Fundamentals

Discussion in 'What to buy' started by Mccuzzle, 13th Mar, 2018.

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  1. Mccuzzle

    Mccuzzle Active Member

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    Hi All, I’ve read through quite a few of the posts and followed a few threads, but still seem to be quite cautious about buying anything... is there a post or resource that gives an overview of getting started in property investing? Things like house vs units; how to pick a good area (I seem to find a good area after it’s gone up in price, not before...); how to not make stupid mistakes; what to look out for / avoid.. that sort of thing.. if nothing exists, what’s your “golden rules”? I’ve looked at Hobart, Adelaide, and Port Macquarie mainly - thinking I’d rather start small with a larger deposit to avoid LMI and try to get cash positive from day one if possible.. thanks!
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    It's the entire forum..... unfortunately.....

    While books and *some* seminars are a great way to start, there are too many dependencies and variables.

    The starting point I think we inevitably ask is: "How much can you borrow"
    Next people will ask about "are you after CG or Rental yield" or "what are your goals"
    From there the paths diverge in many ways.....

    The Y-man
     
  3. Sackie

    Sackie Well-Known Member

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    My approach was to start with some books and make notes, underline, highlight etc. It can be tedious and you'll likely read some repetitive things but it really drills in some important concepts and it is where I believe most of the foundation stuff is learnt. Eventually after you read enough and then read the forum and chat with people here about your ideas etc, you will start to form a clearer picture and your own informed perspective which is priceless. From then on its deciding on an action plan aligned with your goals and then just going for it.
     
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  4. The Y-man

    The Y-man Moderator Staff Member

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    My golden rules (not necessarily anyone else's!!)

    1. buy after property is passed in at auction
    2. buy in an area I know (as in I can drive there on a Friday night, park the car, and get out and be satisfied I will not be assaulted or car stolen within the first 5 minutes)
    3. near a metropolitan train station or a 7 day a week bus service to CBD
    4. NOT brand new or Off the Plan (only preloved and pre-tested properties)
    5. as much land component as possible for its area

    Nice to have:
    6. near major shopping centre
    7. near hospiutal
    8. near uni
    9. Car parking

    Not sure if I forgot anything.....

    The Y-man
     
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  5. Property Guy

    Property Guy Member

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    Would you buy in areas that are expected to have unis/shopping centres/car parking etc. at a later date (but these amenities/services) are still yet to be seen/experienced.
     
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  6. Eric Wu

    Eric Wu Well-Known Member Business Member

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    welcome to PC @Mccuzzle,

    the overview is simple, buy a good property, hold it for at least one cycle, then your money is doubled.

    (I know I have not been helpful here, ;)), it is like the question of how long is a piece of string.....

    @The Y-man and @Leo2413 have given good advice there.

    it is overwhelming when starting out, too many things to consider, but there is no easy cut. Maybe dedicate 1 or 2 hours each day reading the forum and the old SS form, and ask heaps of questions, gradually it will all come together. then ah ha moment follows. :)
     
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  7. Anthony Brew

    Anthony Brew Well-Known Member

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    I wish I read these before I ever purchased.


    Can skip this if you know the basics already
    • More Wealth from Residential Property - Somers

    Required reading IMO
    • Grow Rich with the Property Cycle - Trass

    Books by 4 different authors using different property investing strategies.
    • The Truth About Positive Cash Flow Property - Lomas
    • The Rules of Property; How to Grow a Multi-Million Dollar Property Portfolio - Yardney
    • From 0 To 130 Properties In 3.5 Years - McKnight
    • My Four Year Old, The Property Investor - McLellan


    After taking time to take in the information from those, reading the forum, and chatting to a few people on the forum who I respect when I have questions, I've been able to find a clearer path.
     
  8. Mccuzzle

    Mccuzzle Active Member

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    Gulp... there’s a lot there and I’ve skimmed some, read detail of others which I guess creates a bit of a problem. One minute I’ve got Hobart FOMO, next minute I’m thinking of 20 houses in Detroit (MTR!) I’ll start to read some of the suggested books and make lists of what I’m after. Thanks Y-man
     
  9. Mccuzzle

    Mccuzzle Active Member

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    Thanks Leo, I’ll get reading and form a plan
     
  10. Mccuzzle

    Mccuzzle Active Member

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    Great, thanks! How far away from each of these (rail, bus, etc) is reasonable?
     
  11. Mccuzzle

    Mccuzzle Active Member

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    How long is ‘one cycle’? Does each property have it’s own cycle, or is it the whole market? Thanks for replying
     
  12. Mccuzzle

    Mccuzzle Active Member

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    Awesome, thanks Anthony! I’ve read 0 to 130 but felt I missed the rapid growth of the last 20 or so years to really get into it. Also seemed like I needed to buy seminars etc which I am sceptical about (having been burnt by these in the past)
     
  13. The Y-man

    The Y-man Moderator Staff Member

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    15 minute walk.

    The Y-man
     
  14. Anthony Brew

    Anthony Brew Well-Known Member

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    I think if all you got from 0-130 book was that you missed the credit expansion, then I think you missed a lot of great info in there.
     
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  15. The Y-man

    The Y-man Moderator Staff Member

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    Many people discuss in terms of cities having cycles (i.e. you read a lot of posts about Sydney will crash etc)

    While I agree that a small regional centre may have a cycle covering the whole place, in a place like Melbourne each of the following has cycles:
    - Suburbs (and sections of large suburbs)
    - Property Types (units, apartments, houses, land)

    The length of a cycle varies......no fixed timing....

    The Y-man
     
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  16. The Y-man

    The Y-man Moderator Staff Member

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    By the time everyone knows about them, the prices are often adjusted to account for this.

    The Y-man
     
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  17. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    - determine borrowing capacity
    - decide on area
    - get a reputable BA to help you with the first purchase
    - read, read, read and read more, think, process, act
    - have buffers in place for the unexpected
    - keep reading, thinking, processing and acting, essentially immerse your self in the subject matter.
    - dont limit your investment vehicles to just property

    There is the overall Australian property market and within that are local markets and within that are micro markets all moving at different times and often for different reasons. See points above :)
     
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  18. Jane Ridder

    Jane Ridder Well-Known Member

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    Yes, get some clarity over your borrowing capacity and that will help you to narrow down which areas to target. I'm sure you'll get some good suggestions on this forum.

    You will make mistakes (we all do). Try not to let this concern stall your progress.
     
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  19. jefn89

    jefn89 Well-Known Member

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    Biggest piece of advice I can give is to have an action plan, do the work i.e. reading this forum, books, seminars (go for the learning and ask questions where you can) and then take the action i.e. buy the first one in say 6, 12 or 18 months. If you don't set the plan and have an actionable time-frame we'll be having this same conversation in 3 years time..

    You'll never be "ready" and it's unlikely there'll ever be a "perfect" time. A good buyers agent will help take action although be clear that you understand your goals, why they're recommending the area etc

    All the best and keep posting! :)
     
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  20. Mccuzzle

    Mccuzzle Active Member

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    I’ll have to go back and read it again I think....