QLD Good areas for 400k (QLD)

Hi everyone,
As the name suggests I am an index fund investor. I don't have any experience buying property whatsoever. I have read a couple of books about property investing: 0 to 130 properties in 3.5 years by Steve McKnight and 20 questions by Margaret Lomas. I study finance at university and I am convinced that it is a good idea for me to start my own business investing in real estate. I have annual savings of $30k a year and I can afford a 20% deposit on a 400k property now without selling any of my shares. This would be an IP. I only carry a student debt.

I don't necessarily have to buy a house valued around 400k. I can save longer if need be or spend less. For my given situation I feel it would be wise to find something that is neutral or positive cash flow. I don't have a big income yet and I don't want to put myself under unnecessary stress while I am the sole income earner for the next few years. I could handle a slight negative cash flow for a while if it meant greater chance for capital gains and positive cash flow in the near future. I am thinking of using an interest only loan for 5 years before adjusting to principal and interest.

Does anyone have any recommendations for me to begin my research? Are there any recommendations on areas I should focus on in the Brisbane, Gold Coast region? I know this area a bit better than others and live nearby. It would make it easier if my first purchase was in this area so I can look around the suburbs more easily.

So far I have found that Ipswich, Bald Hills, Logan, Beenleigh and Coomera are possible areas of interest to me.

Hopefully I have given enough information for people to give some advice tailored to my personal situation. If you need to know anything else feel free to ask.
Thank you

 

I think you really need to sit down with your mortgage broker and tax accountant to start defining the strategy/goals before worrying to much about the area..

Once together as a team, you have developed the right strategy, then move onto the next steps..

Famous saying- "Always remember you are absolutely unique. Just like everyone else!!...

Cheers,

 

Do you intend on buying a family home down the track?

If you are the sole income earner, would it be worth holding back more of your funds, either for buffers or alternatively saving up further to have 2 x $400k assets vs 1 x $400k asset?

You may want to look at Moreton Bay as well for this price bracket.

 

Is it absolutely necessary to use a mortgage broker? My goal is to build my net worth as quickly as I can through real estate whilst keeping a good cash flow buffer to handle interest rate rises. I plan to continue investing into shares with some of my positive cash flow for added diversification. I do accounting at university as well so I feel I already have a pretty good handle on my own personal finances. However there is certainly a lot of room for optimisation.

What kind of other things should I expect a mortgage broker and my accountant to discuss with me that would change my investment plan? I know I need some "good" manageable debt on my balance sheet to help build up my net worth.

 

I have no need to worry about buying a family home just yet because I get a free house for working in the family business. My accommodation is good enough that I want to focus on just building my net worth as quickly as I can for the time being. I will be given this house soon since my Mum is sadly very sick. I expect to earn more as I step up my business responsibilities soon and this will help me buy the home I want at a later date. I am fortunate to be from a family that has done alright financially.

I was thinking that I would use my offset account while saving for more property and my shares as a buffer for interest rate rises.

Thanks for taking the time to give me some ideas. I hadn't thought of Morton Bay.

 

I might have given a few too many personal details but its hard to say why I just get given a house soon and why being aggressive with my investing suits my personal situation.

 

You can really make the most of having that support from your family (in terms of living rent free) from a borrowing perspective.

Just make sure you plan ahead and see what is actually possible for you in terms of lender selection and what may fast track in you building your 'net worth' that you are referring to.

 

Be careful not to let your 'accounting brain' sabotage your wealth creation plans. Doing accounting, finance, economics etc in uni is one thing. Actually building wealth can totally be another.

Imo if you want to build wealth asap with RE you still have much to learn. Enjoy the journey and welcome .

 

It's great that you have finance background and a good grip on your personal finances...

But having team by your side that lives, breath in this space and have climbed the mountain many times either for their own wealth building exercise or for their clients, nothing beats that experience!!..

Soccer player know how to play soccer but they still need a top notch coach!...

And a good mortgage broker is not just about getting your finance approved.

 

A mortgage broker will be able to discuss your borrowing capacity across several lenders .

 

Yeah you are right for sure. I understand through the numbers why real estate can be such a good wealth creation tool, doing it in practice is going to take a lot of learning and hard work. Thanks for welcoming me. I think this forum is going to be very helpful.

 

I will do some research on mortgage brokers. With my share portfolio I do everything by myself. The idea is to cut out the middle man to maximise my returns. I am very skeptical about the motivations of financial services professionals. I read John Bogle's "Little Book of Common Sense Investing" which was a real eye opener for me. I concede however that investing in stocks and real estate are completely different from one another in many ways. I definitely need to get a better understanding on how to structure my real estate portfolio. I read Steve McKnight's book where he discusses having multiple trust funds and guaranteeing them with his personal income. I also saw people here recommending to do it in your own name. Thanks for helping to point me in the right direction.

 

If you try to do this with real estate, eg do your own contracts, depreciation reports, your own inspections for building and Pest etc etc, I can guarantee you, you won't get very far and or will be losing money in the end. You need to build a team where you can share ideas, build on strategy and utilise their expertise. You can't build wealth on your own in RE. You likely need a mindset shift, imo.

Imo, For the vast majority of people starting out, this would be a total waste of money and time. I suggest you read more widely and also listen to the feedback from other successful investors on the forum so you can make a much more informed decision. And of course, always discuss this with your qualified expert .

 

You already off-track..

Mistakes in real estate can't be undone easily like share market due to cost of entry and exit...

Educate yourself by surrounding yourself with right ppl..

Good luck!..

 

Thanks a lot for getting me on the right track. Even though I am doing a degree in accounting with a finance major I still currently use an accountant since they have a lot more experience than I do. I have been happy with what she has done for me so far. I will look to build a team of people around me with expertise in the other areas as well. I will continue to read more widely as you recommend also.

 

Totally agree, there are a lot of poor accountants out there .

As a side comment:- as I have always been good with maths/numbers, when I was young, I was going to be an accountant.

Then I found out that I had a personality .

So I did IT instead. Go figure.

 

Thanks, I will tread carefully and do my due diligence before I buy anything. I have a plan now, which is to build a team of people around me who specialise in their area of expertise. I am busy enough with my own job and study so I definitely needed this reality check.

 

OT but anyway. The main reason I am doing my degree is to get a good understanding about finance as a whole. I actually want to move into quantitative finance which requires IT knowledge and allows for more creative thought. I don't think I could bare doing tax returns for a living either.

 

As Michael Yardney always says:

“If you are the smartest person on your team, your team is in trouble”.​

I can add to this:

“If you are the only person on your team, you are in deep ****”.​

 

Spot on!!..