First Time Poster - Advice on my Current Situation

Hi All,

Firstly i'd like to introduce myself to you all on this forum, my name is tom and i currently live in melbourne in the upper north suburbs near broadmeadows with my parents.

I thought i'd make a post as i am new to the property market and need some advice with current situation on the best way to move forward with property.

My situation:
1. 32 years old - no property at all
2. 60k savings
3. looking to buy a PPOR to save on stamp duty
4. budget anything less than 550k in VIC
5. reason why i didn't purchase property years ago (when i had more than 60k) was because i decided to invest into the stock market (did well in the beginning but then lost everything) - had to restart 2 years ago, had a mental breakdown because of it and thought about suicide. long story short, i got out of my rut and pulled up my socks with the help of family, friends and psychologists and have been saving since.
6. i dont think i can buy an investment property now as i dont have 20% deposit and given my age, i believe that option is out of the equation until a later stage i guess?

I feel like i should be moving out now as im 32 now and need to 'grow up' and fend for myself. given the circumstances over the last few years, it has limited my choices/options in property as i don't have alot of money now so am seeking the advice and information on how i should tackle the property market.
considering the above what do you experienced fellow property chatters recommend?

i was thinking of buying a place in jacana along the eastern corridor of the 'burb as it isn't hilly and has close access to pascoe vale road, freeway, train station and shopping centre however am considering other areas.

If anyone has any thoughts or advice they can give me, i'd greatly appreciate it !

Thanks for taking the time to read and share.

Cheers,
Tom

 

also i might add that i was looking for a house with land that has potential to develop later on without too many resitrictions i.e airport overlays etc. i'm not too interested in units/townhouses.

 

Income?

 

income just under 100k base salary

 

Hi Tom,
Well done on picking yourself back up and working towards your goal! That’s a massive achievement to come back from and save $60K. Congratulations!

I think your first step should be chatting to a reputable broker to see what you could realistically afford to borrow. With your salary as a single income and your size deposit, a $550k purchase might be challenging and you’d have to pay Lenders Mortgage insurance for a PPOR or investment property - unless you wait until January for the new FHB scheme where the govt pays your LMI.. but then you’ll also be competing with all the other FHB‘s doing the same thing..

If you have a good relationship with your parents and living at home is a viable option, I’d stay as long as possible to keep building up that deposit to 20%. On your income that should be achievable within the next 2 years I would think. Try not to worry about what other people might think about you still living at home. I’m 30 and I wish I had the option to stay at home longer and save more money!

If living at home for much longer is not a viable option, consider renting a small unit or share housing to keep rent costs down while you keep saving for your deposit. You said you don’t want to buy a unit, and given the stamp duty costs you’d pay on a second PPOR purchase, I wouldn’t waste the FHB benefits if you are going to want to upgrade within the next 5 years.

Good luck, you are doing great!

 

Welcome Tom - I'm glad you got out of your rut and are here to tell the story

Have you spoken to a broker? That's a really good place to start - they'll be able to help you know what you can borrow and also chat with you about strategy moving forward.

 

Tom, you have to be kind to yourself.

You have been through a pretty awful few years, and kudos to you for turning your life around. And to get to the point where you are looking ahead to build a future for yourself.

But don’t rush things. Don’t put yourself under more stress until you (and your medical professionals) are sure you can handle it. Don’t move out of home just because you think “you should”. Unless, of course, your presence at home us causing problems, which I very much doubt.

Contact a mortgage broker (search threads on this forum for some highly recommended people) and get your finances in order as a first step.

Then take your time to have a good look around at the suburb/s you are considering to see exactly what you can afford.

 

Tom i know people still living at home above your age with their parents with a 100k credit card debt and travel O/S every 5-6 months so when you say I don't think i can with 60k sitting in your back pocket you are way ahead of most people your age..Plus i would not worry one percent about living they way you do as it's your business ..

The first step would be a Accountant sit down face to face and on this sort of money the ATO would be the only winner till you change the set-up..

 

With an income like that - would you consider knuckling down and saving hard for 2 years then moving to somewhere like Ballarat or Geelong? This can really reduce your expected mortgage, and you’d still remain in easy reach of your parents and family.

 

I would look at the option of renting a cheap unit or even a room in a sharehouse. Then keep saving up for the deposit

 

Hey Tom,

Saving $60k now days is no easy feat so well done on that.

If it were me id decide what your goal is long term, and then fit a strategy to it.

Are you just wanting a PPOR to live in to call home? Do you want to build a portfolio of properties? Will your income increase over the next few years? I think answering a few of these type questions and looking further ahead is more beneficial and will help clear up your next move.

Plenty of information and knowledgeable people on this site to read and learn from so don't be concerned with the next move just yet, figure out where you want to be in 5-10yrs and then aim for it.

 

really? how did you get your foot in the door?

I thank-you for your kind words, it really is uplifting. I have spoken to a lender at CBA and yes i am aware i'd have to pay LMI. is this scheme somewhere online? i can't seem to find it.

Yes i do have a good relationship with my parents and they aren't pushing me to move out however i feel like i am staying home for too long, i feel like i should be out there being a grown up and fending for myself instead of relying on them for a roof over my head. i just can't help the feeling either.

to be honest i don't know if i could rent with other people, probably just rather stay at home i guess. I guess my plan was to find a property that i could live in for a year or two and then move out or try save some more and then buy a second property (hopefully have built some equity into the first property). Wouldn't it be the same if i used the FHB now or later? If i don't use it now, i'd end up paying stamp duty anyway and reduce my options.

I have spoke to a few a few months ago but i had less of a deposit so they told me to keep saving however now that i have 60k, i spoke to a lender from CBA and she said that i can borrow 490kish based on salary and a deposit of 50k. I want to purchase a property that isn't too expensive, too far from the city, central, has development potential and easy acess to main roads/freeways and public transport. i guess that's why i've narrowed it down to Jacana.

Yes definately! Real big lessons on emotional trading/investing.

Thank-you for the kind words. i know i shouldn't rush things but have been thinking about this for a while and i believe this would be good for me to 'grow up' and be responsible. There's no problems at home, its just more of my head is telling me im behind in life and my friends. I try to tell myself not to worry and just keep saving and dont worry about other peoples pace etc but sometimes can't help the feeling especially at this age.

I have considered Jacana on the reason's in my response to Jess above. However i'm also looking at the west now as well for a newer house within the 400-500k price range. not sure of the potential future development opportunities there as they are already in new estates etc.

I understand, everyone's different and has different priorities. Even though im out of the rut, i do look back and think in hindsight and think i ****** up and its affected my options up until this day.

I could keep saving for another 2 years but who knows what house prices will be by then - out of reach? I'll be 34 by then and still living at home ! haha that pains me to say it to myself. Ballarat/Geelong would be too far as ideally i'd like to stay in melbourne with closer access to work. I got a new job in the eastside of melb but wouldn't be able to afford anything in the eastside. My new job requires travel on jobsites in the west so was also thinking about buying in the west if not up north along the broadmeadows corridor.

Thanks for your advice however i'd prob just try keep saving for a deposit rather than rent right now, i'd consider renting after i've got my own house

Thanks Codie,

I do want a PPOR to live in because thats all i can afford for now, move out for a year or two but i also do want to build a portfolio of properties too later on after my first purchase. My income has room for growth over the next few years as i recently changed jobs for a new challenge plus growth.

I believe buying an upfront investment property requires more capital and higher deposit and i don't think i can afford that option anymore since i only have 60k now. i had the option years back before i lost all my money. so i guess its out of the equation for investment property route.

 

You will find you have three good things going for a plan :

1. You know how to commit to saving
2. You have a plan
3. A job and good health

Your plan may need to focus on the own home first with a later plan for a IP. Or a bit of both. You could consider:
1. A cheaper home now and a cashflow that allows more saving
2. The new first home scheme allows a 5% deposit with the GOVT paying the LMI. Its starting soon (not Wpac who were naughty so Santa crossed them off the list).
These things could preserve cash.

You should then wait patiently for growth to lift your value. Later (5 years+ ?) with further saving, property renovations maybe and some TLC and savings you may be ina better place for stage 2...The IP plan.

Unfortunately the Vic GF rules arent friendly to a GF in the back yard for extra income. But why not rent your rooms to help fund your dream and give you some company. For a while at least. A 3 bed place would be 2/3rd negative geared. May even help your servicing etc

 

I wouldn’t say it’s out of the equation at all, yes you would have to consider buying in another state with your budget but definitely possible.

In regards to aiming for a PPOR, where ever your looking, aim for something you can add value to over the first year or two, using this type of strategy can really catapult you into the next IP. $60k in, a renovation, mixed with a little growth may give you a deposit within the next 12-18 months and seeing you with 2 properties by 34, plenty of time to grab another couple in the following years and have a base 2m+ portfolio working for you through a couple of property cycles. Something to think about

 

I'll have a read thanks!

I was thinking moving out towards point cook area or st albans or the west somewhere for around 550k max purchase price

Thanks for the info and advice, ill consider these factors and see what i can find.. was looking in western suburbs of melbourne - point cook, st albans, altona meadows.

 

Hi @tomtomtom

I enjoyed reading your post and well done to you.

I'm not sure if you've heard about the governments new deposit guarantee scheme for FHB but I provide more info below at the government website. This may assist you in getting your foot in the door on a property with your current deposit.

First Home Loan Deposit Scheme | NHFIC

Best,
NewAroundHere

 

hey mate!

Thanks for posting on my thread. i have been approved for the deposit scheme now and am on the hunt for a property. i have 90 days now to find something haha. currently looking now. Have you found a property?