澳洲Australia property Would you do this?? Need quick advice | S


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 Guys,

I am looking at buying my own property because I am sick of paying rent. I am not a first home buyer.

I have found a property for $265,000. It is not the kind of property I would want to live in but I would be willing to live in it for a couple of years. It is smaller than I like and the rooms are small. But it is cheap.

What I am thinking is to buy the property and live in it for a couple of years so I can stop paying rent. Mortgage repayments are in line with what I am currently paying in rent. In a couple of years look at renting the property out and move into something which I will be happier with. As the property is at the moment it would rent for approx $300 - $320 per week.

There is also a 4 car garage at the back of the property which could be converted into say a 2bed granny flat (council permission of course) and this would then rent for say $200 per week.

Would you buy a house you didn't particularly want to live in and live in it for a short period of time, if it has quite good rent potential for the future?  

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mins said: ↑
Hi Guys,
Would you buy a house you didn't particularly want to live in and live in it for a short period of time, if it has quite good rent potential for the future?Click to expand...
no!

but given your circumstances then probably yes.  

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Hi Min

I have heard it said that you should buy with your long term intentions in mind, not the immediate.

So if thats appropriate for you AND you know for sure u can get the granny built, approved and rented, this may work for you .

Whats the CG situation like there ?
ta
rolf  

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Capital gain imo should be ok. Rental market here is extremely tight and achieves good rent. It is in a large regional town nearby to other towns with strong mining and education employment.

I wouldn't be investing solely for CG it would be a hold strategy with preferrably most properties neutral or positively geared.  

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I think you are doing a smart thing.

My first home was certainly not one I wanted to live for the rest of my life.We stayed 2 years..sold it, and built our own home.  

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I agree with Kathryn that this is a smart move.

Our first home was by no means our ideal home, but it was our first step on the ladder. Property values at the time were kind to us and we sold 4 years later for twice what we had paid, enabling us to buy the home we have lived in for 32 years.

Buy the property. Spend the time you are living there to do it up, develop a low care garden, see if you can rent out the garage for storage (if possible) and get an offset account to start saving for a home more suited to your long term plans. Get the approval for the granny flat conversion. All add value.

Many people starting out want it all - 4 bedrooms, 2 bathrooms etc. and finish up saddling themselves with a huge mortgage.
Marg  

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Im with Katryn & Marg,

They have a longer term view. Whereas Im still in the middle of it now.

We bought the 700sqm block, plain cheap 3 bd,1b,1 garage + 3 car garage on the back. (opening up onto it's own lane) We neatened it up.

For the minute our granny flat dreams are on hold with council. However we rent the garage to a buisness for storage. While the house + 1 garage is rented to residential tenants.

We now live in a different house. Still not quite our dream house, but another step up and are looking to buy another IP.

When making these decisions.I know it's hard to guage where you would be otherwise. For a rough guide we have some good friends of ours. At the time of purchase, they earnt more than us and had a bigger deposit.

So while we bought "not our dream house, but smart move". In the same council area they spent an extra 100,000 to buy their dream house. 500sqm block, 4bd, 2 b, 2 loungerooms, a pool, outdoor dining and granite benchtops. (Not to mention they felt the need to upgrade their car to compliment their dream house.)

Our smaller loan and no car repayment allowed us to make extra repayments to our mortgage. Due to this we were able to invest. While they are still paying their minimum mortgage, car repayment and the upkeep and running costs of their dream house.

So if you can forego your dream house in the short term and settle for less, you have the opportunity to invest in a better long term position. :)  

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Dream homes constantly change..as we do, thru our journey of life  

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mins said: ↑
What I am thinking is to buy the property and live in it for a couple of years so I can stop paying rent. Mortgage repayments are in line with what I am currently paying in rent.Click to expand...
Hmmm, something fundamentally doesn't quite add up for me.

You'll have to clarify exactly what you mean by "mortgage payments". Do mean interest only, or the principal and interest payments = rent.

If the latter - I can see it has some merit.

If the former - your strategy makes no sense whatsoever. If that is the case, why deny yourself living in some rats nest, simply start your investing career right now and continue living where you are now.


For me, "dead rent money" is identical to dead interest payments on a non-tax deductable loan.  

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IMO if you dont like it dont buy it... saying that if you think its a good investment and willing to live there then do it

i agree with Cloudedhouse and the others
we all want the best but to get the best you have to start off small
i found a good house at a good price (not my ideal house) rooms are small needed a good cleanup but very structually sound and will be living here for a few yrs till i find something better
it then gives me the option to rent it out for 6yrs as my PPOR and find a decent place to rent in the mean time while looking at purchasing another IP and maybe a new PPOR 6 yrs down the track  

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Dazz,

Tend to agree. Just to clarify I pay $375 per week in rent at the moment. In March I envision that this will go up to potentially $385ish per week when we come off our lease period.

Repayments at P & I on this place I want to buy is approx $370 per week at a nominal rate of 7%. Interest only payments would be approx $315 per week. Rent I could receive right now if I do nothing to the property is approx $300 per week house only. There is a rental shortage where I am so I am sure that I would be able to rent for $320 per week as is now on private arrangement. Hence covering IO payments anyway. Once garage is converted to a 2 bed granny flat it will return quite a healthy rental yield.

I also feel that by putting in a split system and built in wardrobes, updating the lino in the kitchen to tiles, tidying the garden up a fair bit and putting a wall back up I should be able to rent for a min of $350 per week based on comparable rentals. Not a lot of money to be spent more just a bit of time.  

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Yes, take a leap of faith and see how you go... you'll always be able to live in it, and with that maths the sums seem fine. Renovating and building a granny flat to improve yield is a good option so long as you do your sums and don't over-capitalise.  

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I think this could be a great investment, if you've done your research and you know the market in that area. Property values will start to go up in time, as they always do, so you will make some gain just by owning the land. If you're prepared to sacrifice a more comfortable living situation, in order to get ahead, then you should go for it.  

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