Best options to get started in the property market?

Hi all,

I'm looking for some thoughts and recommendations. Originally my plan was to save up about 10-15% deposit (aiming for around 420k for first home/unit). I estimate I could have $60,000 saved by mid next year as I'm currently at 30k. Very high credit score. While renting I can still funnel about 600+ a week into savings.

Longer term I was thinking of living in the home with someone renting which puts me at $1000 per week roughly. Then once I paid off enough I could use that equity to purchase an investment property.

I attended a free seminar by the Rich Dad group, was very salesy and didn't sign up to the program. However they started me thinking that maybe this was the wrong approach?

They were talking about using the deposit to buy a property that's under-valued and then refinancing against the higher valuation (while also doing some work to the property to automatically increase the valuation). Which then means technically I would have two mortgages, but could use the first to pay off the second. I thought (no experience as don't own any property) that refinancing was only on the portion I've paid back to the bank? Am I wrong on that?

What would be the best option if I wanted to buy now? Happy to live in, so would be about 30 minutes on a train line from Brisbane, and have someone rent a room. At the event they were implying that there are heaps of options for obtaining the finance beyond the standard 'save a deposit'. Financially, I'm very secure. Been in the same company for almost 15 years (I'm 33) and it's Government so very secure.

Any thoughts and suggestions would be greatly appreciated. And recommendations on books to start researching and learning would be awesome.

Thanks
Jason

 

Hi Jason,

Buying a PPOR that needs work is a great way to quickly get enough equity to buy number 2.

How it works is that after the Reno you get a new valuation done, access any equity via a smaller loan which can be used as a deposit for the next property.

There's been a few quirky things coming out of the rich dad seminars that may work in the US but don't work so well here due to the different banking and tax systems.

For specific advice it would be worthwhile getting a broker to have a look at your current circumstances - they'll be able to let you know exactly what's possible for you.

 

Rich dad poor dad, the book is useful to read. There are also Aust based authors like Jan somers that will help on the investment journey. Basically go to a public library and borrow all the books in the personal investment section. Skim thru, they aren't gospel.

Keep reading here as well and go to the meet ups in your state and ask how other people started.

Don't spend any money on investment seminars or books for a month or 3 until you have an idea of which strategy suits you. Many people never pay for advice or information.

 

Buying a well positioned PPOR that needs some TLC and renting a room out sounds like a reasonable strategy to start with.

I would look to build a team around you starting with a mortgage broker, accountant and a property solicitor. A decent MB should be able to hook you up with both.

 

@Jess Peletier I'm thinking of attending just so I Question the teachers. This is about the 5th post I have read with something from this group that is filled with holes!!

They seem to give advice without any consideration for the Australian taxation and financing landscape.
Simply using the name made famous by a book and bringing in loads of business!
You should honestly reconsider rebranding to "Seed Financial - The return of the Jedi".