Buy and sell in 12 months - Is this crazy enough to work?

Why not just use this opportunity to purchase a PPoR? Better lifestyle wise and usually cheaper than renting at current interest rates, plus you could get a 90% LVR loan and still have access to most of your savings for investing in equities when the time is right. If everything goes well with the Brisbane market you could still sell after 12 months, otherwise continue holding it as a PPoR or an IP. Either way choose a property that has potential for a sustainable rental return so that you can be safe holding longer term if required.

 

The OpeningPoster has not stated where he lives currently and where he works. He may be a FIFO miner and be encouraged to select a property near the airport, an infill townhouse or a new apartment in order to receive the FHB grant. He may be a real estate salesman out at Yarrabilba and his employer is encouraging him to live in the estate so he can talk it up to their clients. We can really only comment on potential capital growth or the advantages/disadvantages if we have more information about the location etc..

 

G’day all,
Thanks for the comments, this is a very active forum and it has given me some food for thought. There are no restrictions placed on the 20k other then it must be first property and that I must live in for 12months. I would be looking anywhere between Brisbane City to Ipswich.

At the moment, it’s looking to lean a little too risky for me, with my concern that the expenses involved in buying/owning/selling may eat up the free money that I am trying to come out with at the end - which worries me that I may be taking the risk with little reward to look forward to.

 

Very interesting! Thank you albanga. If it were to pan out like this then definitely worth it.

 

If it's a new property that $35k might be going to the hands of the developer instead...

 

I say buy a house. You will need somewhere to live one day anyway. My advice is buy somewhere where you could possible live in 10/15/20 years. Even if its out in the suburbs try go for a family home that you could rent out while you are young and don't want to live there after the 12 months, then when its time to settle down move in. I think everyone should buy a house to live in while they are young. I have never met anyone who has said "I wish I never bought my house 20 years ago". Obviously people have regrets with investments as they are banking on a good a return, but a PPOR if you could change your vision to hold it long term I can't see how it could have any negative impact on your life. My only advice would be to buy as close to the Brisbane CBD as you can afford rather than a regional as I wouldn't want to risk buying a regional that may never have any growth and may not be somewhere you could live in the future.

 

I think, as Hwangers hinted at above, a brand new property qualifying for the FHOG will have a premium price attached to it, you might find that at the end of the 12mths when trying to re-sell you may not achieve the same price you bought at, due to other First home owners bypasing it in favour of brand new builds.
I always recommend to young friends, "ignore the FHOG and buy an old house on a big block, as close to the city (of your chosen capital) as you can possibly afford. The capital gain on this type of property in the long run will make missing out on the FHOG completely insignificant over time".