment property at Stafford Heights. This has been an interesting property. It is a 3 bedroom, 1 bathroom place with a lot of 'Queensland Character (its affectionately known as a baby Queenslander). Its located on a main road, but what I like about it is it has views out to Redcliffe Bay, which I thought it would appreciate in value. Unfortunately not. We bought at 343k and it was valued (by bank) at 380k.

2 months ago we bought a large block at Toowoomba in one of the best suburbs; Rangeville. This has a newly renovated 3 bedroom, 1 bathroom house on it, which had been lot-configured and had a DA for a multi-dwelling premises at the back. Currently, we are building the duplex. We bought this property for a steal I believe at 315k. And could potentially be valued after the duplex building at 960k. *Fingers crossed*

At the end of this year once the duplex is built, we will have 5 properties within 3 years, which I see as a massive achievement for me and my fiance, aged 25 and 26 respectively.

Our goal is to have 10 rental properties in 10 years.

Roachy  

评论
JIT said: ↑
Hi there,

I just turned 30 and started my buying at 25, so 5 years in the game so far, and now have 5 X RIPs at just on $3M gross value.

Thought I'd put my 2c in before I hit 31 and miss the"young investors" cut-off!

It's interesting to share notes with other youngsters.Click to expand...
JIT - that is a great effort to have $3M worth of RIP by 30.

Do you mind if I ask what the portfolio cashflow is like p.a. ie how much you have to fork out each year, before or after tax.

Cheers.  

评论
I've missed the last couple of posts on this thread... wow... inspiring reading!

Anyone have any upcoming purchases up their sleeve?

As for us - because I'll be going on unpaid maternity leave for a year, we won't be buying anytime soon. That suits us anyway - because the area where we have been looking in has appreciated enormously and no longer represents good value. I don't mind too much though, because this is where our PPOR is. In less than 2 years our PPOR has appreciated $160k, sure beats working :D

The other IPs have appreciated about $50k in the last 6 months (which is when they were bought) which is fair enough. Time will work its magic :) Both IPs are CF neutral to hold so there is very little drain on our hip pocket.

Has anyone run into serviceability walls yet? I'm wondering whether I'll be reaching that stage soon - because when be buy IP #3 next year, we'll already have 3 properties (PPOR + 2 IPs) but a much depleted buffer due to the year of unpaid mat. leave.

I suppose the serviceability wall is another thing that will be easier to overcome with time... when our incomes rise...  

评论
I've changed from Resi IP to shares (keeping existing IPs)


- Lenders mortgage insurance is getting ridiculous
- Yield on shares is about double of resi IP
- no jumping through 20 hoops to get $$$ (margin loan)
- No stamp duty, legals
- more liquidity.

I haven't had the 160k growth that you've had on one property in 2yrs

Based on actual valuations i've probably had 10% growth (120k). Slightly higher rental yields but this has come at the price of growth.  

评论
Interesting post, Ridin-High... a good reminder that PI is not the only vehicle out there... there's also shares, managed funds etc.

I was heavily invested in shares between 2004 and 2008, when I took the profits for the PPOR deposit. My current exposure to shares is via a few managed funds, direct shares, and mostly superannuation.

I prefer property though... even though liquidity is lower, it's generally less volatile than shares, and you don't get margin calls.

If I were to trade shares again I would not be gearing due to the risk of margin calls etc. - so for that reason, property suits me - allows me to gear without excessive risk

Ridin-High said: ↑
I haven't had the 160k growth that you've had on one property in 2yrsClick to expand...
And we only put down a 15% deposit of around $80k... so the ROI is quite good. I'm sure it can be done with shares too, but I haven't the nerve after the GFC!  

评论
Suppose I should post up my list (along with DH's)

I'm 30, DH is 32.

Here are our purchases...
Mine
2003 $130k 3 bed 1 bath house (4077)
2008 $104k service aptmt (4066)

His
2008 $260k 2 bed 1 bath townhouse (4109)

Ours
2010 $251k 2 bed 1 bath house (4300)
2009-2010 $440k 4 bed 2 bath built PPOR (4077)

Our plan is to eventually sell the service apartment & buy 7 more properties in 10 years.  

评论
tess85 said: ↑
Has anyone run into serviceability walls yet? I'm wondering whether I'll be reaching that stage soon - because when be buy IP #3 next year, we'll already have 3 properties (PPOR + 2 IPs) but a much depleted buffer due to the year of unpaid mat. leave.Click to expand...
tess,

A very good tip given to us is to get the biggest LOC you can get prior to going on Mat leave, as this will be your highest level of serviceability for a while. Doesn't matter if you don't use it for a long time, but much better to have it there ready.  

评论
thanks for the tip Ski-bum!

Welcome joko! You must have seen some decent CG from that first property you bought in 2003. As for your plan, 7 properties in 10 years sounds doable, but what's your ultimate end goal?  

评论
tess85 said: ↑
Interesting post, Ridin-High... a good reminder that PI is not the only vehicle out there... there's also shares, managed funds etc.

I was heavily invested in shares between 2004 and 2008, when I took the profits for the PPOR deposit. My current exposure to shares is via a few managed funds, direct shares, and mostly superannuation.

I prefer property though... even though liquidity is lower, it's generally less volatile than shares, and you don't get margin calls.

If I were to trade shares again I would not be gearing due to the risk of margin calls etc. - so for that reason, property suits me - allows me to gear without excessive risk



And we only put down a 15% deposit of around $80k... so the ROI is quite good. I'm sure it can be done with shares too, but I haven't the nerve after the GFC!Click to expand...

Yeah i've only ever put 5% of my funds on the table and hence been hammered with LMI charges.

I think at the moment, if you have a diversified share portfolio and only gearing 40-50% the chance of a margin call is extremely low (my personal gearing on shares at the moment is 63%)

My overall portfolio (property/shares) gearing is pretty high (around 85%) so my focus at the moment is around reducing that abit and building some cash buffer.

I don't really count my super as an asset, because i plan to be long retired before i can access it.

But yeah plenty of ways to the top of the mountain, i won't count it out completely but at the moment i can't see myself purchasing anymore residential property  

评论
Ridin-High said: ↑
I don't really count my super as an asset, because i plan to be long retired before i can access it.Click to expand...
Yep - absolutely agree with this - hubby and I plan to be retired by 35 :D However he does get massive super contributions (close to 24%... the benefits of working for a uni) so I'm still factoring it in as having a fair bit of long-term exposure to the sharemarket. It will be a nice boost to the retirement when we can access it at 65!

Ridin-High said: ↑
But yeah plenty of ways to the top of the mountainClick to expand...
Exactly - whatever floats your boat, really :)  

评论
Hi

A few newbies have contacted me over the past few months to hear my story. My story from 2008 until the present. Instead of replying by pm I decided to post my answers here so others can read too.

I'm not in my teens or 20's. I'm in my late 30's but i'm more like a 20 something year old! I bought my first property my PPOR at the end of 2008. It is a studio unit in Highgate for approx $250 K at Market Value. Great little unit, great location being just 3 km from Perth’s cbd. 30 Minute walk to the cbd of Perth. Close to Mount Lawley café strip and East Perth. I really enjoy living in Highgate. I walk to and from work and often will walk the long way home alongside the river.

I financed this with help from my parents. They gave me a leg up in life with a 25% deposit. They said they would rather help me now than leave it to me in their inheritance. I have an IO loan (with an offset account) on my PPOR and one day will turn it into an IP.

In 2007 when my rent increased on the place I was living in I decided that it was time to buy my first place. My parents let me move in with them for a year at the end of 2007 so that I could save for a deposit. What I didn’t realise at the time was that I didn’t end up having to use any of my savings for the deposit as my parents put the money up! This gave me a huge head start. I was so very grateful to them. I will repay there generosity in the future and help them financially in retirement. They are going to need the help! I was able to save around 60% of my pay a fortnight as I was living very frugally with few expenses. Whilst living at mum and dads in 2008 I heavily participated on somersoft forums, educated myself online and with books, seminars etc. By the time I bought my ppor in September 2008 I had around $20 ish K in savings. I think it is so important when starting out as an investor to have a good solid buffer. This has been crucial to my SANF and has helped with expenses as well as the money needed to go about buying number 2 property.

After I bought my first one I was itching to buy my 2nd property, my 1st IP. 1 Year later in 2009 I bought my next unit in Dianella. This time a 1 bed unit in a good location close to Morley, Bedford shops, bus and 7 km from Perth’s CBD. Cost $210 K. This is what I could afford at the time. I used that massive deposit mum and dad gave me to buy my first ppor and leveraged into my 1st ip but I also had to chip in $11 K of my own money as ANZ wouldn’t let me go above 80% LVR. I cross-collateralised. My PPOR was valued at $260 K. I wasn’t expecting to have fork out any of my own cash, I nearly had 2nd thoughts about going ahead with the purchase, but something inside me was telling me to go for it!!! I listened to that voice. I was a bit stressed too that I had to pay for stamp duty as well. This is where the stamp duty loan helped with my SANF. I am so glad I have such supportive parents. Mum and dad offered to loan me 5 K to pay for the stamp duty. I will have that loan paid off by December. They have been right behind me from the very start!! Love them. Anyway, my buffer took a hit but because I had saved so hard I still had around $15 K left after it all. So SANF is still good.


I was able to get a tenant after just a few weeks. She has been a really good tenant. Atm my ip is negatively geared by about 2 – 3 K pa. after tax. I will know more after my tax return. So it is not costing much to hold. I am looking to increase the rent by $10 a week in 6 months time and will get $230 per week, with a loan of $199 K on it. I’m thinking when I get $270 per week it will be neutral but im not sure. It’s all a learning curve for me.

I am excited to be visiting my accountant next week. I have prepared all my documents for tax time and look forward to this learning experience that is coming. My first consultation with my accountant about 4 months ago was informative. He suggested that I buy a villa as my next IP. I will have to weigh it up and see if I would be able to afford it and if it would set me back longer in buying my next one because it would be heavily negatively geared. It might be a smarter option for me to go for a 2 bed unit around the 280 K mark than a $320-$350 K villa.

My goal is to buy my 2nd IP in 2012. By then I will have seen some appreciation of both of my properties to provide the deposit I need and my goal is to have saved another $10 K by then. It will be another Perth IP. Perth I believe will positioned nicely for some good CG come 2012.

2010 has been the year of concentrating on my health, my social life, work and personal development. I suffered from soreness and injuries this year and by around April I had hit rock bottom. I was f**** determined to lose this weight of mine. Since April I have lost 11 Kilos. I have lost 10% of my body weight!! I am so proud of myself! I have been attending weight watchers meetings and exercising and you know what I am applying the same desire and faith that I have with my finances with my weight loss. I can visualise myself thin again out there playing sport and running fast like the others. Not having to drag this weight around anymore, not being sore. I have another 18 kilos to hit goal weight. As an incentive to get to goal weight I decided I would reward myself with a laptop. My computer needs upgrading soon anyhow, its getting slow. I find rewards along the way really help.


I haven’t been saving this year as I have been paying off my stamp duty loan, ip expenses... been basically enjoying life having fun, letting loose for a while. I have also been working hard on my self development. My spiritual side. The last 8 months have been very tough for me. A lot of workplace conflict. I don’t regret any of it as I have learned lots of life lessons. Have grown and become a stronger more positive person. The stuff that has been going on at work has also helped me in my personal life immensely. The timing of these incidents have been amazing. A couple of people have come into my life just at the right time for me. With the way my work and personal life was going. They have been like my guardian angels... to be there to help guide me!



I think though once I have paid off that SD loan I will set myself the goal of saving 20% of my pay a fortnight. I am determined to again have a $20 K buffer before I buy my next ip. I need that SANF. I do not earn that much, just below average salary $50 K pa Gross. and I’m ok with that. I’m happy with my job. It gives me time to concentrate on my investments plus the job is not stressful at all. The important thing for me is to take care of my health and that means not having a stressful job. My goal is to be able to choose to retire in 19 years time. I am aiming big. Determined to buy 20 properties. That’s the magic number!! Then I might sell a few to pay down the loans.


I think it is really important to have a balanced approach with life. Dont get too obsessed with any one thing in your life! Property is our passion but just dont forget to enjoy your life as you live it. Have a balanced life. Dont let every waking 2nd be that of property. In the beginning I think us newbies tend to get very obsessed. I was like that for the first couple of years. Property is still a huge passion and I am still very driven in life and is a dominant thought in my mind but it takes its place in my life. I have other just as important things in my life. My mates, my sport!! my family, my... self! I guess what im saying is dont limit yourself.. enjoy yourself. Dont be too 1 dimensional as some of us have been and as I was for a while there!



Oh I forgot to answer the below questions

a) What's your investment strategy?

My investment strategy at this point in time is to buy what I can afford 3 – 8 Km from Perth’s CBD. Because I’m on $50 K pa I go for properties that are not going to be too much of a strain on my cashflow. Small units that are not too negatively geared. My goal is to buy and hold every couple of years when I can afford to do so. I try to buy below market value if possible or a fair market price in a good location.

b) What type of properties do you own and plan to own in the future?

I own a studio unit, and a 1 bed unit. I plan to own a 2 bed unit or villa as my next ip or a 1 bed unit that is over 50 sqm so that I don’t have to find that 20% deposit and I can have a higher LVR. My properties in the future will always be below the median value for the suburb. FHB properties as these are the properties I can afford to buy and hold onto.

In the distant future perhaps, 15 – 20 years time when I have built up some capital I may buy a CP or develop (renovating or subdivide/build) This might be my hobby when I have retired from work!


c) What are your thoughts on the following: living at home or worst case renting in a nice suburb whilst buying assets elsewhere? From all the options considered, everyone keeps telling me this is the 'best way to get ahead quickly'.

I wont live at home again! Lol If you are young though, I reckon make the most of it whilst you can stay at your parents and save hard whilst you have this great opportunity.

I have thought about renting somewhere whilst buying ip’s. In the position im in though I’m financially better off to live in my PPOR. Currently I’m paying only around $210 a week to live in my ppor. The only reason I would rent something myself would be if I wanted to move closer to my family. Actually I would probably break even if I rented because then I wouldn’t have to pay rates, water, maintenance, fees etc. I wouldn’t buy my PPOR there because it would be more expensive to afford it.

:)  

评论
APK - thanks for posting your story.

A quick question, if you don't mind. I think it'll be beneficial to newbies and young investors alike.

Why did you cross collaterise your loans? Do you regret it? Surely there was other options with alternative lenders??

Cheers,
Steve  

评论
Steven Fulop said: ↑
APK - thanks for posting your story.

A quick question, if you don't mind. I think it'll be beneficial to newbies and young investors alike.

Why did you cross collaterise your loans? Do you regret it? Surely there was other options with alternative lenders??

Cheers,
SteveClick to expand...
Hi Steve :)

Thats what my mb recommended at the time.

I was keen to buy. At one stage I was having 2nd thoughts about staying with my mb but I kept with him because there was a property I was interested in and if I went to another mb I would have to go through the whole process again which means I may have missed out on an appotunity to buy. Plus I didn't want the extra stress and hassle. Probably not a good reason but I just wanted to get one under the belt.

I have learned from this. Next time I will get my pre-approval sooner. I dont regret x-col because I was able to buy my ip and at a reasonable price. Not sure what I'll do next but I have the option of making them stand alone loans once they have grown enough in value. I'll see what works best for me next time. I'll be getting a new mb next time.

If you have any more questions fire away!! :)  

评论
Alex P Keaton said: ↑
I'm not in my teens or 20's. I'm in my late 30's but i'm more like a 20 something year old! :)Click to expand...
APK
I thought you were in your 20's goes to show you are only as old as you feel.

Great enthusiasm in your posts!


Kind Regards
Sheryn  

评论
Alex P Keaton said: ↑
Hi Steve :)

Thats what my mb recommended at the time.Click to expand...
My feet would have been three quarters of the way out the door before he finished. At least you've got some flexibility. My concern was that it would have dire implications in time, but for your sake, I hope not.

Do you use a broker from this forum? More importantly, do they invest in property and have a large portfolio? That would be the question I'd be asking if your looking to change.

Cheers,
Steve  

评论
Steven Fulop said: ↑
My feet would have been three quarters of the way out the door before he finished. At least you've got some flexibility. My concern was that it would have dire implications in time, but for your sake, I hope not.

Do you use a broker from this forum? More importantly, do they invest in property and have a large portfolio? That would be the question I'd be asking if your looking to change.

Cheers,
SteveClick to expand...
I cant understand why cross colat will be a bad/negative in this example given??

Can you please xplain why steve youd be out the door??  

Property Investment

Australia property Selling Hints | Sydney

澳大利亚Hi folks I recall ready somewhere about what are some simple tricks for making your place more attractive during a home open. Im seriously thinking of selling my little pad and want to maximise my efforts. Any hints greatly appreciated. 评论 ...

Property Investment

Australia property Re-zoning | Sydney

澳大利亚What would the chances of a NSW Local Council allowing a community titled development (homes, community buildings, etc) on an area zoned Protected Agricultural land? Does anyone have experience in this area? Looking at the local council LEP, ...