Join Australia's most dynamic and respected property investment community

Advice on our first property purchase and plans

Discussion in 'Where to Buy' started by armory, 26th May, 2016.

  1. armory

    armory New Member

    Joined:
    26th May, 2016
    Posts:
    3
    Location:
    Central Coast NSW
    Hi all,

    My partner and I are currently renting on the Central Coast, NSW. We have never owned property, and would like to make our first purchase (PPOR) early next year.

    I work remotely for an American company in the IT field, which puts me in the nice position of being able to work anywhere that has a solid internet connection. My partner works in retail management, so should be able to find work in most places. We are quite happy to move elsewhere, potentially even interstate to somewhere we can have a good lifestyle without paying through the nose for a property.

    We've been saving hard, and currently have about $60k saved up as a deposit. Should be around $80k by the time we are ready to buy. During the time we have been saving, prices have shot up to the point that I feel priced out of our current area which is why we are looking elsewhere. Originally from Sydney which is out of the question now with prices, and it's become far too busy and crowded fro us.

    Some of our criteria are:
    - 3 bedroom house
    - suburb must have fast internet
    - prefer coastal to inland (we love scuba diving)
    - reasonable commute to town for my partner
    - warmer is better then colder so we're looking North

    I really don't like the thought of having a mortgage for 20 years. The plan is to buy a place for up to $400k, then pay it down over 5-7 years. Once we've got our PPOR sorted we'll start looking at an investment property. I also want to take advantage of working remotely, while I can.

    Areas under consideration are Far North QLD (have an uncle who lives at Trinity Beach - wow property is good value up there), Sunshine Coast, QLD and Coffs Harbour. We've only just started looking, so any tips of good areas to live for for two mid thirty year old DINKS who love the ocean and being outside in general?

    Does this plan sound reasonable? Love to hear some alternative perspectives and advice. So many options it's overwhelming!
     
  2. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,371
    Location:
    Somewhere in the land of Oz
    Fnq! But they are all great spots!

    Google rentvesting or listen to the property couch podcast. Flip your plan around, rent for now then worry about the ppor
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,159
    Location:
    Gold Coast
    regardless of where you buy, if you are ok with saving money.............

    go for a loan IO with 100 % offset and pay the cash into the offest

    many more options

    ta
    rolf
     
    mouseburger, MsAli and Taku Ekanayake like this.
  4. armory

    armory New Member

    Joined:
    26th May, 2016
    Posts:
    3
    Location:
    Central Coast NSW
    Thanks, I will look it up! We're set on getting our own place first, however i'm on a good income so should have some equity to play with in no time.
     
  5. armory

    armory New Member

    Joined:
    26th May, 2016
    Posts:
    3
    Location:
    Central Coast NSW
    How does it work with deposits and 100% offsets - we're planning on close to a 20% deposit, are you saying it's possible to have the entire deposit in the offset and redrawable?
     
  6. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,371
    Location:
    Somewhere in the land of Oz
    It sounds like you're in party mode being dinks moving where you want. ... i remember the fun times before kids moving around! :p
     
  7. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,620
    Location:
    Sydney
    You will need a deposit of 20% plus costs to purchase the property. There are options for less than 20% deposit but for the sake of simplicity we will say 20%. Once you have done this, using an interest only loan with an attached full offset account, you can pour all your income into that offset account. This reduces the interest payable on the balance of the loan by whatever the balance is in your offset account. Over time, the balance will increase and will offer you more flexibility for the future as whatever funds are in the offset are available to you at any time. As mentioned though, you need to be disciplined to do this.
     
    Leo2413 likes this.