Join Australia's most dynamic and respected property investment community

Hello from Adelaide!

Discussion in 'Introductions' started by Michael V, 18th Sep, 2016.

?

Should I build our dream home or rent where we want to live?

  1. Build

    0 vote(s)
    0.0%
  2. Rent

    0 vote(s)
    0.0%
  1. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Hey everyone,

    My name is Michael, I'm a few weeks shy of turning 25 and already starting my path towards property investment. I work full time as a ICT Systems Administrator but also run my own business with a partner providing web design, hosting, SEO and more.

    My Debt Struggles

    Previously I have been struggling with debt from credit cards and my personal loan for my car which I had my previous cars debt stacked into as well.

    Over the past 24 and most importantly past 12 months I have come a huge way to closing many of my debts and in the next 12 months my car loan will also be 100% paid off which will open up my investing savings :)

    My Future Plan

    My main strategy I want to look into is getting a home big enough for my wife and I to start a family in but at the same time I want to look into property investment so that one day when our kids are older, I can work from home and maintain a good family/work balance. That's what I want my financial freedom to be.

    My wife is very adamant that she wants us to get a home loan to build our dream family home, as she does not want to rent. I myself also want our dream home but at the same time I see it money wasted but if I could put together a plan to build up equity to get an investment property within 5 - 10 years I would be happy - then I wonder how many properties I could have in the span of 5 - 10 years??

    Looking very forward to meeting you all and hopefully define the path I want to take more clearly :)

    Thanks,

    Michael
     
    Last edited: 18th Sep, 2016
  2. monalisa

    monalisa Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    314
    Location:
    Sydney
    Hi @Michael V

    Welcome to PC.

    Congratulations on thinking about your future at your age.

    I can understand not wanting to rent. However, it terms of dream home - can it wait a few years until you have established your financial foundations? Delayed gratification is worth it. Perhaps look at getting a well located property in Adelaide which will do well, and can later be converted into an investment?

    Definitely start with the 'end in mind' and work backwards from that goal to map out your real estate portfolio.

    Spend time reading PC, and also the Somersoft forums (now archived) - there is a wealth of information and others' experiences on how they have used real estate to achieve their goals.

    All the best!
     
  3. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Thanks @monalisa

    Definitely getting used to the delayed gratification. I have also been reading some books such as Rich Dad Poor Dad and now began 0 to 130 Properties in 3.5 Years. Working backwards from my goal is definitely what I want to do!

    I have already been reading through a few strategies on here and it just inspires me even more! Can't wait to see what my future has inline for me. I'm ready for all the hard work ahead.
     
    monalisa and MsAli like this.
  4. Nemo30

    Nemo30 Well-Known Member

    Joined:
    31st Dec, 2015
    Posts:
    438
    Location:
    Somewhere
    Welcome to the forum.

    Personally im with your wife. Having a ppor is a great way to build wealth. Ive made more on my ppor than my investments and its been cgt free.

    Tou can also use the same strategies you would use on an ip to generate equity. Ie. Buy something that needs work and do it up while you live in it... dont over capitilise though.

    You can then revalue and draw the equity for an ip or turn it into an ip and buy a new ppor.

    There are various meetups in Adelaide from time to time. You and your wife should come along.
     
    Michael V likes this.
  5. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Thanks @Nemo30

    To be honest it would be good if we could build our first house, save up a big deposit and use the First Home Buyers Grant to pay that little bit extra :) Then I could apply strategic repayments to reduce the principal and free up the equity to finance our first IP.

    Definitely considering going to a meetup in Adelaide when one is on next :) be good to speak to some more experienced people than myself in person.
     
  6. Nemo30

    Nemo30 Well-Known Member

    Joined:
    31st Dec, 2015
    Posts:
    438
    Location:
    Somewhere
    Thats definitely one way to do it. Id be careful though, often new homes are in new estates where very little capital growth is going to occur for a few years.

    The first home buyer grant sounds great, however be careful that its not pushing you in the direction of a less productive asset that will set you back from investing for a few years.

    It does work for some. My dad built in Aldinga beach a few years ago and he has done well. Some of the northern suburbs like munno para west i cant see growth for a long time.

    My advice is dont rush in. Read lots and ask questions on here, go to meetups and talk to people.
     
    DaveM likes this.
  7. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    I don't plan to rush into anything without considerable amount of thought and a affective investment/long term plan.

    Very interested to see how this would all happen still :)
     
  8. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,507
    Location:
    Sydney
    Hi @Michael V welcome. You said you will be able to pay off your car loan in the next 12 months. You said you want to start getting money saved up. Why not consider selling the car and purchase a second car with cash?

    A week ago there's a thread about whether to buy a car with loan or cash. Most PC who responded bought cars in cash.

    I would only buy a car if I have cash to pay it in full. Do you also have a high limit for credit cards or many credit cards?

    I think brokers here are able to give you insight as to what banks look for in a loan applicant.
     
  9. Ricky Adelaide

    Ricky Adelaide PM in Adelaide -Elizabeth Salisbury Modbury Business Member

    Joined:
    3rd Aug, 2015
    Posts:
    66
    Location:
    South Australia
    There are also a few of us in Adelaide, we are all pretty approachable - phone calls to those of us in other states is great if your looking to invest aboard and no more about the local area. Most of us are happy to catch up and point out what we have done right and what to avoid. Always free for coffee if your keen :)
     
  10. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Hey @larrylarry, I did actually see that thread and wish I had of done that 5 years ago :) however I was young, had huge income and little expenses so I traded in my car with 12k left for a 35k car. Ended up with a 40k loan for a 26k car after trade in value. Not exactly my smartest idea....

    However I did the maths and it's cheaper/faster for me to make bigger repayments and close my loan in 12 months instead of the 24 months remaining. I have already made a promise to myself that the next car I buy will be cash!!

    Thanks @Ricky Adelaide , I will 100% take you up on that offer mate :) happy to chat with you more over PM or in different topics. I have lots of questions....
     
  11. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Read lots of books by Australian real estate authors such as Margaret Lomas, Steve McKnight etc...
    Once you aware of the different strategies available, you will be able to develop your own that suits your situation.
     
  12. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    @Azazel I have been reading 0 to 130 Properties in 3.5 Years by Steve McKnight, it's made me more keen than ever to get into property investment. I will be sure to read more titles :)
     
  13. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Yeah, that's a good one. But be sure to put it in perspective, that's maybe a little over the top. But it's good to aim high!
    Some of the strategy things are really helpful to get your head around. Where do you want to be, and by when? Break it into smaller stages to get there. Celebrate the small wins!
     
  14. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Yeah well I know alone I cannot achieve that such a goal :) But that is not my plan to have 100 properties in 5 years or so :p I want to steadily grow my property portfolio to supplement my salary until I can replace my salary from it.

    Small goals are definitely what I plan to have :) Such as maybe 1k a month passive income from IP's would be a good starting goal, no?
     
  15. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    If that's what you determine your goal is, it's up to you.
    I like cashflow positive, but I find it allows you to get some that aren't CF+ as well. Good to have a balance, CF+ are not necessarily going to increase in value in a hurry, but do allow you to hold for the long term.
     
  16. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    Definitely agree. Part of my strategy is similar to what Steve McKnight talks about... 1/3 of the property income should go into NG properties as well. Get a diverse portfolio of properties to mix it up :)
     
  17. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    That's the ticket!
    A good mix is the way to go.
    And different locations can be good, not just for the sake of it, but not having all of your eggs in the one basket, and different markets are doing different things at different times.
     
  18. Michael V

    Michael V Well-Known Member

    Joined:
    17th Sep, 2016
    Posts:
    63
    Location:
    Adelaide, SA
    100% Agree with you :) I plan to diversify my investments across all states to keep a consistent flow in-case of any changes in any particular state.
     
  19. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    Sounds like part of a good plan.
    When one is increasing, you can revalue to get some equity and use it to fund another IP or renovation.
     
    Michael V likes this.