Best places to buy for I.P. (First home buyer)

Discussion in 'Where to Buy' started by Dillan, 13th Apr, 2020.

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  1. Dillan

    Dillan Member

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    Hey guys,

    First home buyer here looking to get on the ladder. Looked around and tossing up between QLD and VIC. Looking for a positively geared properties aswell.
     
    Ayaz likes this.
  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Hi @Dillan - if you're based in Sydney, are you looking for an investments (rather than first home) in VIC and QLD?

    That's a broad question.

    When you say positive cash flow - how should the numbers look for you?

    What about capital growth?
     
  3. Dillan

    Dillan Member

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    Hi, Sorry about the ambiguity.

    Yes, I am looking for an I.P, not a first home. Was unsure which state had the best rental demand.

    RE: figures on the positively geared properties, I didnt have any specific numbers as of this time. Just getting a feel around the market.
     
  4. JohnPropChat

    JohnPropChat Well-Known Member

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    What's your budget, what yield are your expecting, prefer growth or cash flow?
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Ha if only it was that simple o_O
    What suburbs have you researched yourself?
    Why positively geared?
    What's your goal, capital growth or cash flow or something else?
    Why QLD and VIC only?
     
  6. Dillan

    Dillan Member

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    Budget of approx 250,000- 300,000. Looking for about a 5% return, if there's areas with a higher yield, then I'd look at that. But want to make sure that rental demand is high in the area first. Prefer cash flow at this moment, just looking to build my portfolio up at the moment and focus on growth properties later on.
     
  7. Dillan

    Dillan Member

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    Hey,

    Ive researched around the Logan Area, and Harvey Bay in QLD. And Ascot Vale, Flemmington in Melbourne. As above, looking for positively geared properties to help boost my portfolio, looking to increase cash flow to get future properties.

    Looked around, market in WA is not ideal. NSW, Sydney in particular is too expensive for me at this time. VIC and QLD seemed ideal for rental, talking with friends who have bought, and that its starting to show growth at cheaper prices than Syd.
     
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  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Great start, plenty of info on the forum regarding each of those suburbs, as you probably know.

    Important - have you spoken to a broker who can map out what you can afford to borrow and then determined your buying strategy based on that? It's an essential part of your overall planning.

    Note, just because a property pays for itself (positively geared) doesn't mean that your borrowing capacity is not affected when you want to buy another, then another etc.
    Generally the positively geared properties will have lower capital growth potential and a 5% rental yield will most likely not be a positively geared property once all costs are considered.
     
  9. The Y-man

    The Y-man Moderator Staff Member

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    upload_2020-4-14_13-21-51.png

    Part ownership of this and other buildings. Share the rental income (net of interest) ~6.8%pa return

    Charter Hall Direct PFA Fund

    The Y-man
     
  10. Dillan

    Dillan Member

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    Thanks for that,

    Ill have a chat with my broker and work accordingly.
     
  11. Shogun

    Shogun Well-Known Member

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    Recent events make me think a "cheap" property with low expected capital growth potential and barely cash flow positive is a bad idea. Unless you can value add for profit.

    I would be buying shares or funds like suggested above.
     
  12. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Hey Dillan, and welcome to the forum.

    This is such a great resource for someone like yourself who's just starting out!

    What made you decide to get into property?

    We find with a lot of our new property investors, they're just taking the logical next step as an adult - which is awesome - but also the cause for lots of early mistakes.

    I'd encourage you to really think about what you're trying to achieve long term with property before you start looking at property. Property is the vehicle, not the goal, and nearly all new investors get super caught up on the vehicle, and give next to no consideration to the destination. :)