QLD Another new investor thread...

Hello all,

I’ve been reading propertychat and somersoft for a while and would like to seek advice from the community. And I wasn’t sure if I was supposed to post this on the Brisbane looks good chat or here… Mods, feel free to move this post...

Background:
24 years old nurse living in Sydney.
Currently have been approval for a $485,000 loan
Savings to invest in property: $100,000
Current fixed Income level: $60,000 + $5,000 overtime
I am currently doing a side job with my nursing career generating approximately $2,500 a month (but I’ve just started it this year so wouldn’t count much for loans)
I can afford to put in $2,500+ into property a month (Not what the bank believes anyway but)
The rest of the savings goes into other investments
Happy to continue renting in Sydney and sharing with roommates to cut costs.
No parents to help out with additional investment/house guarantee (I have 3 younger siblings).

Goals:
Medium term game, ideally building a property portfolio of $1M in 15 years.
Hoping to purchase a house not too much negative gearing as my salary isn’t high enough.
Not particularly interested in flipping properties - don’t think I’ve got an eye for reno.

I’ve been looking into the Brisbane market because it seems to be within my budget and I can purchase closer to the CBD than the other city markets.

Risk Profile: Not conservative
Question:
(i) I was looking at areas around Keperra and Arana Hills. Would it be advisable to purchase the house for $550k or get 2 houses in Ipswich (open to suggestions) for about $280k each?
(ii) I was looking to get a buyers agent because with shift work its a bit difficult to get over there to have a look at the property. Anyone can vouch for Property Zest?
(iii) With all the APRA changes should I just continue put money into other investments for now because my savings/income is too low and wait for my savings/income to increase?
(iv) Anyone have recommendations for conveyancers, building inspectors for QLD?

 

Background:
24 years old nurse living in Sydney.
Currently have been approval for a $485,000 loan
Savings to invest in property: $100,000
Current fixed Income level: $60,000 + $5,000 overtime
I am currently doing a side job with my nursing career generating approximately $2,500 a month (but I’ve just started it this year so wouldn’t count much for loans)
I can afford to put in $2,500+ into property a month (Not what the bank believes anyway but)
The rest of the savings goes into other investments
Happy to continue renting in Sydney and sharing with roommates to cut costs.
No parents to help out with additional investment/house guarantee (I have 3 younger siblings).

I don't know exactly how aggressive you want to be and how fast and big you want to build your portfolio. I'll assume you want to be moderately aggressive and you can adjust my advice accordingly. Maximize income. Roster yourself for weekends and do as much overtime as you can . It will dramatically increase your income. You can also put yourself on the casual pool for other hospitals and work on your days off, nights etc. It sounds like you are already doing this with your $2500/months. Great. You would be able to save a massive amount of money if you did this for a period of time and it will help with further deposits (I see you have 100k which is fantastic) as well as help with maintaining a buffer. Also something many people overlook, the health industry affords professionals extremely strong job security so you have less fears/risk of losing your job, therefore reduces your overall investing risk.


Goals:
Medium term game, ideally building a property portfolio of $1M in 15 years.
Acquiring a 1m portfolio in 15 years is quite an easy thing to do for most and imho its too small a portfolio over a 15 year time period to create significant wealth. So go back and look at your goals again. I think you possibly may be confused there.

Hoping to purchase a house not too much negative gearing as my salary isn’t high enough.
With your base rate, plus penalties, overtime and casual pool I cant imagine your income is too low unless you have significant bills or your spending too much. Generally it will be NG to some extent if you choose to buy a house in the inner or middle rings.

Risk Profile: Not conservative
Question:
(i) I was looking at areas around Keperra and Arana Hills. Would it be advisable to purchase the house for $550k or get 2 houses in Ipswich (open to suggestions) for about $280k each?
This is where it gets tricky and many ways to approach it. If it was me, I would want to buy as close as I can to the CBD with my budget. I'd want it to be a house with add value potential on a decent sized block. I'd be going with the house in Keperra as opposed to 2 in Ipswich. Do your DD and then decide.

(ii) I was looking to get a buyers agent because with shift work its a bit difficult to get over there to have a look at the property. Anyone can vouch for Property Zest?
Engaging a good BA is one option, especially if you just don't have the time. I would advise that even going this route, make sure you do all the basic reading and have a good grasp of investing fundamentals so when the BA recommends a place, you will be able to apply your own filter to see if its a good choice or not. I cant comment about Property Zest as i've never engaged them.

(iii) With all the APRA changes should I just continue put money into other investments for now because my savings/income is too low and wait for my savings/income to increase?
Why is your savings and income too low? You said you have 100k deposit plus approved to get a 485k loan. I don't think that's too little to start. And like I said, you have the potential to explode your income if you want.

My sense is that you need to continue to read and learn about the basics and fundamentals of real estate investing and you will improve with experience. But I think the loan you have plus deposit is enough to start. Also I would be going back over your goals and what exactly it is you want to achieve with your investing.

 

Thanks Leo for the advice.

As I'm a first year nurse (just graduated) and intend to work as a casual nurse in other hospital commencing next year. Through the readings, apparently the banks would like at least a couple years of evidence to state that the income will be an ongoing job.

In regards to the $1M portfolio, the original plan was the following:-
Attain within 7 years, $1M net worth through property (after debt), but was told that it was too aggressive, without jobs with high compensation.

Because of the irregular hours I work, I can't actually schedule trips interstate to purchase the houses which is why I wanted to engaged with a BA. But I do intend to make as many phone calls and research through the internet for the property i.e. statistics. This closes the doors on doing renovations and keeping an eye on things.

I guess its still advisable to purchase an IO loan for as long as possible?

Do you have any recommendations for a BA, conveyancer, building inspector for the Keperra area, (because I think thats about as close as I can afford at the moment?

Thanks again Leo

 

As I'm a first year nurse (just graduated) and intend to work as a casual nurse in other hospital commencing next year. Through the readings, apparently the banks would like at least a couple years of evidence to state that the income will be an ongoing job. Just do the overtime as soon as your allowed and be on the casual pool in other places and you will be raking it in.

In regards to the $1M portfolio, the original plan was the following:-
Attain within 7 years, $1M net worth through property (after debt), but was told that it was too aggressive, without jobs with high compensation.
Well 1mil net in 7 years is very aggressive and it most likely wouldn't be possible unless you were able to ride a big boom or add significant value to projects to create that 1 mil. However in saying that, if your willing to work your ass off (and i mean hardcore) and learn this game well, if it suited your risk profile you could make that 1 mil net sooner than you think.

Because of the irregular hours I work, I can't actually schedule trips interstate to purchase the houses which is why I wanted to engaged with a BA. But I do intend to make as many phone calls and research through the internet for the property i.e. statistics. This closes the doors on doing renovations and keeping an eye on things.
There are companies that can help you with the cosmetic renovations. Its not as daunting and time consuming as some think. Especially if your extremely committed to this business, you could learn what you needed to quite easily and build the contacts to get them to help you.


I guess its still advisable to purchase an IO loan for as long as possible?
I'm not in touch with current lending policies for someone buying their first place as I don't have much to do with it. Maybe @York can help you. I would say though that if its possible still, get IO and as leveraged as possible so you can build your asset base faster. Bear in mind this is advice for an aggressive investor. You will need to decide what balance is best for you.

Do you have any recommendations for a BA, conveyancer, building inspector for the Keperra area, (because I think thats about as close as I can afford at the moment?

I can't recommend a BA there but I have heard some good feedback for @Simon L so you may want to start your Due diligence to check him out. I will PM you some contacts later.

Imo, if you seriously want to make that 1mil net in 7 years or 10 years or 12 years, your best bet is to learn the ins and out of this game: Market cycles, Property due diligence, suburb due diligence,negotiations and buying tactics, investing strategies, add value strategies, buying below market value strategies etc. Also building a network and strong relationships with like-minded investors and professional contacts is essential. I would also be developing your mindset and philosophical approach to wealth creation and success in general. Youtube Jim Rohn, Les Brown.

I know its a lot of hard work and sacrifices but you want the big money in a shorter period of time so...its gonna take a lot to get there. Good luck mate. I got a soft spot for newbies who want to do great things and are willing to go for it. Its all up to you now.

 

Thanks for the reply this early in the morning! I will continue to research and purchase that property. Looking forward to going into this!

 

Thanks @Leo2413. Whether or not to go for an IO loan depends on many factors that form part of your complete financial situation and also your short, medium and long term goals also need to be considered. This will form part of your plan with your broker.