20 and eager to enter the market!

Discussion in 'Investment Strategy' started by AlphaBGamma, 18th Sep, 2021.

Join Australia's most dynamic and respected property investment community
  1. AlphaBGamma

    AlphaBGamma Member

    Joined:
    17th Sep, 2021
    Posts:
    11
    Location:
    Liverpool
    Hi everyone!

    I'm looking to enter the property market as a SWSydney-based 20 year old earning $75k. I'm really eager to jump in to the market ASAP to maximise my 'time in the market.'
    Also noting that I've been working for the same business financier for 2 years and have just gotten a promotion to a new role, so I believe it's safe to say I have steady income/employment.

    I'm setting my budget at < 500k to purchase as an owner-occupier so I can benefit from the first-home buyer schemes. I intend to live in it for 6 months before leasing it out and moving back home/rentvesting.
    I'll only be able to offer around $10k as a deposit, however am extremely fortunate to have my parents available as guarantors.

    I'm very open to moving interstate as we have offices in Perth, Brisbane, Melbourne, and Adelaide.
    I've been looking mainly at Brisbane, in particular the nicer suburbs of Logan (Meadowbrook, Rochedale South) as I believe there is a lot of potential for CG and decent yields for an affordable price.

    I think I will also prioritise established houses oriented toward young families - good school catchments, friendly community, good infrastructure and government planning, proximity to public transport, and acceptable crime-rates. I'm also very willing to increase value in the property through renovations.
    I understand that units and townhouses are more in my price range, but I am not sure whether it is worth investing in these properties given their lesser potential.

    This is the strategy that I think fits me best at the moment. My hope is to get an early start on my portfolio and build equity in this IP that I can use in a few years when I am looking for a family home PPOR. So, capital gain is quite important. Rental yield is also fairly important I think, as I'd like to maintain decent cashflow in my youth and also because negative gearing may not be as beneficial to me in this lower tax bracket.
    Other strategies I have considered are buying an IP outright, foregoing the FHB benefits but greatly increasing my borrowing power.
    Or, perhaps to just be patient and put everything in shares/EFTs/crypto for now while I increase my salary further (I will graduate from uni at the end of 2022 and am quite recognised at work so I expect it my salary will continue to grow somewhat rapidly.)

    Apologies for the long post! I'd really appreciate any feedback or advice around my strategy.
    I'm also looking for a mortgage broker who can help me kickstart my journey, so recommendations are also very much appreciated.

    Thank you so much everyone and all the best!
     
    Gypsyblood, Travelbug, Jingo and 3 others like this.
  2. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    I love your attitude, maturity and enthusiasm. Keep it up, learn as much as you can, work hard, invest and in 20 years or less you'll be sitting pretty.
     
    Last edited: 18th Sep, 2021
  3. Mulianto

    Mulianto ~~

    Joined:
    4th May, 2017
    Posts:
    1,161
    Location:
    Indonesia
    Damn the only thing I looked forward was the next rave party when I was 20 lol

    Anyway, do you know that you can still claim FHOG later if you buy an IP first? As long as you or your partner haven’t claimed any, you can still claim later on provided the program is still available though. Just saying if it is too inconvenient for you to move to Brisbane just to utilise FHOG and CGT exemption.

    I’m not familiar with Logan area as I haven’t been there, read lots of mixed opinions. But with Brisbane’s boom raging hard at the moment, they might as well grow too. But no rush, don’t overpay like I did on my first IP which I bought at the absolute top of the market and saw no growth for 5 years lol

    Best of luck, keep reading, utilise your borrowing power, set your strategy (buy and hold, or develop? But don’t develop in Logan though!) And I believe you’d do well!
     
    Last edited: 18th Sep, 2021
    AlphaBGamma likes this.
  4. Daniel Domingues

    Daniel Domingues Member

    Joined:
    12th Sep, 2021
    Posts:
    24
    Location:
    Sydney
    Go for it - Looks achievable, I just had a quick look and Meadowbrook seems to be more in your price range. I'm not really across the area but if the prospects for growth are in there there, then it makes sense as long as it is aligned with your objectives.

    I saw one online that is below the median price compared to similar properties and has decent yield.
     
    AlphaBGamma likes this.
  5. Truly Exotic

    Truly Exotic Well-Known Member

    Joined:
    21st Aug, 2015
    Posts:
    1,032
    Location:
    16.4944° S, 151.7364° W
    one piece of advice, make sure you stick to your guns and dont forget the big picture,

    know so many young people investing in crypto with no idea because "everyone" is doing it and "everyone" is becoming millionaires overnight
     
    AlphaBGamma and Sackie like this.
  6. Karina

    Karina Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    234
    Location:
    Sunshine Coast
    Just do it! Best start you could possibly have buying a property at 20. You will never look back. Time in the market will make your purchase at 20 a great success. I personally would not entertain putting your $$$$ in crypto and would go for the real estate instead.
     
    AlphaBGamma likes this.
  7. Hills123

    Hills123 Well-Known Member

    Joined:
    6th Jun, 2021
    Posts:
    160
    Location:
    Hills
    Well done on the initiative! I had the same mindset when I was 20, though I wish someone told me back then to not buy an OTP apartment (no matter how shiny and good it looks) - so l’m passing on that message :)
     
    AlphaBGamma likes this.
  8. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,380
    Location:
    Qld
    You are 20!

    Save hard, and when this covid stuff dies down enough, strap on a backpack, get out there and see the world!

    I spent over a year in my late teens on a working holiday around New Zealand - now retired, it remains one of the highlights of my life.

    You are only young once.
     
  9. MrsNixba

    MrsNixba Well-Known Member

    Joined:
    2nd Aug, 2015
    Posts:
    108
    Location:
    Sydney
    Great advice and I was given the same advice.

    I didn't listen.

    Flipside - I'm now 32, married, couple of kids and life is pretty flaming pretty.

    I have friends still struggling to enter the market - they spent their 20s enjoying their youth. Good on them - but then along came COVID and their house of cards crashed.

    We will travel in our 40s. In style. Without stress. With a future locked in.

    Pick a lane, neither is right or wrong, but I didn't like the idea of spending money today assuming more would come tomorrow. You're only young once, yes. But life is long and you can fit it all in.
     
    Gypsyblood and AlphaBGamma like this.
  10. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    You can do both if your clever. Moderate your trip so it's not breaking the bank and get your first IP.

    I think it also comes down to personality. When I was 20 I was so obsessed with wealth creation the last thing on my mind was friends and travel and I put them off completely till around 30. I have no regrets.
     
    Gypsyblood, Jingo and AlphaBGamma like this.
  11. Trainee

    Trainee Well-Known Member

    Joined:
    24th May, 2017
    Posts:
    10,258
    Location:
    Australia
    Depending on your work, you can work overseas instead of just backpacking, and build wealth at the same time.
     
    Jingo and AlphaBGamma like this.
  12. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    3,346
    Location:
    Brisbane
    I should have been like you.
    The money I have wasted on cars and holidays when I was young .
    I could have put more into property and been rich.:(
     
    AlphaBGamma likes this.
  13. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    From your commercial holdings you sound wealthier than most. Couldn't have done too bad plus you had the cars travel!


    Now the women.....ah....well not all things were sacrificed :D
     
    AlphaBGamma likes this.
  14. thunderstrike888

    thunderstrike888 Well-Known Member

    Joined:
    6th Jan, 2021
    Posts:
    2,018
    Location:
    Sydney
    Starting in your early 20s into the RE game will be the BEST thing you do in your entire life. Your going to reap the rewards in 10-20+ years and be laughing at all your mates currently who are spending all their money on raves, going to posh restaurants like Momofuku and buying expensive cars.

    You got your head on straight. One thing is try to keep motivated and the momentum going. Property is a slow game and there are definitely down times (for instance when 2-3 houses all are empty and no rent - yes it happens sometimes) but never forget the long term picture.
     
  15. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,380
    Location:
    Qld
    At 32 I was married, 3 kids, in our own (second) home that was more than 50% paid off. Life was great!

    I returned from NZ aged 19, met my future husband when I was 20. Both saved hard, bought a block of land, married at 22, built first house age 24, first kid age 27 when I gave up work for 10 years before returning part time.
     
    Gypsyblood and AlphaBGamma like this.
  16. Beano

    Beano Well-Known Member

    Joined:
    7th Apr, 2016
    Posts:
    3,346
    Location:
    Brisbane
    Yeah don't stop building your portfolio.
    No matter what happens just keep going.
    It's a long journey but there are great rewards in the future.
     
    Jingo and AlphaBGamma like this.
  17. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,331
    Location:
    Perth
    AlphaBGamma and Sackie like this.
  18. Desperado

    Desperado Active Member

    Joined:
    13th May, 2016
    Posts:
    30
    Location:
    Sydney
    Congrats on getting started!

    -get as much parental help as necessary, don't be too proud to ask parents and take advantage of their kindness
    -live at home as long as possible
    -get a good broker, they'll help you decide on FHOG, yields and determine your investment strategy
    -debt is king, take as much of it as possible
    -you've shown you done your research and you're talking the right areas, trust your judgement

    Most importantly, go see the world. Whether you're financially free by 30 or 31, big difference. When you're still young enough to be naïve about your surroundings, carpe diem
     
    thunderstrike888 and AlphaBGamma like this.
  19. AlphaBGamma

    AlphaBGamma Member

    Joined:
    17th Sep, 2021
    Posts:
    11
    Location:
    Liverpool
    I think I've decided that I'll definitely buy as an owner occupier after weighing up my options (CGT, FHOG) and I hope to gain some independence living on my own for a while as well.

    I'm not SET on Logan yet - really just looking for areas around Brisbane that meet my budget and offer potential capital gains in the next few years. I may be asking for too much, but I'm doing my research!

    Also, just a quick question - why do you advise against developing in Logan?

    Thanks so much for your input :)
     
  20. AlphaBGamma

    AlphaBGamma Member

    Joined:
    17th Sep, 2021
    Posts:
    11
    Location:
    Liverpool
    Thanks for the advice! Definitely trying to focus on the big picture and my long-term goals.

    Also on the cypto - I'm definitely viewing it as more of a punt - I acknowledge that it's essentially gambling haha.