First Property Investment Strategy QLD

So, I'm debating as to what my strategy should be for buying my first property.

Ideally, I want this property to be an investment property without living in it, although, I feel bad passing on stamp duty concessions as a First Home Buyer.

I am certain that I would like to start with 20% deposit, and so this is what is limiting my options.

Option 1:
Buy positively geared unit away from where I live as investment property now for roughly 150-200k with 20% deposit and pay 4-6k stamp duty.

Option 2:
Continue saving for 20% deposit for local house/unit for 400k roughly and live in it for 6 months to avoid paying 12k stamp duty. This may take 2 or 3 more years.​

Essentially, I am asking whether you guys think this saving of 12k is worth it or should I just jump into the market now? Please point it out if I have missed something obvious here.

 

Consider what's next after each option and which will bring you closer to your goals. How much will a 12k saving in stamp duty contribute to your goals?

 

Buy with Option 2, use only 10% deposit instead. you will pay mortgage insurance buy can buy property sooner than saving for 20% deposit. Its important to buy first property which provides you with capital growth to buy more in near future.

 

Perhaps you are right and I would be more likely to see capital growth on the future house.

But really, I can’t guarantee capital growth on either property and I would still be acquiring equity on the first property that I could use for future purchases.

So, I’m still not sure...

 

Is that always the case even when the lesser quality property can provide a steady positive income stream?

 

Which locations are you looking at for this option?

 

Re the 20% thing...

You can't guarantee you'll be able to get your equity out when you want it. Bank policy changes, valuation changes...

I'd rather pay a bit of LMI and be sure I'm going to be able to get into the properties I want.

Right now we're seeing bank policy changing quicker than you can blink...

 

What is a positively geared unit for $150k to $200k?

 

Hi Neil. The best option here is to utilise the Federal Gov's First Home Loan Deposit Scheme. Buy the best located existing property you can up to $475k, and only pay 5% deposit without any LMI. You won't pay stamp duty either.

This is provided your borrowing capacity reaches that far.

There are still spots available with Auswide and with MyState. Speak to a decent mortgage broker and they can arrange it for you.

Otherwise, you will save yourself out of the market trying to get to 20% on a decent property. Don't buy something $150 - $200k.

They are usually sub-standard 1 bedroom properties in regional areas which are not investment grade and will not get you a strong return in the future.

Interest rates are so low at the moment, take advantage of the FHLDS, buy a 3 or 4 bedder older house within 25 - 30km's of Brisbane on some land, and rent out the other rooms and you'll barely be paying $100 / week toward your mortgage. Try to get near the new Petrie campus of USC for a stronger rental demand.

Cheers.

 

Thanks for this reply. Much appreciated.