Hello all, Stumbled upon this website not long ago, bit about me. 26, single, hitting the point where I am looking to enter the property market with my first investment property. Would really appreciate some advice and some questions that I haven't been able to have answered elsewhere. Firstly, Im looking to hit my savings goal of 30k towards to end of the year, that plus the 10k FHB grant and tax duty exemption, seems to be a good place for me to start. (As I am NSW based) Location- Currently I like the look of Goonda QLD. I have seen mixed reviews on this forum about the area. I am going through a team that are helping me with everything (finding area, sending me stats, my options etc) and I seem to be happy with them. Although, being new to this, and understanding that they are out to make a profit, I was looking at other opinions. Is there any big issues with this area? I understand it to be a low SE area, but being close to the CBD is the reason I like this area (along with looking at the other factors obviously). What to buy- I am looking at a brand new build (H&L), either ready to go, or OTP. The guys helping me seem to push for a new build, as I have good tax breaks. And, with my unique situation (which I'll get to in a bit), a brand new property seems best fit for me. Strategy- My strategy at the moment is secure a brand new property, go IO on the loan, and basically buy and hold for a long time (10+ years). From my research, this will be best done in Brisbane, with plans of diversifying for my next couple of properties (TAS & ADE seem like good places to go next). What are some risks involved? The way I understand it. I will have high cash flow, so adjusting for the inevitable interest rate rises shouldn't be a problem. Thoughts on the strategy as a whole? My situation- Without going too much into it, I work in Defence and will have to spend large periods away from contact (down to email at the best of times). This is why the whole, 'set and forget', along with new property strategy seems to be, in my opinion, best suited for my situation. Plus, I'm in it for the long haul, this is not just some hobby, this is my path to financial freedom and I wont stop till I'm there. Final question- At the moment, I am trying to gauge supply & demand in the area, for obvious reasons. I just cant seem to find the right tools and resources to figure it out. Say X area sold X amount of properties, how can I match that up with other suburbs, along with planned builds, to establish whether the area is in hot demand or if the area is over supplied with properties that are not being purchased? I get as far as, searching the area 'Ok, theres X amount of properties available in the area', but them I am left scratching my head on where to go next. Special thanks in advance to anyone that can help and just all the posters of this website in general. What a valuable resource it is! For a young chap like me who understands that companies have their own agendas, it is such a good tool to listen to everyones personal experiences. Any other questions, let me know I look forward to the journey. Kind regards, Peter V
Will it be a hassle to comply with the FHB conditions with your work in Defence? Remember its a slightly different scheme in each state too.
The way I understand it, being originally based in NSW (registered on the NSW electoral roll is the eligibility criteria) I qualify for the grant. I can then get a 'Service Exemption' so I don't have to live in the property for 6 months (as I am a defence member). First Home Owner Grant (New Homes) scheme | Office of State Revenue
Just make sure the 'team' who is helping you are not pushing you stock that they have a direct or indirect interest in. To me that is a huuuge conflict of interest and if that's the case then they lose all credibility in my eyes. So be very careful there.
But dont all teams that try and sell you property, have a indirect interest? Eg, they get a commission from the sale?
I have never engaged a 'team' but if by team you mean a mentorship company then I don't think that is the case. There are mentorship companies offering pure education for investing and do not push any stock or have an agenda whatsoever as they simply offer education. Then there are other people out there who have relationships with developers, financers, REAs, builders and they have a huge interest in you purchasing the stock they advise on. Some interests are disclosed and some not. To me the later type of companies are 100% in some way, shape or form not operating in and your best interest.
Thank you, I understand and appreciate your warning. But what is a man to do? There is only so much I can do by myself. If by understanding they are acting in their own interest, I still have the option to knock back their potential offers, and make them shoot for something that suits me, And if they profit, so be it, they are a business. With my strategy in mind, would you recommend something else entirely different? I work full time and spend large periods of time away from the country, are they not a necessary part of the process, to get where I need to be?
Thank you, I understand and appreciate your warning. But what is a man to do? Well if your asking my opinion on this, learn as much as you can about the fundamentals of real estate investing via good books readily available, the forum and network with other successful investors on here and elsewhere. After 3-6 months your level of knowledge will soar and your overall risk will be greatly reduced. Even if you decide to stick with this company, when you have some more education you will be in a much better position to separate the BS from potential opportunities. Also if your staying with this company I would be sure to run by any deals they introduce to you to the forum members because you will generally get good feedback to help with your decision. "Peter V, post: 412996, member: 10463"] There is only so much I can do by myself. If by understanding they are acting in their own interest, I still have the option to knock back their potential offers, and make them shoot for something that suits me, And if they profit, so be it, they are a business. I have no issue with a company making a profit at all. The issue is when they are not acting in your best interest. Companies that get kickbacks of all kinds from various players in the industry for recommending to clients their stock is at the very least extremely suss. If you're an aspiring professional investor who wants to build decent wealth, I wouldn't want to put my eggs in that basket. This is just my opinion on the matter. Talk to others and you may get different opinions. With my strategy in mind, would you recommend something else entirely different? I work full time and spend large periods of time away from the country, are they not a necessary part of the process, to get where I need to be? I would recommend doing 2 things. 1. Learn as much as you can re education like I said above and network with other successful investors on here, 2. A recommended buyers agent who understands your plans, goals etc might be a good move to help with your acquisition considering your situation. It will be far more objective with no conflict of interest. Good luck
It's not a team of people helping you if they take a commission from the developer who sold to you. That's a team of people selling to you. Get an independent BA who can provide the same service but earns the commission from you rather than from the developer.
Thank you both. A BA makes alot of sence. I assume now that they were pushing for new homes because it benefits them. Claiming that I will get tax breaks, I just need to figure out how much, and weigh up whether its worth paying extra. After reading other peoples opinions, a H&L package and buying in a estate both seem undesirable. Im starting to think I should aim for a 3-5 year old property, which could target the same tennants (young family) and could potentially be alot cheaper
Buying new house and land is not necessarily a bad thing. They might be offering a good deal. But below are some thing some you want to consider 1. What's the land size? Most new housing estates provide pretty small blocks 2. What's your goal? Capital gain, cash flow? Tax depreciation benefits are nice but shouldn't be a motivator to a decision. Tax benefits should be a secondary benefit you consider when doing your maths on specific properties. 3. If your motivator is long term capital growth, will a property out in a fringe suburb perform as well as a middle ring suburb? Personally I would consider a boring old middle ring suburb 3 bedroom home that will likely have development potential in 10-15yrs before I considered a fringe area house on a small block that hasn't good tax benefits. But that's largely for conservative reasons - who can rent a 3 bedroom home in a middle ring suburb? Nearly every middle class demographic. It's probably been said before but look at your final goal and work backwards. If you want 100k passive income from rent - how does the house and land in goodna help you? What about a 25yr old property in goodna with minimal tax benefits? In 25yrs time, both properties are old, both probably have similar value, were the tax benefits worth it to hold them? Is the capital growth similar? If I were you, I'd get in touch with someone who can form a big picture plan and work backwards. You can outsource most of what you need to brokers, financial planners, BAs and property managers. Won't matter that your not in Australia and not contactable often
Thank you again for all the advice. I will take it on board and am learning more and more each day. One final question (I hope I'm not pushing it).
Rather than statistics for this, I would recommend you call some property managers and ask them 1. What sort of homes are easy to rent or in high demand? 2. What is struggling to rent out? 3. Which areas of the suburbs are easier / harder to rent out. basically - if you have located an area you want to invest in - go ask the people who will rent it what will work well. Then go do your sums on cost of properties vs rents va future potential of what you bought.
Numbers are good upto a certain extent. Then qualitative data becomes important to try and gauge market sentiment and specific dwelling DD for your chosen area as Foxdan has mentioned.
So statstics paint a picture and give you a good idea at the 'telescope' level, but at the 'mircoscope' level, I need to actually engage local players, and get a real human feel for it all, thinking about things such as buying near amenities and public transport and all the things that will appeal to a family of renters that I want to target. Because, unlike investors, owner/occupiers choose to live somewhere based on emotion, which is why statistics help, but don't get me the whole way. Is this line of thinking correct?
