21 Years Old | Buying First IP Advise? (VIC)

Seems like, in my opinion, that you are limiting yourself.

You only want cash flow positive properties BUT you mention that you're investing for capital growth, only new stock not existing, ONLY within 15km of Melbourne - they are just a couple of conflicting and limiting ideas just there.
Also not interested at all in diversifying asset classes, so putting all your eggs in one basket so to speak.
You love property yet have not owned any yet?

Where did you get the Mortgage Establishment fee of ~$2500?
Mortgage Insurance is more like ~$12,500

Borrowing the deposit is not really do-able unless using your parents property as security. Even if it was possible to get an unsecured personal loan for the deposit your borrowing capacity would be severely affected.

Have you spoken to a broker about mapping out how you're going to accumulate multiple properties? ie. order of lenders to use etc
It's not a simple as it was 5 years ago but not impossible.

 

no.

 

This 7.7% is the commission you’d pay to the property manager for managing your property on your behalf.

The question was, is person who found you the property, are they charging you anything for finding the property?

 

And if they are not charging you, who are they charging? Whose best interests are they acting in?

 

For my first one i want it to be a new one so i have that security that it won't require maintenance. I wanna target that area because in 20 years it would be highly scarce to buy anything there i hope.

In the future i'll also target similar properties which are either really close to the city or in south-eastern suburbs or bay-side and i'll target suburbs which are surrounded by blue chip suburbs.

I love the idea of owning a large portfolio or even couple properties fully paid out providing me cash-flow every month while i'm on vacation.

 

New properties dont need maintenance? You know this because you have owned both new and old properties? Or ‘your’ agent said so?

too much hope and love.
Not enough know and understand.

 

In theory it sounds great right, sit back on vacation and collect rent? Like a fantasy. Property isn't that 'hands off' in reality though, eg wait until a tenant trashes your new place or you have a burst pipe etc. Even new properties require maintenance. Brand new properties have agent comms built into the price generally, so you could be going nowhere, valuation wise for a few years... Buildings depreciate, land appreciates, the more land portion you have the better capital growth (in general terms)

 

Whats more noticeable, a few marks on a freshly painted wall? Or a few marks on top of a couple old ones?

 

My property manager checks the tenants history and if they have never rented before they automatically get rejected. They've taken people to vcat before as well.

I agree, i'm prepared if anything like that happens but there's more chance of that happening in a old property. That's true that land appreciates, but for us Millennials we have to start somewhere and i'm pretty sure town houses in good suburbs are the next wave for property investing. If i look for an old house with big block of land that'd go way over my budget but it'd definitely be good to own if it's in a good suburb.

My broker said i have to use the full 100k towards the loan so that might be because of the Mortgage insurance maybe? Dw i'll make another thread before closing on a deal and also consult other brokers too.

I'm not a fan of borrowing the full deposit anyway but it might be helpful for others out there. \

My strategy is to take equity out from my property and use it to buy another one. I will keep a buffer for safety so i won't use the full amount of the equity.

No i haven't discussed about the orders of lenders yet.

Also i'd love to avoid this owners corporation fees, how would that be possible? Would i need a townhouse on a single block of land for that?

 

The company selling me the property are the property managers themselves. Not sure where there commission for selling the property is however.

 

I know they do, but they wouldn't need as much maintenance as an old one.

 

I'm also going to use my FHOG towards this property because it would help me with the stamp duty and save me money, then i'll advertise it to be put to rent when i've completed 1 year in the property.

 

Do you know what that does to your depreciation deductions on plant and equipment?

 

How does a person develop this many strong opinions that 'sound' logical, but not based on experience? Have you been to a property seminar, by any chance?

 

Hmm, no i don't. It would save me 10K or more from my pocket at the end of the year, since i'd have to make the repayments for the loan if i get the FHOG.

Would i still get the depreciation after when i put it on rent thogh?

I'll be sure to ask them.

 

Were you planning to claim depreciation, interest and everything else on your tax return while you are living in it?

 

i suspect this tells a lot

at least OP has done some research, pretty decent for a first time buyer at 21

and like most 21 year olds is looking for "advise" and not "advice"

 

I haven't been to any seminars, i done research by myself and Australian property market seems attractive to me. I believe it's better than the house markets in USA for capital growth.

Plus land will be there 100 years from now, i can't say the same about stocks or bitcoins etc.

No, i would claim all that stuff if it would be on rent. I'm asking that if i claimed FHOG and lived in it for 12 months and then put it on rent, can i claim all those deductions then?

 

Considering your strategy depends on depreciation deductions, why dont you know? And if you dont know about this, how sure are you about everything else?

 

this spreadsheet in particular is what @Trainee is talking about

first time buyer, 21 year olds dont come up with spreadsheets like this,

I have never ever ever done a projection spreadsheet like this,

anyone who uses/refers you to ones of these, has an agenda PERIOD