New to propertychat, 24 years old, need advice

Discussion in 'Where to Buy' started by GreaterRegional12, 5th Apr, 2020.

Join Australia's most dynamic and respected property investment community
  1. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,103
    Location:
    Sydney or NSW or Australia
    @GreaterRegional12 - the first place to start is with getting some background knowledge, this allows you to develop a strategy ie 'why'. Once you understand why you want to invest (desired outcomes, timeframe, risk) then you need to work out the 'what'.

    Next is the 'how' - how will you achieve this goal? Saving is a great discipline, you can show a lender that you are able to save & have genuine savings but can you budget?

    Then you need a reality check - is it achievable? What steps do you have to take to make the first investment? Where will you go from there?

    Don't be afraid of asking for advice even from those who have tried, failed and tried again - what have they learned? Ask the successful too, what mistakes did they make? There are lots of resources to read and absorb.

    You have Phase 1 & 3...

    [​IMG]
     
    Optimus likes this.
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,443
    Location:
    Melbourne
    I could believe it for the mathematicians and researchers though.....

    The Y-man
     
  3. Omnidragon

    Omnidragon Well-Known Member

    Joined:
    17th Oct, 2015
    Posts:
    1,693
    Location:
    Victoria
    Oh but they’re on low salaries to begin with aren’t they? So no surprise they can’t save anything. Even lawyers and doctors. I mean I briefly went to a law firm because I got sick of banking, my pay went from like $160-170k in first year to $60k. I left in a few months lol
     
  4. # 1

    # 1 Well-Known Member

    Joined:
    6th May, 2019
    Posts:
    267
    Location:
    International
    That's where the OP slipped up
     
  5. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    You don't understand "leverage". You need to study more on this......along with using OPM (other people's money).
     
    housechopper2 likes this.
  6. Propertunity

    Propertunity Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    3,476
    Location:
    NSW
    ....and if you ask them, they won't know either. Generally speaking the more money you make the more your lifestyle expands to spend it all (plus some).
     
    Archaon likes this.
  7. Stoffo

    Stoffo Well-Known Member

    Joined:
    14th Jul, 2016
    Posts:
    5,301
    Location:
    In the Tweed
    I would be thinking structure first, with asset protection at the top of my list.
    I have seen people go without and save for years, only to fall in love and do their hard earned !
    It is easy to do .........
    Read most of @Terry_w tax tips, there's a link at the bottom of his earlier post ;)
     
  8. Mill

    Mill Well-Known Member

    Joined:
    7th Jan, 2017
    Posts:
    73
    Location:
    Brisbane
    +1 for books. Not just property books but mindset books too!

    Read from a range of authors, not just a single one
     
    Angel likes this.
  9. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,443
    Location:
    Melbourne
    @GreaterRegional12

    Can you tell me what you had in mind for a $200k apartment?
    Impossible (or at least near to) to find a resi apartment for $200k in my town.

    The Y-man
     
  10. Joynz

    Joynz Well-Known Member

    Joined:
    5th Apr, 2016
    Posts:
    5,751
    Location:
    Melbourne
    You mention that your family are poor.

    Perhaps there is something you could do to help (or thank) your Mum and Dad now that you have a uni education and lots of savings?
     
  11. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    905
    Location:
    Brisbane
    @GreaterRegional12
    It will be very useful to learn from all the post above as you can see people care.

    For me, it is only 1 thing, please note we work (invest, buy house, share) to live, beside learning finance and investment, learn how to dream and how to spend money to enjoy life is also important as you will
    see, sometime, the more money you spend, the more you make. At some point, which I hope you will be there soon, it is just a number...

    • Never been on holidays and I live a fairly comfortable, routine life.
    • Living with parents and saving as a kid lots of money. I do not waste. I dont drink, smoke, drugs, etc. All of this I totally avoid
     
    The Grinch likes this.
  12. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,673
    Location:
    Perth WA + Buderim Qld
    Hey and welcome :)

    Before you start thinking about 'What' you need to get clear on 'Why'.

    Why are you even thinking about investing? What are you hoping to achieve?

    Growing up poor can actually make it really hard to invest because the fear of loss is so strong. I'd suggest starting by first of all getting super clear on what you want to achieve, and second working out what you're willing to risk to achieve it.

    From there, it'll start to become clearer on they types of properties that will help you get there and the amount of risk you might need to take.
     
  13. Player

    Player Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,097
    Location:
    Paradiso
    What apartment are you going to purchase cash without debt with 200K that you've saved?
     
  14. # 1

    # 1 Well-Known Member

    Joined:
    6th May, 2019
    Posts:
    267
    Location:
    International
    The Y-man likes this.
  15. Songo

    Songo Well-Known Member

    Joined:
    8th Aug, 2015
    Posts:
    90
    Location:
    Qatar
    I think you have little or nothing to worry about then and a lot of time to learn about property investing. This is not a criticism but note that your questions come across along the lines of "can you guys do my homework for me". Just start reading and in a few years you'll look back on your OP and laugh at yourself for asking such newbie questions. Learning is a lifelong process and you have most of your life still ahead of you!
     
    The Grinch likes this.
  16. wylie

    wylie Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,934
    Location:
    Brisbane
    Unless I'm reading this wrongly, this property advert says currently under-let at $190 per week with potential to enhance to a return of $250 per week. It would need a fair bit of enhancing to make it appealing, and I've no idea how accurate that "potential" rent of $250 per week is, or how much it should rent for now.

    But as others have said, just buying something because you have the cash to buy it, is not a good reason to do so.
     
  17. # 1

    # 1 Well-Known Member

    Joined:
    6th May, 2019
    Posts:
    267
    Location:
    International
    Yes I forgot to mention a friend bought one of them, spent 9k on new kitchen, appliances, floating floor, vanity, ceiling fan, paint and now gets $275pw for it
     
    wylie and The Y-man like this.
  18. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,443
    Location:
    Melbourne

    Nice. So rather than shoot the OP down in flames without really running through an example, let's use this one.

    The question I will address in this post is "Would this be better than a term deposit?".

    So let's say @GreaterRegional12 pays $200k (inc costs, stamp etc)

    Leaving the rent at $190pw (coz the op has no money left to spend on it)

    Assuming 4 weeks vacancy a year (because it seems to be readvertised annually Property Report for 23/31 Smith Street, St Kilda VIC 3182)
    and 10% PM costs (inc GST) the OP would get $8208 pa

    Based on an aprtment of similar age I own in the area, I'd say OC would be about $1600 pa, rates $800 pa, and water $800 pa (@#1 do you have better numbers for these?). I'm putting $800 for water as I would think a building this age would not be individually metered.

    Ok, so that leaves a net $5088 pa.

    2.54% pa return on the $200k

    So the return cash wise is 2.54% pa.

    Is it better than a term deposit? For now, YES!
    Might be a different story when interest rates go up of course.

    Also, cap gains wise, it has doubled in 18 years ~ ok very slow but if has gone up....

    The Y-man
     
    Niche, iloveqld, wylie and 1 other person like this.
  19. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,443
    Location:
    Melbourne
  20. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    Too long to read but it's obvious to me hands down you need to not buy anything now and spend some months studying. Maximize your serviceability, keep saving and study. Do forum searches on study topics and books.

    If you can just get this part right which most people just do not, you can make some fantastic decisions in the next 12 to 18 months potentially.
     
    iloveqld likes this.